How to Read Your Texas Energy Bill

Why Is Understanding Your Energy Bill Important?

Understanding your energy bill goes beyond knowing how much you owe each month. It allows you to:

• Monitor your energy consumption patterns
• Identify opportunities for energy savings
• Ensure you’re on the most suitable energy plan for your needs
• Detect billing errors or unusual spikes in usage

By regularly reviewing your bill, you can make informed decisions about your energy usage and potentially reduce your overall costs.

Key Components of Your Energy Bill

Your Texas energy bill typically includes several key components:

• Account information: This portion of the bill includes your personal information, account number and service address. 
• Billing period: Also called a monthly statement, this section shows the current payment amount, its due date, the last date paid and any outstanding balance information. 
• Electricity rate: This is the price you’re charged per kilowatt-hour (kWh) of energy consumed based on the plan you selected. 
• Energy usage history: This portion of your statement breaks down your energy usage over a set period of time, usually on a yearly, quarterly or twice-yearly basis. 
• Month-to-month breakdown: This section breaks down your current month’s energy usage, typically with a comparison to previous months, noting differences and changes. 
• Total charges: This represents the total amount you owe after taxes and fees.

These sections are primarily for bills in Texas’ deregulated energy market areas, where customers have the ability to choose their energy providers and plans. If you live in a regulated area like Austin or San Antonio, your bill might be structured differently and come from a local utility company.

Breaking Down the Charges on Your Texas Energy Bill

Your Texas energy bill consists of various charges that contribute to your total cost. Let’s examine each of these charges in detail to help you better understand what you’re paying for.

Energy Consumption Charges

The energy consumption charge is based on the amount of electricity you use during the billing period. To calculate it, multiply the number of kWh you’ve consumed by the rate per kWh specified in your plan. For example, if you used 1,000 kWh and your rate is $0.10 per kWh, your energy consumption charge would be $100.

Delivery Charges

Called Utility Distribution Company (UDC) or Transmission and Distribution Utility (TDU) charges, these are fees charged by your local utility company to cover the costs of delivering electricity to your home or business. The Public Utility Commission of Texas regulates these charges. Delivery charges typically include a fixed monthly fee and a per-kWh charge based on your consumption.

Taxes and Fees

Your energy bill may include various taxes and fees, such as:

• State and local taxes
• Regulatory charges
• System benefit fund fees
• Miscellaneous gross receipts tax reimbursements

State or local governments mandate these charges, so they can vary depending on your location and energy provider.

Understanding Your Plan Details

There are two major portions of your plan that you should be aware of: your rate and the terms and conditions. Your rate is how much you’re being billed per kWh, and the terms and conditions outline the essential elements of your contract. 

Fixed-Rate Vs. Variable-Rate Plans

Texas offers two main types of energy plans:

1. Fixed-rate plans: Use a set price per kWh for the duration of your contract.
2. Variable-rate plans: Allow rates to fluctuate based on market conditions.

Fixed-rate plans provide stability and predictability, while variable-rate plans may offer lower rates during certain periods but come with more risk. 

Contract Terms and Conditions

The terms and conditions section of your contract typically include the following:

• Length of the contract
• Early termination fees
• Automatic renewal terms
• Any promotional rates or discounts

We recommend carefully reading through the terms and conditions before renewing or signing onto any plan. 

How to Calculate Your Total Energy Usage

Calculating your total energy usage helps you understand your consumption patterns, identify opportunities to reduce costs and catch potential errors in your bill. Here’s how to do it:

Reading Your Meter

To read your electric meter, follow these steps:

1. Locate your meter, usually on the exterior of your home.
2. Read the numbers from left to right for a digital meter. For a dial meter, note where the pointer has just passed on each dial.
3. Subtract the previous reading from your current reading to determine your total energy consumption for the billing period.
   

Usage Graphs and Charts

Many Texas energy bills include graphs or charts that visualize your energy consumption over time. These tools can help you:

• Identify usage patterns
• Compare current usage to previous months or years
• Spot unusual spikes in consumption

Decoding Time-of-Use Pricing in Texas

Some Texas energy plans offer time-of-use (TOU) pricing, which can significantly impact your final bill. TOU plans charge different rates based on the time of day you consume electricity. Understanding TOU pricing can help you make strategic decisions to lower your bill.

Peak Vs. Off-Peak Hours

TOU plans typically divide the day into peak and off-peak hours:

• Peak hours: Times when electricity demand is highest, usually during weekday afternoons and evenings
• Off-peak hours: Periods of lower demand, often overnight and on weekends

By shifting energy use to off-peak hours on a TOU plan, you can lower your electricity costs.

Strategies to Reduce Costs During Peak Times

Here are some ways to reduce your energy consumption during peak hours:

• Run major appliances during off-peak hours, such as late at night.
• Use programmable thermostats to adjust temperature settings when you’re away from home.
• Charge electric vehicles overnight when rates are lower.
• Install energy-efficient lighting with timers or motion sensors.

Comparing Your Bill to Previous Months

Regularly comparing your current bill to previous months can help you identify trends and spot anomalies in your energy usage.

Identifying Seasonal Patterns

Energy consumption often varies with the seasons. In Texas, you might notice:

• Higher bills in summer due to increased air conditioning use
• Lower bills in spring and fall when temperatures are milder
• Slightly higher bills in winter for heating (this is typically less extreme than summer cooling costs)

By understanding these patterns, you can budget accordingly and find ways to reduce energy use during high-demand seasons.

Spotting Unusual Spikes in Usage

If you notice a sudden increase in your energy consumption, potential causes include:

• Malfunctioning appliances
• Changes in household occupancy or routines
• Extreme weather events
• Billing errors

How to Spot Errors on Your Energy Bill

Occasionally, errors may occur on your energy bill. Knowing how to identify and address these mistakes can save you money and hassle.

Common Billing Mistakes

Watch for these common errors:

1. Incorrect meter readings
2. Misapplied rates or charges
3. Billing for the wrong address or account
4. Failure to apply credits or discounts

Regularly reviewing your bill can help you catch these mistakes early.

Steps to Take If You Find an Error

If you suspect an error on your bill, follow this process:

1. Compare the current bill to previous bills.
2. Check your meter reading against the bill.
3. Contact your energy provider’s customer service department.
4. File a complaint with the Public Utility Commission of Texas if the issue isn’t resolved.

This article was created with the assistance of automation technology, reviewed and fact-checked by two editors specializing in deregulated energy.