What Are Advertised Rates?

Spot Hidden Costs and Avoid Pricing Traps

So, you’re shopping around for an electricity plan in Texas, and you see rates displayed on provider websites, ads, and shopping marketplaces.

But what do those rates really mean, and is that what you’ll actually pay?

These rates, called advertised rates, are required by law and are based on specific monthly usage levels: 500 kWh,1,000 kWh, and2,000 kWh.

At first glance, it might seem like an easy way to compare plans - but here’s the catch: almost no one uses exactly 500, 1,000, or 2,000 kWh of electricity each month.

Key Takeaways

Advertised rates can be misleading: These rates only apply at specific usage levels (500, 1,000, or 2,000 kWh), meaning your actual cost can be much higher if your usage doesn’t match exactly.
Most plans hide the true cost: Providers design plans to look appealing at certain usage points, but the real cost of the plan often spikes if your usage fluctuates even slightly.
Find your true cost: Live Link™ helps you avoid misleading rates and shows you plans’ real cost based on your energy use.

What Are Advertised Electricity Rates?

Advertised rates are the prices energy providers are required to display for their plans, based on the specific usage points mentioned above.

They’re designed to help you compare plans easily, but the truth is, these rates only reflect what you’ll pay if your monthly usage is exactly at those points.

Since almost no one uses exactly 500, 1,000, or 2,000 kWh every month, the advertised rate that caught your attention might not be what you end up paying.

Let me explain why these rates can be misleading and how they affect your electricity bill.

How Advertised Rates Can Be Misleading

Electricity providers in Texas are required to display rates for 500 kWh, 1,000 kWh, and 2,000 kWh of monthly usage, pulled directly from each plan’s Electricity Facts Label (EFL).

While this helps consumers quickly compare plans, these rates only apply if you use exactly those amounts.

For example, a plan may advertise 10.9 cents per kWh at 1,000 kWh, but if your usage is 999 kWh or 1,001 kWh, your cost could increase significantly.

Providers often design their plans to look cheap at these specific usage points, but the price per kWh can spike if your usage falls outside those exact numbers, leaving you with a much higher bill than expected.

Since most people’s usage fluctuates month to month, it’s easy to get caught off guard.

Why Your Usage Fluctuates

Your electricity consumption varies depending on the time of year, how many people are in your home, and even how much time you spend there.

In the summer, your usage might spike because of air conditioning.
In the winter, it could dip if you don’t need as much heat or energy.
Other factors, like guests or lifestyle changes, can also impact how much electricity you use each month.

Because your usage fluctuates, advertised rates rarely reflect what you’ll actually pay on your electricity bill.

How We Fixed the Problem

We built Compare Power to solve this exact problem.

Unlike other comparison websites, Compare Power goes beyond showing you the advertised rates at 500 kWh, 1,000 kWh, or 2,000 kWh.

Instead, we factor in your actual usage history to show you the true cost of a plan over time.

This way, you can see what you’ll really pay, even when your usage fluctuates.

The Historical Usage Calculator

Years ago, we introduced the Historical Usage Calculator, which lets you input your past electricity usage to see how different plans would impact your costs over the course of a year.

It smooths out those spikes and dips in your usage and reveals the true cost of a plan based on your actual consumption patterns.

By factoring in your high-usage months (like those hot Texas summers) and lower-usage periods, you can avoid plans that seem affordable at first but end up costing you more.

Millions of Texans have used Compare Power to make smarter, more informed electricity decisions.

With over 72,000 5-star reviews, the Historical Usage Calculator has helped countless Texans save on their bills.

Introducing Live Link ™

Now, we’ve made it even easier with Live Link™.

Instead of manually entering your past usage, Live Link™ automatically pulls your real usage data from your Transmission and Distribution Utility** **(TDU).

Here’s how Live Link™ simplifies the process:

No manual entry: Your usage data is pulled directly from your TDU.
Accurate comparisons: We use your real usage history to calculate the actual cost of electricity plans available to you.
Instant results: With just a few clicks, you’ll see which plans are truly the best fit for your household’s energy consumption.

Live Link™ takes the guesswork out of finding the right plan for your home.

How to Avoid Advertised Rate Traps

So, how do you avoid falling into these traps? The key is not to rely solely on the rate advertised at 1,000 kWh or any other fixed point.

Instead, focus on how a plan works across a full year of usage.

Here’s what you can do:

Look for flat-rate plans: These plans offer consistent pricing across different usage levels, so you’ll have fewer surprises even when your usage fluctuates.
Know your usage: You can log into your electricity provider’s dashboard, use Smart Meter Texas for 15-minute interval data, or use Live Link™ to pull your real usage data for accurate comparisons automatically.
Use Live Link™: Live Link™ lets you compare plans based on your actual consumption rather than relying on advertised rates that may not apply to you.

Don’t Be Fooled by Advertised Rates

Advertised rates are only a small part of the story when it comes to choosing the right electricity plan.

Very few people use exactly 1,000 kWh every month, and plans that seem cheap at that usage level can be far more expensive when your actual usage is considered.

Live Link™ gives you the full picture of each plan’s cost, helping you find the best deal for your home without any surprises.

Start Saving Today

Ready to see how much you could save?

Connect your home to Live Link™, instantly access your usage data, and find the best electricity plan tailored to your household.

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Written by

Enri Zhulati

Senior Director of Product

Senior Director of Product at Compare Power. 8+ years guiding Texans to smarter energy choices through data-driven tools and editorial excellence.