Reading a Texas Commercial Electricity Facts Label, One Line at a Time

A Texas commercial electricity facts label (EFL) is the standard disclosure a retail electric provider (REP) must publish for every small commercial product it sells. Read it in a fixed order: who is selling, whether the price is fixed or variable, the average price at 1,500, 2,500 and 3,500 kWh, what that price includes and leaves out, the term and cancellation fee, and the two documents that complete the contract.

Those three usage levels are the first thing to check, because they're where most EFL guides go wrong. The Public Utility Commission of Texas (PUCT) sets them in 16 TAC 25.475(g)(2)(C): residential labels price at 500, 1,000 and 2,000 kWh per month, and small commercial labels price at 1,500, 2,500 and 3,500 kWh. This guide walks a small commercial EFL from top to bottom using the rule text and the texascommercialplans.com dataset of published commercial rate cards. For the wider picture of how commercial rates are built, start with our complete guide to commercial electricity rates in Texas.

Key takeaways

A small commercial EFL states the total average price in cents per kWh, rounded to the nearest tenth of a cent, at 1,500, 2,500 and 3,500 kWh per month (16 TAC 25.475(g)(2)(C)(ii)).
The average price includes every recurring charge, including the TDU delivery charges on each bill, and excludes state and local sales taxes and the gross receipts tax reimbursement (25.475(b)(8)).
As of November 3, 2026, 91.4% of the 15,715 active small commercial plan rows in our dataset are quoted energy-only, so a rate card number and an EFL average price measure different things.
Where a cancellation fee structure is published, 89.9% of rows charge it per month remaining on the contract.
REPs have been barred from offering indexed products to small commercial customers since February 1, 2022, so a small commercial EFL describes either a fixed rate product or a variable price product.

What is a commercial electricity facts label?

A commercial electricity facts label is a PUCT-required disclosure that states one product's average price, contract term, fees and renewable content in a standard format. The rule requires a separate EFL for each product and a version number on every label, so two plans from the same REP never share one.

The EFL is one of four pieces of your contract. Section 25.475(b)(1) defines the contract as the Terms of Service, the EFL, the Your Rights as a Customer (YRAC) document and the record of your enrollment. The REP must give you the Terms of Service, EFL and YRAC when you enroll, again whenever one of them changes, and free on request at any time (25.475(c)(1)(C)). It also has to keep every version for four years after the contract stops being in effect for any customer (25.475(c)(1)(D)).

The format rules exist to keep the label readable. Each EFL must be printed in type no smaller than 10 points, in paragraphs of no more than 250 words, and it must be printable in no more than two pages (25.475(c)(2)(A) and (c)(4)(B)). The PUCT compares the label to the nutrition label on food and says it lets customers make an "apples-to-apples" comparison of offers (PUCT). Power to Choose, the state's shopping site, lists residential offers only, so a business has to collect its EFLs directly from REPs (see Power to Choose for business).

A standard format hasn't ended the confusion. In 2016, then-PUCT Chairman Donna Nelson said some providers had "all these tricky little things in their prices" and that the label "makes it really difficult for customers" (Texas Tribune, Feb. 11, 2016). Reading the label in the same order every time is the practical defense.

Which businesses get a small commercial EFL?

A business gets a small commercial EFL when it's a non-residential customer with a peak demand of less than 50 kilowatts during any 12-month period. That's the definition of a small commercial customer in 16 TAC 25.471(d)(11). If your bill shows a peak demand reading, check the highest month in the last year against 50 kW.

The definition has one exception. A customer whose load is part of an aggregation program with a combined peak demand above 50 kW in the same 12 months isn't a small commercial customer. Above the threshold, the full disclosure package isn't guaranteed: Section 25.471(a)(3) lets non-residential customers outside the residential and small commercial classes agree to terms with higher or lower protections than the rules otherwise require, as long as the agreement is in writing. Those larger accounts are priced by individual quote, which is why our dataset covers the under-50 kW class only.

How do you read an EFL from top to bottom?

The most reliable way to read an EFL is to take its sections in the order the PUCT requires and answer one question per section before you move on. We call this the Eight-Line EFL Read. Each line maps to a disclosure in 25.475(g) or to one of the two companion documents that finish the contract.

Who is selling, and which version of the label is this?
Is the product a fixed rate product or a variable price product?
What is the average price at 1,500, 2,500 and 3,500 kWh?
What's inside that average price?
What does that average price leave out?
What do the term and cancellation fee commit you to?
What does the renewable content line say?
What do the Terms of Service and YRAC add?

Keep a copy of every label you compare. The EFL is a contract document, the REP must comply with its contracts (25.475(c)(2)(H)), and in a dispute any vagueness or ambiguity in the contract is read in the customer's favor (25.475(c)(2)(F)). The rule also states plainly that "Nothing in this subsection precludes a REP from charging a price that is less than its EFL would otherwise provide" (25.475(g)).

Line 1: Who is selling, and which version are you holding?

The top of every EFL must show the REP's certified name and any business name, its mailing address, its PUCT certification number and a toll-free phone number with hours of operation and time zone (25.475(g)(1)). The label also has to carry its own version number (25.475(g)(7)).

Write down both numbers. The certification number lets you confirm the seller against the PUCT's market directories before you sign. The version number is how you prove which terms you agreed to. When a REP re-enrolls an existing customer by recorded or written consent, that consent has to name the identification number of the Terms of Service and EFL you'll be served under (25.475(e)(3)(B)).

Line 2: Is the price fixed or variable?

Every small commercial EFL has to say whether the product is a fixed rate product or a variable price product, using those terms (25.475(c)(2)(D)). That one label decides whether the price you're reading holds for the whole term or only for your first billing cycle.

A fixed rate product must run at least three months, and its price, including all recurring charges, stays the same in each billing period (25.475(b)(5)). "Fixed" still has three exceptions written into the definition. The price can move to reflect actual changes in TDU charges, changes to ERCOT or Texas Regional Entity administrative fees charged to loads, and new or changed fees imposed by federal, state or local law. Ancillary service costs can't be passed through unless the commission designates a specific product as beyond the REP's control. When a fixed price does change under those exceptions, each bill must show the change as a separate line item or carry a conspicuous notice that the amount may include changes allowed by law (25.475(d)(2)(B)).

A variable price product's EFL shows the price for the first billing cycle only. It has to carry a bold notice that the price "may change in subsequent months at the sole discretion of" the REP, or, if the product caps month-to-month increases, a notice stating that cap as a percentage (25.475(g)(2)(E)). The REP must also publish the current price on its website and through a toll-free number, and the EFL has to say how to get it (25.475(c)(2)(G)).

There's no third option for a small business. REPs, brokers and aggregators have been barred from offering wholesale indexed products to residential and small commercial customers since September 1, 2021, and indexed products since February 1, 2022 (25.475(c)(3)(F)). Our dataset reflects the rule: as of November 3, 2026, 14,942 active rows (95.1%) are fixed and 772 (4.9%) are variable, which together account for all but one of the 15,715 active rows, and every variable row is month-to-month. Our guide to fixed vs variable commercial plans covers when each one makes sense.

Line 3: Why does a commercial EFL price at 1,500, 2,500 and 3,500 kWh?

A small commercial EFL prices at 1,500, 2,500 and 3,500 kWh per month because 16 TAC 25.475(g)(2)(C)(ii) sets those three levels for the small commercial class. Residential labels use 500, 1,000 and 2,000 kWh. Each figure is the total average price in cents per kWh, rounded to the nearest one-tenth of a cent.

Customer class	Usage levels on the EFL	Demand assumption	Rule
Residential	500, 1,000 and 2,000 kWh per month	None stated	25.475(g)(2)(C)(i)
Small commercial (under 50 kW)	1,500, 2,500 and 3,500 kWh per month	30 percent load factor if demand charges apply	25.475(g)(2)(C)(ii)

This is where AI answers and generic guides trip. When we asked an AI search engine how a Texas small business should read a commercial EFL on November 3, 2026, it described 500, 1,000 and 2,000 kWh as the commercial levels and treated 1,500, 2,500 and 3,500 kWh as a conflicting claim. The rule text isn't ambiguous. If a label offered to your business prints the residential levels, ask the REP to confirm the product is a small commercial product and to send the label written for that class.

The three levels also show how the price behaves as usage rises. Fixed monthly charges, such as a REP base charge or a TDU customer charge, are spread over more kWh at 3,500 kWh than at 1,500 kWh, so the average usually falls as usage climbs. A usage credit or a tiered energy charge can break that pattern, which is why you read all three numbers and not just the middle one.

Line 4: What's inside the average price?

The average price on a small commercial EFL includes every recurring charge: the REP's energy charge, any REP base charge and the TDU delivery charges that appear on each bill. Section 25.475(b)(8) defines price as all recurring charges, including ancillary services, and a recurring charge is one expected on every bill or in three or more billing periods in 12 months (25.475(b)(9)).

That definition is why an EFL number usually sits well above the rate a provider advertises. In our dataset, 14,362 of 15,715 active small commercial rows (91.4%) are quoted energy-only as of November 3, 2026, meaning the published rate leaves out TDU delivery. The median quoted rate in each of the five TDU territories sits between 6.3 and 6.5 cents per kWh (rates by territory). An EFL average adds delivery and fixed charges on top, so putting a 6.4-cent rate card next to another REP's EFL average compares two different measures. Our commercial rate comparison worksheet shows how to line quotes up once you have every label.

Base charges are less common than many guides imply. Of the 4,584 active rows where a REP publishes a base charge figure, 3,561 (77.7%) charge one, and the median is $4.95 a month, which is also the 25th and 75th percentile. Those 3,561 rows are 22.7% of the full dataset. Spread across the three EFL levels, a $4.95 base charge adds:

about 0.33 cents per kWh at 1,500 kWh
about 0.20 cents per kWh at 2,500 kWh
about 0.14 cents per kWh at 3,500 kWh

A worked example makes the stack visible. The table below builds the three EFL prices for a hypothetical fixed rate product. The energy charge is close to our dataset's median quoted rate and the base charge is the dataset median. The TDU charges are round illustrative figures, not any utility's tariff, so swap in your own TDU's current charges.

Component	1,500 kWh	2,500 kWh	3,500 kWh
Energy charge at 6.4 cents per kWh	$96.00	$160.00	$224.00
REP base charge	$4.95	$4.95	$4.95
TDU customer charge (illustrative, $8.00 per month)	$8.00	$8.00	$8.00
TDU delivery charge (illustrative, 4.0 cents per kWh)	$60.00	$100.00	$140.00
Monthly total before taxes	$168.95	$272.95	$376.95
Average price shown on the EFL	11.3 cents	10.9 cents	10.8 cents

The same product quoted as 6.4 cents on a rate card shows 11.3 cents on its label at 1,500 kWh. Neither number is wrong. They answer different questions.

Line 5: What does the average price leave out?

The EFL average price leaves out state and local sales taxes and the reimbursement for the state miscellaneous gross receipts tax (25.475(b)(8)). It also leaves out non-recurring charges and any special TDU charge that applies only in part of a service area, such as an underground service charge, which the label must flag in its price section (25.475(g)(3)(A)).

Taxes weigh more on a business than on a household. The Texas Comptroller treats commercial electricity as subject to the 6.25 percent state sales tax plus local sales tax of up to 2 percent, while residential use is generally exempt (Comptroller publication 96-1309). A REP doing business in an incorporated city also owes the miscellaneous gross receipts tax: 0.581 percent in cities of more than 1,000 but under 2,500 people, 1.07 percent from 2,500 to under 10,000, and 1.997 percent at 10,000 or more (Comptroller MGRT FAQ). Some REPs itemize a reimbursement of it on the bill.

Fees are disclosed even when they aren't in the average. The EFL must list every fee the REP may charge and say whether each one is included in the recurring charges (25.475(g)(3)(B)). The Terms of Service itemizes the rest, including late payment, returned check and out-of-cycle meter read charges (25.475(f)(2)).

Federal data shows the same gap between a rate card and a real bill. The U.S. Energy Information Administration's preliminary average price for Texas commercial customers was 8.96 cents per kWh in August 2026, against 14.47 cents for the U.S. commercial sector (EIA Electric Power Monthly, Table 5.6.A, released October 23, 2026). That's total revenue divided by total sales across every commercial account in the state, large and small, so it's context and not a benchmark for any one label.

How do demand charges show up on a small commercial EFL?

If demand charges apply to a product, the EFL must calculate its three average prices assuming a 30 percent load factor (25.475(g)(2)(C)(ii)). Load factor is average demand divided by peak demand, so the assumption fixes how many kilowatts of peak the label imagines at each usage level.

The arithmetic is simple. In an average month of 730 hours, peak demand equals monthly kWh divided by 730 hours times the load factor:

Monthly usage on the EFL	Implied peak at 30% load factor	Implied peak at 20% load factor
1,500 kWh	about 6.8 kW	about 10.3 kW
2,500 kWh	about 11.4 kW	about 17.1 kW
3,500 kWh	about 16.0 kW	about 24.0 kW

That table is our arithmetic, not a rule, and it shows why the assumption matters. A business that draws power in short bursts, such as a kitchen at lunch or a shop with a large compressor, runs a lower load factor and a higher peak for the same kWh. On a product that bills demand, that business pays more per kWh than the label's 30 percent assumption shows. A business that runs flat around the clock does the opposite.

Two documents tell you whether demand is billed. The Terms of Service for a small commercial product must describe any demand charge and how it's applied (25.475(f)(2)(B)), and your TDU's tariff governs demand billing on the delivery side. None of the 15,715 active rate cards in our dataset carries a REP demand charge, so for most small commercial products the demand question gets answered on the delivery side of the bill.

Line 6: What do the term and cancellation fee commit you to?

The term section must state the length of the contract, any minimum service term and any early termination penalty (25.475(g)(4)). For a small business, the cancellation fee formula is the line worth reading twice, because it sets the price of changing your mind halfway through a contract.

In our dataset, 3,355 active rows publish a cancellation fee structure as of November 3, 2026. Of those, 3,016 (89.9%) charge per month remaining on the contract, 304 (9.1%) charge a flat fee and 35 (1.0%) charge per kWh. Where a flat fee amount is published (158 rows), the median is $150. A per-month fee shrinks as the contract runs: at a hypothetical $15 per remaining month, leaving with 20 months left costs $300 and leaving with 4 months left costs $60. The median term across active term contracts is 21 months, with half of all rows between 12 and 36 months.

The rule also gives a small business four ways out without the fee:

Moving: a contract covers one location, and no early termination fee applies if you move, give a forwarding address and, if asked, reasonable evidence you no longer occupy the location (25.475(c)(2)(C)).
The last 14 days: no termination penalty applies to a small commercial customer in the 14 days before the contract end date (25.475(e)(2)(C)(ii) and (iii)).
Month-to-month: a contract of 31 days or less can't carry a termination fee or penalty (25.475(b)(7)).
Rescission: on a switch, you can rescind without a fee within three federal business days after receiving the Terms of Service (25.475(f)(4)(A)(i)).

Line 7: What does the renewable energy line tell you?

The renewable line must show two percentages: the share of renewable energy in the product and the share in the statewide average generation mix (25.475(g)(5)). Reading the two side by side tells you whether the product is greener than the grid average, about the same or below it.

A REP's renewable claim has to be backed. The rule requires renewable sales to be authenticated under 16 TAC 25.476, and a REP relying on supply contracts must file an annual compliance report with the commission by March 15 (25.475(i)(4)). In our dataset, 660 of 15,715 active rows (4.2%) list 100 percent renewable content. For the grid side of the comparison, ERCOT publishes generation by fuel type on its generation page.

Line 8: What do the Terms of Service and YRAC add?

The Terms of Service and the YRAC finish what the EFL starts. The Terms of Service holds the non-recurring fees, deposit rules, termination terms, the demand charge description for small commercial customers and the contract expiration rules (25.475(f)). The YRAC summarizes complaint handling, billing, disconnection and privacy protections (25.475(h)).

Three Terms of Service items matter most at renewal time:

Default renewal product: every contract must include the terms of the product you'll be moved to if you don't choose one (25.475(c)(3)(D)). If you take no action after the final notice, the REP must serve you on a month-to-month product you can cancel at any time without a fee, and its price may vary between billing cycles (25.475(e)(2)(A)).
Expiration notices: a REP must send at least three written notices during the last third of a fixed rate contract, and for a small commercial customer the final notice must arrive at least 14 days before the contract expires (25.475(e)(1)(A)).
Contract changes: a REP can't change a term contract's price, except as the definitions allow, or its length during the term, and other changes need at least 14 days' written notice unless they benefit you (25.475(d)).

How do you turn an EFL into an estimate of your own bill?

Turn an EFL into a bill estimate by finding your real monthly kWh, picking the closest of the three label levels, and rebuilding the price from its components at your own usage. Interpolating between two label levels works as a rough check, but the component math is more accurate.

Pull 12 months of usage from your bills and note the highest, lowest and typical month.
Find the label level closest to your typical month: 1,500, 2,500 or 3,500 kWh.
Copy the price components from the label: the energy charge, any base charge and the TDU charges it lists.
Rebuild the monthly cost at your usage, as in the Line 4 table. At 2,000 kWh, the hypothetical product above costs $220.95 before taxes, or about 11.0 cents per kWh.
Repeat for your highest and lowest months, then add sales tax and any gross receipts reimbursement.
Run the same steps on every EFL you're comparing, at the same usage.

Usage swings matter because few businesses sit at one level all year. Talking about plans priced by usage band, AARP Texas's Tim Morstad put it plainly: "for some people, it's not realistic to say that each month, month in and month out, you're going to hit this perfect band" (NBC 5 Dallas-Fort Worth, Aug. 23, 2022). A business that peaks in summer should test its July bill, not its April one.

What should you do with the label once you've read it?

Once you've read all eight lines, keep the label, note its version number and compare it with other labels at your own usage, not only at the label's three levels. Then check the published rate bands for your TDU territory so you know where a quote sits before you sign.

Our rates by territory page shows the low, median and high published commercial rates in each of the five TDU areas. If you want every published plan in one place, our plan dataset holds each plan's rate, term, base fee and rate structure in a single file.

Frequently Asked Questions

What usage levels does a Texas small commercial EFL show?

A Texas small commercial EFL shows the average price at 1,500, 2,500 and 3,500 kWh per month, set by 16 TAC 25.475(g)(2)(C)(ii). Residential labels use 500, 1,000 and 2,000 kWh. Each price is rounded to the nearest tenth of a cent.

Why is an EFL price higher than the rate a provider quoted?

The EFL average price includes every recurring charge, including TDU delivery charges, while most published commercial rates are energy-only. As of November 3, 2026, 91.4% of the active small commercial rows in our dataset are quoted energy-only.

Does a commercial EFL include sales tax?

No. The EFL average price excludes state and local sales taxes and the gross receipts tax reimbursement. Commercial electricity in Texas is subject to the 6.25 percent state sales tax plus local sales tax of up to 2 percent.

Can a small business get an indexed electricity plan in Texas?

No. REPs, brokers and aggregators may not offer indexed products to small commercial customers on or after February 1, 2022, or wholesale indexed products on or after September 1, 2021. A small commercial EFL describes a fixed rate product or a variable price product.

Is there a cancellation fee if a business moves?

No early termination fee applies if the business moves, provides a forwarding address and, if the REP asks, reasonable evidence that it no longer occupies the location, under 16 TAC 25.475(c)(2)(C). The contract covers only the location it names.

Do businesses above 50 kW get an EFL?

Not necessarily. The EFL rule covers residential and small commercial customers, meaning a peak demand under 50 kW. Larger non-residential customers can agree in writing to terms with different protections and are usually priced by individual quote.