Electricity & Energy Glossary: Plain-English Definitions for Texas Households

TOU pricing exists because wholesale electricity costs on the ERCOT grid genuinely change throughout the day: demand and generation mix shift hour to hour, and retail electricity providers pass some of that variation through to TOU customers. A common Texas variant is the "free nights" or "free weekends" plan, which prices a specific low-usage window at or near zero and prices other hours higher to compensate.

TOU plans matter most for households that can actively shift load (running laundry, EV charging, or a pool pump during off-peak hours) or that pair the plan with a home battery that charges on cheap power and discharges during expensive hours.

In deregulated areas of Texas (including most of the ERCOT footprint), homeowners choose their REP for competitive pricing and plan features, but they cannot choose their TDU. The TDU (examples include Oncor, CenterPoint Energy, AEP Texas, and TNMP depending on the region) is a monopoly utility regulated by the Public Utility Commission of Texas, and its delivery charges are largely fixed regardless of the plan or provider chosen.

Understanding the TDU/REP split matters when comparing plans: the energy charge portion varies significantly by provider and plan, while the TDU delivery charge portion generally does not.

The EFL exists so households can compare plans on a like-for-like basis rather than relying on marketing headlines. Because EFLs are published as unstructured PDF documents rather than structured data, extracting accurate rate information from them at scale requires dedicated parsing: this is the kind of document AI Energy Plans processes as part of comparing active Texas electricity plans.

When comparing plans, the average price shown on the EFL at a usage level close to a household's actual monthly usage is generally more representative than a low headline rate advertised for a single usage tier.

The average Texas home uses roughly 1,000 to 1,500 kWh per month, with usage climbing well above that during peak summer cooling months. Because per-kWh rates on many plans change depending on total usage: some plans include bill credits or different rates above or below certain thresholds: a household's actual average monthly kWh usage is the single most important input for accurately comparing plan costs.

Because buyback rates and structures vary so widely across Texas: some REPs offer credit closer to the retail rate, others offer a lower wholesale-linked rate, and terms can change: the value of net metering for a specific home depends heavily on the plan chosen alongside the solar system itself. This is also why many Texas solar households evaluate pairing solar with a home battery rather than relying solely on grid export credit, since a battery lets excess solar be stored and used directly rather than exported at a potentially lower buyback rate.

Any net metering or export-credit estimate should be treated as plan-specific and modeled, not assumed; actual results depend on the household's usage pattern, system size, and the specific plan's terms.

Energy arbitrage can work with or without solar: a battery can charge from the grid alone during low-price hours. The size of the potential benefit depends on several factors together, including the specific electricity plan's rate spread between cheap and expensive hours, the battery's usable capacity and round-trip efficiency, the dispatch strategy used to control charge and discharge timing, and the household's own usage pattern. Actual savings vary by household and are not guaranteed; results should be modeled against a specific plan and usage profile rather than assumed from a general percentage.

Common dispatch approaches include time-based dispatch (charge and discharge on a fixed schedule tied to a TOU plan's rate windows), self-consumption dispatch (prioritize using solar directly and store the excess), and backup-reserve dispatch (hold back a portion of charge in case of an outage). Many modern battery systems support automated dispatch that adjusts to the specific electricity plan's rate structure. The dispatch strategy assumed in any savings estimate is one of the key modeling inputs disclosed on our methodology page.

Round-trip efficiency matters directly for energy arbitrage math: if a battery is only 90% efficient, roughly 10% of the energy stored during a cheap-rate window is lost before it can be used or exported during an expensive-rate window. This loss narrows the effective savings from any arbitrage strategy and is one of the specific assumptions we disclose when modeling battery-related savings.

Where a demand charge does apply, it rewards spreading electricity use out evenly rather than running many high-draw appliances at once, which is a different optimization than the time-shifting strategy used with Time-of-Use plans. Because demand charges are billed differently than energy charges, they are worth checking for specifically on any plan's Electricity Facts Label before assuming a household's usage pattern will translate directly into the bill estimate shown.

Texas households in deregulated areas can choose from dozens of active REPs and hundreds of individual plans, which is why plan comparison is genuinely useful rather than a formality: the same usage pattern can produce meaningfully different bills across providers and plan structures. Comparing REPs and plans on an apples-to-apples basis, using EFL data at a usage level close to actual consumption, is the most reliable way to evaluate options.