Calculate the Real Cost of an Electricity Plan

Understanding the Real Cost of Texas Electricity Plans

Have you ever looked at an electricity bill and wondered how they came up with that number?

Let’s cut through the complexity and understand precisely what you’re paying for.

The Basic Formula Behind Your Bill

Your electricity costs come down to a simple formula:

Monthly Bill = (Base Energy Rate × kWh Used) + Monthly Fee + (TDU Delivery Charge × kWh Used) + TDU Monthly Fee

Let’s break this down with a real example:

• Base rate: 12.5¢ per kWh
• Monthly service fee: $9.95
• TDU Delivery: 4.5¢ per kWh
• TDU monthly fee: $5.00

At 1,000 kWh, your bill would be:

• Base energy: $125.00
• Service fee: $9.95
• Delivery: $45.00
• TDU fee: $5.00
• Total: $184.95

Where It Gets Interesting: Tiered Rates

Texas electricity plans often use tiered rates, like bulk pricing at the grocery store. Here’s what that might look like:

Using up to 500 kWh: 16.5¢ per kWh
501-1000 kWh: 12.5¢ per kWh
Over 1000 kWh: 11.5¢ per kWh

This is where simple calculators can mislead you - your actual rate changes based on how much power you use.

Hidden Costs That Can Surprise You

Watch out for:

• Minimum usage fees (yes, charges for using too little electricity)
• Time-of-use rates (paying more during peak hours)
• Bill credits (getting money back at specific usage levels)
• Seasonal rate changes

Three Steps to Compare Plans Accurately

1. Pull your past 12 months of bills - this is crucial
2. Note your highest and lowest usage months
3. Calculate costs at three levels:
   • Your typical usage
   • Summer peak (usually August)
   • Winter/mild month (often April/May)

Ready to Master Your Electricity Costs?

If you want to take control of your electricity costs, you have three options:

1. Quick Comparison: Use our calculator to see plan costs at your usage levels. It’s fast and easy, but you’re relying on our math.
2. Do It Yourself: Follow our detailed spreadsheet tutorial to build your calculator. You’ll learn to handle tiered rates, credits, and seasonal changes. This is perfect if you want complete control and understanding.
3. Hybrid Approach: Use comparison tools for initial screening, then verify the best options with your calculations using our tutorial.

Want the Easy Button? Try Live Link™ - It’s Free

You can skip the calculations entirely. Live Link™ automatically pulls your real usage data and finds your best plan in minutes.

No spreadsheets, no manual calculations, no guesswork – connect your usage data and get personalized plan matches based on your actual consumption patterns.

Find Your Best Plan with Live Link™ →

Want to Go Deeper?

Our step-by-step spreadsheet tutorial shows you exactly how to build a custom calculator that handles:

• Tiered rate calculations
• TDU charges
• Bill credits
• Seasonal patterns
• Annual cost projections

You’ll learn to create a tool to compare any electricity plan and track costs throughout the year.

The Bottom Line

Whether you use comparison tools or build your calculator, understanding how your electricity costs are calculated puts you in control.

You’ll spot better deals, avoid surprise charges, and make informed decisions about your electricity plan.

Electricity Cost FAQs

How to calculate the real cost of an electricity plan?

You can input your historical usage data to calculate the real cost of an electricity plan on ComparePower.

With your usage, you can compare plans based on the total annual cost and choose the best plan for your space.

ComparePower always shows you the total annual cost of each plan so you can make an informed decision about your electricity plan.

How can I find the cheapest electricity plan in Texas?

Finding the cheapest electricity plan is quick and easy with ComparePower.

Enter your monthly usage or estimate with our kWh calculator, and we’ll automatically show you the cheapest electricity plan for your home.

There is no need to search around through dozens of websites.