Bill credit electricity plans: when a $125 credit costs you money

Open any list of Texas electricity plans sorted by price and the top few will almost always be bill-credit plans. They advertise 7¢ or 8¢ per kWh when plainer plans are at 13¢ or 14¢. The gap is not a mistake and it is not a lie. It is a specific piece of arithmetic that works at exactly one usage level, and the plans are built so that level is the one they are allowed to advertise.

How a bill credit plan works

The plan charges a high energy rate, say 12¢ or 13¢ per kWh, and then gives you a fixed dollar credit, often $100 to $125, in any month where your usage lands in a range. The most common range is “1,000 kWh or more.” Some plans use a band, such as 1,000 to 2,000 kWh, and pay nothing above it.

Texas requires every plan to publish its average price at 500, 1,000 and 2,000 kWh, and lets providers advertise the 1,000 kWh number. At exactly 1,000 kWh the credit is earned, and a $125 credit on 1,000 kWh is worth 12.5¢ per kWh. Subtract that from a 13¢ energy charge, add the utility’s delivery charges, and the advertised price comes out around 7¢. The 500 kWh price on the same label is usually above 20¢, because at 500 kWh there is no credit at all. That jump between the two columns is the tell.

A real year, month by month

We priced a Carrollton home’s actual 12 months on a plan advertised at 6.9¢ with a $125 credit at 1,000 kWh or more. The home used 11,470 kWh for the year, about 956 a month on average. An average right near 1,000 kWh looks like the perfect customer for this plan.

The credit arrived in 4 of 12 months, all of them in summer. The other 8 months the home paid the full energy charge with nothing taken off, and the price in those months was closer to the 500 kWh column than the advertised one. Over the year the plan worked out to 15.1¢ per kWh and $1,727. A flat-rate plan advertised at 12.0¢, nearly double the price on paper, cost $1,384: $344 less.

The average usage was fine. The shape of the usage was the problem. Dallas homes use two to three times as much electricity in August as in March, so a home that averages 1,000 kWh spends most of the year below it.

When a bill credit plan does pay off

Credit plans win for homes whose usage clears the threshold nearly every month, not just on average. In practice that means larger homes, homes with electric heat, pools, or several people home all day. Our large home profile averages 2,000 kWh a month with a normal seasonal swing, and on it SimpleSaver 12, the plan with the lowest advertised price, ranks #87 of 388 as of November 2026, $516 a year behind the cheapest plan. For our typical home, averaging 1,000 kWh, the same plan ranks #149, $383 a year behind.

Two more cases where they can work:

• Banded credits with a wide band. A credit paid from 1,000 to 2,000 kWh suits a home that sits inside the band all year. Check your lowest and highest months against both edges.
• Short contracts over the summer. A 3- or 6-month credit plan covering June through September, when a typical home clears 1,000 kWh every month, can be cheap, as long as you switch again before the autumn months fall below the line.

How to check a credit plan against your own home

1. Find the credit’s threshold on the EFL, and whether it has an upper limit.
2. Pull your last 12 months of usage (here’s where) and count the months that land inside the range.
3. Price the months that miss the credit at the full energy charge. If more than a few months miss, the advertised price has little to do with what you’ll pay.
4. Compare the year’s total against a flat-rate plan, not the two advertised prices.

WattaWatt does this for every plan we track from a bill you upload, and shows the credit, month by month, in each plan’s simulated bills. See also how to read an EFL.