True Cost of Texas Electricity Plans

Executive Summary

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.

The data shows that the Power On 24 plan delivers the lowest annual cost for 97% of Texas households, despite not having the lowest advertised rates at standard usage levels (500, 1,000, and 2,000 kWh).

Problem Statement

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

These rates depend on bill credits and usage tiers that only activate at exact usage levels.

The catch? Real homes never use the same amount of electricity each month, making it impossible to consistently hit these targets.

This practice results in dramatically higher costs for Texas electricity customers.

Understanding your true electricity costs requires calculations based on your complete usage data – not estimated or advertised amounts.

Even in the rare case where a bill credit plan proved advantageous, the savings amounted to just 63 cents each month.

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.

For each home, we gathered pricing data as of 12/11/24 and determined the total annual costs across multiple electricity plans by:

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

This research uses real customer data, not models or estimates, providing an accurate picture of how electricity plans perform in real-world conditions.

Advertised electricity rates only show you the rate at an exact amount of electricity. What matters is your total cost throughout the year, based on your actual varying usage patterns.

These advertised rates often rely on bill credits and usage tiers that result in much higher bills throughout the year. Let’s examine five representative homes from our dataset to understand the real impact on electricity costs.

Small Home (656 sq ft)

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

Month	Usage (kWh)
January	1,211
February	550
March	395
April	320
May	545
June	953
July	911
August	1,003
September	601
October	472
November	479
December	754

Like most homes studied, usage varies significantly throughout the year – from 320 kWh in April to 1,211 kWh in January. This variation substantially impacts your actual electricity costs.

Let’s analyze how different advertised plans perform with this real usage pattern:

Cheapest Advertised Plan at 500 kWh

• 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

This plan looks great if you use exactly 500 kWh each month.

However, like every home in our study, this one doesn’t always use exactly 500 kWh.

When usage varies from this target – which happens every month – the rate jumps to nearly 20¢ per kWh instead of the advertised 15¢.

Cheapest Advertised Plan at 1000 kWh

• 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

The 10.5¢ rate looks impressive, but it only kicks in at 1,000 kWh usage. This home only hits that usage in August.

Every other month, you’re paying significantly more – averaging 18.2¢ per kWh across the year.

Cheapest Advertised Plan at 2000 kWh

• 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

Despite advertising a competitive rate, this plan becomes the most expensive option because the home’s usage doesn’t ever come close to hitting 2,000 kWh.

Best Plan for This Home

• Power On 24
• What you actually pay: 14.1¢ per kWh
• Annual cost: $1,160.77

Like 97% of homes in our study, this plan delivers the lowest total cost because it works with real usage patterns – no usage tiers, no bill credits, no gimmicks.

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:

Month	Usage (kWh)
January	635
February	432
March	476
April	641
May	810
June	1,616
July	1,652
August	1,859
September	1,318
October	681
November	407
December	466

Usage varies dramatically here from 407 kWh to 1,859 kWh – a pattern we see consistently in similar-sized homes.

Cheapest Advertised Plan at 500 kWh

• Advertised rate: 15¢ per kWh
• What you actually pay: 21¢ per kWh
• Annual cost: $2,310.77
• Extra cost vs. best plan: $771.45

The advertised 15¢ rate becomes meaningless with this usage variation.

During summer months, when usage triples, the actual rate spikes to 21¢ per kWh – resulting in much higher bills than advertised.

Cheapest Advertised Plan at 1000 kWh

• 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

That great 10.5¢ rate vanishes with varying usage.

With summer consumption consistently above 1,500 kWh, you end up paying 16.9¢ per kWh – 60% above the advertised rate.

Cheapest Advertised Plan at 2000 kWh

• 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

Even when summer usage approaches 2,000 kWh, this plan costs substantially more than advertised due to varying usage in other months.

Best Plan for This Home

• Power On 24
• What you actually pay: 14.0¢ per kWh
• Annual cost: $1,539.32

As seen consistently across our study, steady pricing handles seasonal variations better, saving hundreds compared to plans with advertised “special” rates.

Medium+ Home (2,491 sq ft)

This usage pattern represents larger homes in our dataset:

Month	Usage (kWh)
January	757
February	665
March	860
April	851
May	1,198
June	1,620
July	2,004
August	1,966
September	1,821
October	1,227
November	958
December	736

Like other homes this size, summer usage (2,004 kWh) triples compared to winter months (665 kWh).

Cheapest Advertised Plan at 500 kWh

• 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

This home never uses the low end of advertised rates at 500 kWh in any month.

The actual rate runs 5.5¢ higher per kWh than advertised, costing nearly $1,000 more annually than necessary.

Cheapest Advertised Plan at 1000 kWh

• 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

With summer usage consistently above 1,500 kWh, this plan’s actual rate far exceeds the advertised rate, leading to significant extra costs.

Cheapest Advertised Plan at 2000 kWh

• 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

Even though usage reaches 2,000 kWh in peak months, varying usage throughout the year results in much higher actual costs.

Best Plan for This Home

• 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:

Month	Usage (kWh)
January	6,136
February	3,830
March	3,798
April	3,810
May	3,454
June	4,440
July	4,718
August	4,300
September	3,492
October	2,774
November	2,434
December	4,270

Like other homes this size, even the lowest month (2,434 kWh) exceeds all advertised rate tiers.

Cheapest Advertised Plan at 500 kWh

• 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

The 500 kWh advertised rate becomes irrelevant. The actual rate runs 8¢ higher per kWh than advertised, resulting in over $4,400 in unnecessary annual costs.

Cheapest Advertised Plan at 1000 kWh

• 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

The actual cost runs 67% higher than the advertised rate when applied to real usage patterns.

Cheapest Advertised Plan at 2000 kWh

• 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

Even the highest advertised usage tier falls well short of this home’s typical monthly usage.

Best Plan for This Home

• 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:

Month	Usage (kWh)
January	2,844
February	2,700
March	2,674
April	2,470
May	3,885
June	4,707
July	5,738
August	6,601
September	4,752
October	3,914
November	2,977
December	2,142

As seen across larger homes, even the lowest monthly usage (2,142 kWh) exceeds all standard advertised rate tiers.

Cheapest Advertised Plan at 500 kWh

• 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

The massive gap between actual usage and the advertised rate tier results in over $4,200 in unnecessary annual costs.

Cheapest Advertised Plan at 1000 kWh

• 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

The actual rate runs 67% higher than advertised when applied to this home’s usage pattern.

Cheapest Advertised Plan at 2000 kWh

• 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

Even plans designed for higher usage fall short with this home’s consumption patterns.

Best Plan for This Home

• 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.

This home’s usage pattern demonstrates why advertised rates and bill credits target an almost impossible usage pattern – and how this one home nearly perfectly matched it.

Month	Usage (kWh)
January	1,219
February	840
March	1,080
April	1,105
May	1,225
June	1,522
July	1,386
August	1,393
September	1,202
October	1,117
November	793
December	888

This usage pattern stands out for its consistency. Compare it to typical homes:

• 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)

This stability around the crucial 1,000 kWh mark makes it uniquely suited for bill credit plans. Here’s how the plans compare:

Best Plan for This Home: Saver Plus Plan 12

• 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

This plan wins because:

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

Power On 24 Plan

• Actual average rate: 13.9¢ per kWh
• Annual cost: $1,916.09
• Monthly cost range: $111.65 – $210.41
• Difference: $7.55 more annually

The consistent pricing structure that saves money for 97% of homes falls just slightly behind here – by less than $8 per year or about 63 cents per month.

Other Advertised “Cheap” Plans

• 500 kWh advertised plan: $2,234.89 annually ($326.35 more)
• 2,000 kWh advertised plan: $2,807.14 annually ($898.60 more)

This case reveals exactly what must happen for advertised rates and bill credits to work as promised: remarkably stable monthly usage that consistently hits specific targets.

Finding only three homes out of 100 with this pattern demonstrates why these plans are designed to look better than they actually perform for real Texas households.

Even in this perfect-case scenario, the bill credit plan saved less than a dollar per month compared to Power On 24’s consistent pricing.

For the other 97 homes with more typical usage patterns, these same plans cost hundreds or thousands more annually.

Most importantly, you can only determine if you’re the rare exception who might benefit from a bill credit plan by comparing plans using your actual, full year of usage data.

Looking at advertised rates or estimating your usage won’t work – you need to see how each plan performs across all twelve months of real usage.

Without analyzing these actual numbers:

• 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

This case demonstrates why shopping with your actual usage history is essential. Even though this home saved money with a bill credit plan, that only became clear after analyzing their complete usage data.

There’s no other way to know which plan will truly cost you less.

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
2. Advertised Rates Consistently Mask True Costs
   • 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
3. Consistent Pricing Saves Money
   • 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
4. The Exceptions Prove the Rule
   • 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
2. Calculate Total Annual Cost
   • Don’t focus on a single month
   • Account for seasonal changes
   • Compare total yearly costs, not advertised rates
3. Avoid Complex Plan Structures
   • Be cautious with plans offering usage credits
   • Look for consistent pricing that works year-round
   • Consider how rate structures affect your typical usage
4. Check if You Match the Exception Case
   • 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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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.

The Power On 24 plan delivered the lowest annual cost for 97% of homes in our study, despite not advertising the lowest rates. This consistent pricing saved customers hundreds to thousands of dollars annually compared to plans advertising “cheap” rates.

The two exceptions we discovered highlight the fundamental issue: even when a home achieved the ideal usage pattern for bill credits, it saved less than a dollar per month compared to a simple, consistent rate.

For 97% of real homes, attempting to hit these “perfect” usage targets results in hundreds or thousands in unnecessary costs.

To avoid overpaying, shop based on your actual annual usage data.

Don’t rely on hypothetical averages or seemingly low rates – evaluate how plans perform with your real electricity consumption across all 12 months. Consistent, stable rates outperform bill credit promotions for virtually every household.

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