Since your actual electric rate in Texas can vary depending on how much electricity you use, the PUC requires companies to disclose the average rate at 500, 1000, and 2000 kWh.
They call this an “average” rate, but that only means the average at that exact usage amount.
If you see an average 1,000 kWh rate of 8.1¢ and you use 1,001 kWh, you may not be paying 8.1¢.
Luckily, most plans are fixed rate, unbundled plans.
This means that the electric company will charge you a certain rate per kWh and pass the TDSP fees through to you.
Since utilities in Texas charge a base (per-cycle) fee of up to $10, this means the less you use, the higher your per kWh rate.
How do I get a REAL fixed rate?
There are still a few companies that have bundled rates.
This means that they charge you one rate, and do not pass the TDSP fees through to you.
If their rate is bundled and there is no base or per cycle fee, then your electricity rate will be constant at any usage.
Some of the companies that have these kinds of rates are Just Energy and Tara Energy.
The 1,000 kWh rates may not be as attractive, but your bill will directly reflect your usage amount.
What is a Tiered Rate?
A tiered rate plan is a plan that charges different rates depending on how much you use.
They may have a flat fee of $30 if you use between below 500 kWh.
If you use between 500 and 2000 kWh they may charge you 4.5¢ per kWh and a base charge of $25.
They may offer you a $75 bill credit if you use over 1,000 kWh but not offer it if you go over 2,000 kWh.
These charges can make your bill seem random and out of control because there is no correlation between your electricity usage and your rate.