You know to pay your electric bill every month, but do you know exactly what you’re paying for? Electric bills provide important information about your energy use and costs, but they are often difficult to understand.
In this blog, we’ll show you how to read your Texas electricity bill and understand the information it offers. You can then use this knowledge to better control and reduce your power costs.
How is electricity measured and billed?
Electricity usage is measured and charged by the kilowatt-hour (kWh). A watt is a unit of energy and a kilowatt equals 1,000 watts.
Electrical devices are categorized by the speed at which they use power, known as wattage. You can also understand wattage as the number of watts a device consumes during a full hour of use. A 60-watt light bulb would use 60 watts of energy over an hour, for example.
Over the course of your billing cycle, your home consumes several thousand watts of energy. Your electric company measures your use by the kilowatt (3,000 watts becomes 3 kilowatts) at a rate of 1 kilowatt per hour. This amount is then multiplied by the electricity rate your provider charges.
For instance, the average Texas home uses 1,132kWh per month. Using the average Texas electricity rate, 13.3¢/kWh, the average customer would pay about $150 per month for their power.
How to read an electricity bill in Texas
Now that you know how energy costs are calculated, let’s take a look at the information you can find on your power bill.
Most of this information will be listed on the first page of your bill. If you can’t find details about specific charges, check the back or second page of your invoice. You can find this information on your online account as well.
Account information
This section ensures that you are getting the right bill for your home. It will typically include information such as your:
- Name
- Address
- Account number
- Electric service identifier (ESI) ID number, an identifier assigned to your home address
You should always double-check this info to make sure it’s correct. Get in touch with your power company immediately if there are any issues.
Account summary
Your account summary includes information about the past billing cycle, including:
- The opening balance – This represents the total charges shown on your last bill, including both unpaid charges and new charges during the last billing cycle
- Payments received – Any payments you made on these charges
- Balance forward – The opening balance less any payments you made
Check this section to ensure that it reflects any payments you made. If you didn’t pay the last month’s charges on time, you may also see late fees here.
Usage summary
Here is where you’ll see information about the amount of kWh you used during the last billing period. Most energy providers include two ways to understand your usage: summaries and graphs.
The summary will simply state how many kWh your home used during the last cycle. It may include the previous and current meter readings to show how they measured your use. Some companies will tell you the total number of kWh you’ve used during the last 12 months as well.
Energy providers typically use the graph to compare your recent energy usage with past months or years. Easily see if your higher charges are due to increased usage. Some providers add the average high temperature during the past month to give more context to your charges.
TDU charges
TDU stands for Transmission and Distribution Utility. Though you will pay your electricity provider for your monthly costs, they aren’t necessarily the ones delivering power from the generation plant to your home.
TDU charges are used to pay for power line maintenance, new equipment, customer service, and any additional costs associated with delivering electricity. You may also see a TDU meter charge, a fee charged for metering your consumption.
If you don’t see a TDU charge on your bill, don’t panic. You may have a bundled power plan. Rather than listing these charges separately, your provider bundles them with your overall energy costs.
Depending on your power company, you may see this cost listed as a delivery fee rather than a TDU charge.
Like your energy charges, TDU fees are based on your energy usage. Using less electricity will lower both your TDU costs and overall charges.
Energy costs
Your energy charges multiply the amount of energy you used by your provider’s rates. This amount may change depending on where you live. You may also pay a fuel charge if natural gas or oil is used to produce the electricity you use.
On your bill, you should see the amount of kWh you consumed over the last billing period, your electricity provider’s energy rates, and the total amount you’ll pay for this bill.
The type of electric plan you use will also affect the amount you pay. Currently, Texans can choose from a variety of plans, including:
- Fixed Rate – With this plan, you will keep the same rate throughout your contract period. Your rates won’t go up with market prices, but they also won’t fall. Other charges, including TDU fees and taxes, may change.
- Variable Rate – Your rate will change month-to-month with market prices and the provider’s discretion. You don’t need a contract for these plans.
- Time-of-Use Service – Providers can designate certain times of the day as free or discounted hours. You can lower costs by only using power during these periods, but you may pay more for energy used during peak hours.
Taxes
Finally, every power customer has to pay taxes on their power usage. These taxes may be required by the state, city, or district that you live in, such as a sales tax.
You can usually find a breakdown of these taxes on the back or second page of your Texas electricity bill. Taxes are also calculated based on your usage, so the more power you consume, the higher your taxes will be.