How bill credits work on Texas electricity plans (and the 999 kWh cliff)

Some of the lowest prices you will see on a Texas plan list are not low every month. They come from bill credits: a flat discount that only applies when your usage crosses a line. Understanding that line is the single most useful thing you can do before choosing a plan.

How a bill credit works

A typical credit reads like this: "A bill credit of $125 will be applied for each billing cycle in which usage is 1,000 kWh or more." In months at or above 1,000 kWh, $125 comes off the bill. In months below it, nothing comes off.

Texas rules require every plan's Electricity Facts Label (EFL) to show an average price at 500, 1,000 and 2,000 kWh a month. If the credit starts at 1,000 kWh, the 1,000 kWh column already includes it. That is why some plans advertise a 1,000 kWh price that is roughly half the price at 500 kWh.

A real example: the 999 vs 1,000 kWh cliff

Here is one plan from our data as of October 2026: Express Energy Flash Value 12 in the Oncor area. Its EFL lists 20.3¢ at 500 kWh, 7.4¢ at 1,000 kWh and 13.5¢ at 2,000 kWh, with a $125 credit in cycles of 1,000 kWh or more. Rebuilding the bill from those three prices gives these estimates:

One extra kilowatt-hour, from 999 to 1,000, lowers the estimated bill by about $125. That is the cliff.

This is not a flaw in the plan; it is how the pricing is designed, and the terms are disclosed. The question is whether your home stays above the line.

How often does an average home miss the credit?

Texas usage is heavily seasonal. On the seasonal profile we use, a home that averages 1,000 kWh a month uses about 1,500 kWh in August but only about 700 kWh in April. In fact it falls below 1,000 kWh in 8 of 12 months (January through May, and October through December).

For the example plan, that means the estimated annual cost for a 1,000 kWh-average home is about $1,892. If the same home used exactly 1,000 kWh every month, it would be about $892. As of October 2026 the plan ranks 116th of 127 default-ranked Oncor plans on our annual estimate for that home, even though its 1,000 kWh price is among the lowest on the list.

The picture changes for bigger homes. For a home averaging 1,500 kWh, even the mildest months on our profile stay above 1,000 kWh, and some credit plans move to the top of the ranking. That is why we rank on your own usage over a full year rather than on a single price.

How to spot a bill credit in the EFL

1. Compare the three prices. If the 1,000 kWh price is far lower than the 500 kWh price, and the 2,000 kWh price jumps back up, a credit is likely.
2. Read the pricing section. Look for "bill credit", "usage credit" or "minimum usage". Note the threshold and whether it says "1,000 kWh or more" or "greater than 1,000 kWh".
3. Check for a ceiling. Some credits only apply between two levels, for example 1,000 to 2,000 kWh.
4. Check your history. Count how many of your last 12 months were below the threshold. Your bills or Smart Meter Texas will show this.
5. Look at the cancellation fee and term. A credit plan you outgrow can be expensive to leave early.

What we do with bill credits

When a plan's fees and credits text describes a credit, we read the amount and threshold and rebuild a month-by-month bill. Plans with credits carry a badge, and our estimate counts how many months you would miss the credit. Our parsing can miss unusual wording, so always confirm the terms in the EFL linked from each plan.

To see how credit plans compare for your area, start from Oncor plans, CenterPoint plans or the full plan search. For more on reading the label itself, see how to read an EFL, and for usage patterns see how much electricity a Texas home uses.

All costs here are estimates based on published prices and a modeled usage profile. Your actual bill depends on your real usage, taxes and any charges not included in the average price.