Skip to content

What is an Electricity Facts Label?

May 10, 2010

Ever since the deregulation of electricity in various states such as Texas, people are given the power to choose their Retail Electric Providers. This also paved the way for more competition in an otherwise monopolized industry, giving consumers the option to choose companies that can provide comparatively cheap electricity or be environmentally helpful by choosing companies that make use of alternative forms of energy resources.

However, with the myriad REPs that provide electricity to the millions of consumers in the state, it would be difficult to choose among these companies without a standard or a common basis that everyone would comply with. In this regard, the Public Utility Commission of Texas or the PUC have implemented the Electricity Facts Label (EFL) that each of these electric companies should provide consumers. The EFLs provide consumers with an apples-to-apples comparison between companies helping them choose which REPs they will work with. Once they’ve chosen a company, the EFL would then serve as a contract between the REPs and the consumers, with the REPs disclosing everything the consumers need to know about their electrical service.

Getting to Know the Electricity Facts Label

Similar to the nutrition label required by the FDA for all food manufacturers and products, the Electricity Facts label is also required by the PUC from Retail Electric Providers to give consumers a standardized information sheet where they can learn, and compare, critical information about the REPs products and services. The EFL also serve as a compliance form that indicates the details of the services each REP should provide their end customers.

The electricity facts label provides end users very valuable information about price per KWh, termination fees, contract term and other important disclosures on their electric plan. The EFL is divided into three sections 1-Electricity Price, 2-Other Key Terms and Conditions, 3-Disclousure Chart.

•Electricity Price- The EFLs provide consumers with an electricity price chart, wherein average prices per typical consumer usage levels such as 500 kWh, 1000 kWh or 1500 kWh are indicated. Some companies would include all related charges including special charges for generation, distribution and transmission costs as well as other administrative costs that the electric company will charge consumers. This section of the EFL is very important select a company that has the least PRICE GAP per KWH gap between 500-1000 KWh. I have seen many cases where customer signs up for a teaser rate of 12 cents per KWh for 1000 KWh and they pay close to 15 cents per KWh when they use less than 1000 KWh of electricity per billing cycle.

•Other Key Terms and Conditions- One important section in the EFL is the disclosure chart where the electric company lists down relevant answers to potential F.A.Q.s that the consumers may ask regarding the service. This includes the type of products being offered, particularly if these have fixed or variable rates.

•Disclosure chart- The disclosure chart also lists down information like the contract term, payment schemes, and potential price changes in the future, other fees, termination fees and other related details. These electric companies also indicate information about the sources and facilities used to generate the electricity provided through the REP. Here, consumers will know if the company has alternative green energy sources. Also related to the environmental aspects, some companies include in their EFLs information about the emissions released during the generation of electrical energy. This emission information is also compared with the average emissions generated in the state.

The EFLs are very important documents that REPs should comply with as part of their service to consumers. The information that consumers can derive from these EFLs would provide them with a clear insight about what they should expect from their Retail Electric Providers — an excellent tool to complement their Power to Choose.

No comments yet

Leave a Reply

Note: You can use basic XHTML in your comments. Your email address will never be published.

Subscribe to this comment feed via RSS

Comment validation by @

Follow

Get every new post delivered to your Inbox

Join other followers: