Understanding bill credits
Are bill-credit electricity plans worth it?
A bill credit is a set dollar amount taken off your bill in any month you use at least a set amount, often 1,000 kWh. Whether it is worth it depends on how often your home reaches that amount.
Published · Updated
6 of 12 months earn the credit for this example home
Illustrative, not a current offer. The months are an 1,100 kWh average home spread across the Texas seasonal pattern shown in our first article.
Why can a credit make a plan look so cheap?
Some plans pay a credit when a month's usage reaches a set level, often 1,000 kWh. In the months it applies, the effective price drops sharply — and the advertised rate at 1,000 kWh already includes it.
That is the best case, and the average Texas home misses it half the year. By U.S. Energy Information Administration figures, it uses 1,000 kWh or more in only 6 of 12 months. A home that uses less than average reaches it even less often.
A credit only helps in the months you actually earn it.
Does the credit shrink when you use more?
A bill credit is a fixed dollar amount, so the more you use, the thinner it is spread. A $100 credit takes 10¢ off every kWh at 1,000 kWh, but only 5¢ at 2,000 kWh.
Monthly usage
Credit on each kWh
1,000 kWh
10¢
1,500 kWh
6.7¢
2,000 kWh
5¢
At 2,000 kWh the credit takes 5¢ off each kWh, half the 10¢ it is worth at 1,000 kWh.
Example plan: 15¢ per kWh with all charges included, and a $100 bill credit at 1,000 kWh or more. Illustrative, not a current offer.
Why can two months on one plan cost so differently?
950 kWh
Credit missed
Estimated bill
$143
No credit below 1,000 kWh
1,100 kWh
Credit earned
Estimated bill
$65
$165 minus the $100 credit
150 kWh more usage, about $78 less on the bill.
Example plan: 15¢ per kWh with all charges included, and a $100 bill credit at 1,000 kWh or more. Illustrative, not a current offer.
On the same plan, a 950 kWh month misses the credit and a 1,100 kWh month earns it, so the bigger month can cost far less. That is why an advertised average can miss what happens to your annual cost.
Is a bill-credit plan a bad choice?
A bill credit is not a trick, and a bill-credit plan is not automatically a bad plan. If your usage sits inside the plan's sweet spot most months, the credit can make it an excellent fit. The job is to match the pricing rule to the household.
Find the magic number
The monthly usage where the credit switches on. Fall one kWh short and it pays nothing.
Count your winning months
Summer usually clears the bar. Spring and fall often do not.
Judge all twelve bills
One great month does not make a great plan. The whole year decides.
You should not have to do this math
Power Rate Check applies each plan's rules month by month, estimates the year for your usage, and shows you the plan facts that matter before you go to the provider.
Let us do the cross-check
Use your household usage and see which plan is likely to cost the least across the year.
Find my best planArticles are general information for Texas electricity shoppers. Every cost Power Rate Check shows is an estimate, and the Electricity Facts Label is the provider's official price document — read it before you sign.