Life, Electricity

How to Read Your Electricity Facts Label (EFL)

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Whether you're a new homeowner or renter or have been responsible for paying the utility bills your entire life, there's a good chance you don't know what an Electricity Facts Label (EFL) is. That's because most electricity companies try to hide their EFL to keep you from fully understanding the terms of your electricity plan.

By law, retail electric providers must have an Electricity Facts Label (EFL) with each electricity plan. However, it's often included as a small link that's difficult to find. Even worse, however, is the fact that EFL's are difficult to read and understand unless you're familiar with the electricity market. That's all about to change, however, as this article will give you the complete rundown in regards to everything you need to know about your Electricity Facts Label.

What is an Electricity Facts Label?
Where to Find Your Electricity Facts Label
What Information is Included in Your Electricity Facts Label?
How to Read Your Electricity Facts Label
How GoodCharlie Energy Approaches Electricity Facts Label

What is an Electricity Facts Label?

As the name indicates, an Electricity Facts Label (EFL) contains everything you need to know about an electricity plan. EFL's will be different and catered to each individual plan but will always contain the same basic information. The PUC requires all retail electric providers to have EFL's with their plans that fully disclose the details of the plan.

Where to Find Your Electricity Facts Labels Sheet

One of the tricky things about EFLs is that they're tough to locate within the plan. Most people select their electricity plans online, so we'll explain how to locate your EFL on an online plan.

Go to an electricity provider's website and enter your zip code to determine whether or not they provide electricity to your area.
If you see a plan that you like from the results that pop up, click the Learn More or Plan Details tab on the plan.
This will direct you to a popup containing several links and basic information about the plan.
Somewhere within the popup, you should see a link entitled Electricity Facts and Labels Sheet, Facts and Labels Sheet, or Electricity Facts Label.
When you click on that link, it will direct you to the EFL.

What Information is Included in Your Electricity Facts Label?

Your EFL will have literally everything you need to know about the electricity plan in question. It will address any concerns and answer most questions you have about the plan. Here are some specific details that your EFL should include.

The type of plan, aka, fixed-rate, variable-rate, flat rate, or prepaid.

The length of the plan
Whether or not there's an early termination fee and how much it is
The various tiers and prices of electricity
Your energy rate
The average rate
Base and delivery charges
What percentage of your plan uses renewable electricity
The statewide average for renewable electricity content
Contact information for your provider
Stipulations about whether or not your rate can change and by how much
Additional fees and charges

How to Read Your Electricity Facts Label

For the most part, reading your EFL isn't too difficult, and it's mostly self-explanatory. Next to each piece of information, there should be a corresponding answer or explanation. However, it's important to be thorough and take your time as you're reading through the EFL. Because of how much information there is, it's easy to miss something and sign up for the wrong electricity plan.

How to Read the Tiered Rates and Charges Section

The most important part of the EFL to concern yourself with is the tiered rates section. On most EFLs, this section is at the top of the page and one of the first things you'll see. Here's an example of what the tiered rates section on your EFL might look like when you contact us at GoodCharlie Energy for your electricity plans.

Average Monthly Use	500 kWh	1,000 kWh	2,000 kWh
Average Price/kWh	14.8 cents	13.9 cents	13.4 cents

GoodCharlie:
Energy Charge: 8 cents/kWh
Base Charge: $4.95
CenterPoint Energy:
Delivery Charge: 4.9 cents/kWh
Base Charge: $4.39 per month

I'm sure you're confused by now, so let's break down each part of this section on the EFL.

Average Rates

The rates section shows you how your average electricity rate changes depending on the amount of electricity you use. According to the chart above, you'll pay an average of 14.8 cents/kWh if you use 500 kilowatt-hours of electricity.

If you use more than 1,000 kWh, your average rate drops down to 13.9 cents/kWh. At 2,000 kWh, your average rate reaches its lowest point of just 13.4 cents/kWh. Therefore, the more electricity you use, the lower your overall rate will be as the charges are distributed across more kWh.

Energy, Delivery, and Base Charges

The second aspect of the electricity price section on your EFL is understanding your energy, delivery, and base charges.

Energy Charge

The energy charge is the rate/kWh that GoodCharlie actually charges for electricity. In the example above, GoodCharlie's energy charge is 8 cents/kWh. Based on how much electricity you use, the energy charge could go up or down.

Delivery Charge

The delivery charge is what your local utility company charges to "deliver" electricity to your home. Your REP has no control over the delivery charge and the money goes straight to your utility company. However, in most cases, and with the example above, your REP will figure the delivery charge into the price/kWh on the plan.

Base Charge

Both your REP and your utility company will charge a flat base rate if you're enrolled in an electricity plan. This charge usually isn't more than $5 per month for each company and is once again figured into your price/kWh rate on your electricity plan.

How GoodCharlie Energy Approaches Electricity Facts Label

As you can see, there's a ton of important and sometimes confusing information on your EFL. However, understanding this information and knowing how to read your electricity rates and labels sheet is crucial for choosing the right electricity plan. That's why, at GoodCharlie Energy, we make reading your EFL as easy as possible.

Using this guide, you should be able to easily locate, read, and understand your EFL.