Finding the True Cost of Electricity Plans

Our analysis of electricity usage data from 100 Texas homes reveals a critical finding: advertised electricity rates consistently mask true costs - with one notable exception that proves why.

Problem Statement

Electricity providers base their advertised rates on specific monthly usage amounts - typically 500, 1,000, or 2,000 kWh.

Methodology

Our analysis examined actual electricity usage data from 100 Texas households, with homes ranging from 600 square feet, to more than 5,000 square feet.

1. Analyzing real, month-by-month usage data from actual Texas homes
2. Calculating true costs for each plan using precise usage amounts
3. Comparing total annual costs across different plans
4. Identifying patterns in cost differences between advertised and actual rates

Small Home (656 sq ft)

This usage pattern represents what we consistently observe in smaller homes and apartments throughout our dataset:

• Advertised rate: 15¢ per kWh
• What you actually pay: 19.9¢ per kWh
• Annual cost: $1,633.51
• Extra cost vs. best plan: $472.74
• Advertised rate: 10.5¢ per kWh
• What you actually pay: 18.2¢ per kWh
• Annual cost: $1,492.59
• Extra cost vs. best plan: $331.82
• Advertised rate: 12.7¢ per kWh
• What you actually pay: 20.6¢ per kWh
• Annual cost: $1,690.98
• Extra cost vs. best plan: $530.21
• Power On 24
• What you actually pay: 14.1¢ per kWh
• Annual cost: $1,160.77

Medium Home (1,193 sq ft)

This usage pattern is right in line with the average Texan who uses between 1,000 and 1,200 kWh each month:

• Advertised rate: 15¢ per kWh
• What you actually pay: 21¢ per kWh
• Annual cost: $2,310.77
• Extra cost vs. best plan: $771.45
• Advertised rate: 10.5¢ per kWh
• What you actually pay: 16.9¢ per kWh
• Annual cost: $1,843.53
• Extra cost vs. best plan: $304.21
• Advertised rate: 12.7¢ per kWh
• What you actually pay: 20.5¢ per kWh
• Annual cost: $2,251.27
• Extra cost vs. best plan: $711.95
• Power On 24
• What you actually pay: 14.0¢ per kWh
• Annual cost: $1,539.32

Medium+ Home (2,491 sq ft)

This usage pattern represents larger homes in our dataset:

• Advertised rate: 15¢ per kWh
• What you actually pay: 20.5¢ per kWh
• Annual cost: $2,998.81
• Extra cost vs. best plan: $961.73
• Advertised rate: 10.5¢ per kWh
• What you actually pay: 16.3¢ per kWh
• Annual cost: $2,388.77
• Extra cost vs. best plan: $351.69
• Advertised rate: 12.7¢ per kWh
• What you actually pay: 19.3¢ per kWh
• Annual cost: $2,835.92
• Extra cost vs. best plan: $798.84
• Power On 24
• What you actually pay: 13.9¢ per kWh
• Annual cost: $2,037.08

Large Home (3,873 sq ft)

This usage pattern represents larger homes in our dataset:

• Advertised rate: 15¢ per kWh
• What you actually pay: 23¢ per kWh
• Annual cost: $10,933.87
• Extra cost vs. best plan: $4,454.49
• Advertised rate: 10.5¢ per kWh
• What you actually pay: 17.6¢ per kWh
• Annual cost: $8,359.53
• Extra cost vs. best plan: $1,880.15
• Advertised rate: 12.7¢ per kWh
• What you actually pay: 16.3¢ per kWh
• Annual cost: $7,750.21
• Extra cost vs. best plan: $1,270.83
• Power On 24
• What you actually pay: 13.6¢ per kWh
• Annual cost: $6,479.38

Our Largest Home (5,168 sq ft)

This represents the largest homes in our dataset:

• Advertised rate: 15¢ per kWh
• What you actually pay: 17.5¢ per kWh
• Annual cost: $10,437.36
• Extra cost vs. best plan: $4,235.95
• Advertised rate: 10.5¢ per kWh
• What you actually pay: 17.5¢ per kWh
• Annual cost: $7,948.35
• Extra cost vs. best plan: $1,746.94
• Advertised rate: 12.7¢ per kWh
• What you actually pay: 16.2¢ per kWh
• Annual cost: $7,339.47
• Extra cost vs. best plan: $1,138.06
• Power On 24
• What you actually pay: 13.7¢ per kWh
• Annual cost: $6,201.41

The Exception Cases (Profile 55)

Among 100 Texas homes analyzed, we discovered three unique exceptions where a bill-credit plan actually saved money.

• Small home example: Varies from 320 to 1,211 kWh (279% variation)
• Medium home example: Varies from 407 to 1,859 kWh (357% variation)
• Large home example: Varies from 665 to 2,004 kWh (201% variation)
• This home: Varies from 793 to 1,522 kWh (92% variation)
• Actual average rate: 13.9¢ per kWh
• Annual cost: $1,908.54
• Monthly cost range: $120.53 - $209.05
• Bill credits earned: $100 in 8 out of 12 months

1. The home’s usage hits between 1,000-1,500 kWh in 8 months, earning the full $100 bill credit
2. Even in the four months below 1,000 kWh, usage stays high enough (793-888 kWh) to keep base costs manageable
3. Only one month exceeds 1,500 kWh, minimizing exposure to higher rates

• Actual average rate: 13.9¢ per kWh
• Annual cost: $1,916.09
• Monthly cost range: $111.65 - $210.41
• Difference: $7.55 more annually
• 500 kWh advertised plan: $2,234.89 annually ($326.35 more)
• 2,000 kWh advertised plan: $2,807.14 annually ($898.60 more)
• You can’t predict if you’ll consistently hit bill credit thresholds
• You can’t calculate the impact of missing credits in low-usage months
• You can’t determine if higher rates in peak months will eliminate your savings
• You can’t see your true annual cost

What We Learned From All 100 Homes

1. Real Usage Patterns Never Match Advertised Tiers

• Across all 100 homes studied, monthly usage varied significantly:
• Small homes: 279% variation between lowest and highest month
• Medium homes: 357% variation
• Medium+ homes: 201% variation
• Large homes: 170% variation
• Our biggest sized homes: 191% variation
• No home consistently hit the advertised usage levels
• Seasonal changes affected every home, regardless of size
• Larger homes showed more extreme variations
• Actual rates typically ran 4-8¢ higher than advertised
• Larger homes faced bigger gaps between advertised and actual rates
• Bill credits and usage tiers increased costs in 98% of cases
• The difference between advertised and actual rates grew with usage
• Power On 24 delivered lowest total cost for 97 out of 100 homes
• Annual savings ranged from $300 for small homes to over $4,400 for larger homes
• Consistent rates proved more valuable as usage increased
• Simple rate structures outperformed complex promotional rates
• This volatility explains why the ‘exception home’ conditions are so rare:
• Only 3% of homes (3 out of 100) had stable enough usage to benefit from bill credits
• Required usage to stay between 793-1,522 kWh in all 12 months
• Missing the 1,000 kWh credit tier in just 4 months nearly eliminated all savings

How to Shop for Electricity

1. Know Your Usage Pattern

• Get your full past 12 months of usage data from your electricity bills
• Note your summer and winter peaks
• Compare your usage to advertised rate tiers
• Don’t focus on a single month
• Account for seasonal changes
• Compare total yearly costs, not advertised rates
• Be cautious with plans offering usage credits
• Look for consistent pricing that works year-round
• Consider how rate structures affect your typical usage
• Do you stay between 1,000-1,500 kWh in at least 8 months?
• Is your usage below 1,000 kWh still over 790 kWh?
• Do you exceed 1,500 kWh in no more than 1-2 months?

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• Effortless Accuracy: No more digging through old bills or estimating your usage. Live Link™ securely pulls your real consumption data with just a click.
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• True Cost Clarity: See the full picture of your electricity costs, including how seasonal changes affect your bill.
• Big Savings: By matching you with plans that fit your actual usage, Live Link™ could save you hundreds each year.

Bottom Line

Our analysis of 100 real Texas homes proves that advertised electricity rates consistently mask true costs. These rates depend on hitting exact usage amounts that real homes never achieve consistently.

Related FAQs:

• FAQ ID: 38885