What is a Minimum Usage Fee on an Electricity Bill?

What is a minimum usage fee?

Minimum usage fees are extra costs added to electricity bills by some providers when you do not use a specified threshold of kilowatt-hours (kWh).

For example, a minimum usage fee of $9.95 may be added to your bill when your household uses 800 or fewer kWh during a billing period.

These extra costs are usually found hidden in the terms of a plan’s Electricity Facts Label (EFL) document.

Minimum usage fees may also be referred to as minimum usage charges or minimum usage requirements.

Why do electricity providers charge minimum usage fees?

Electricity providers that include minimum usage fees will list two main reasons to justify the extra costs on a bill:

Prevent financial losses from customers with low electricity usage, or manage the risk of purchasing wholesale electricity
Recover fixed costs associated with managing customers, such as maintaining a call center and processing bills

These justifications do not hold much water when closely scrutinized.

If minimum usage fees were necessary for electricity providers to manage risk when buying wholesale electricity for their customers, then every single provider would include these fees on all of the plans they offer.

The same deconstruction can be applied to the explanation associated with recouping fixed costs.

The fact is that dozens of Texas electricity companies manage risk and finances just fine without including minimum usage fees on any of their plans.

The math behind minimum usage fees

Here’s how minimum usage fees impact bills in real-life customer scenarios.

Let’s take the Reliant’s Secure Advantage 12 plan, for example. Pricing dated to March 1, 2026.

electricity facts label with minimum usage fee

The formula to calculate a bill with a minimum usage fee is:

Electric Bill = kWh Usage x (Energy Charge + TDU Delivery Charge) + TDU Monthly Fee + Minimum Usage Fee

Bill estimates at 500, 1000, and 2000 kWh are as follows:

500 kWh x ($0.107056 + $0.049993) + $4.90 + $9.95 = $93.37
1000 kWh x ($0.107056 + $0.049993) + $4.90 = $161.949
2000 kWh x ($0.107056 + $0.049993) + $4.90 = $318.998

Now let’s compare to our Bluebonnet 12 plan.

electricity facts label without minimum usage fee

Bill estimates at 500, 1000, and 2000 kWh are as follows:

500 kWh x ($0.08508 + $0.049993) + $4.90 = $72.44
1000 kWh x ($0.08508 + $0.049993) + $4.90 = $139.97
2000 kWh x ($0.08508 + $0.049993) + $4.90 = $275.05

You can save money at every single usage level on a plan with a lower energy charge, and that does not include a minimum usage fee.

Minimum usage fees vs other common charges

Minimum usage fees are not the only extra charges that some providers try to sneak onto Texas energy bills without customers realizing.

Let’s explore some other common fees.

Fee	Description
Minimum usage fee	A fee is applied when a specific usage threshold is not met.
Base charge	A fee is applied to every bill, regardless of usage.
Setup/bundle fee	A fee is applied to the first bill only, which is meant to cover starting service.

Who usage fees impact the most

Because minimum usage fees are only applied when your household does not use “enough” kilowatt-hours (kWh) during a bill period, the impact of the extra costs falls exclusively to Texans who use less power:

People who live in studio apartments
People who live in smaller 1-2 bedroom apartments
People who live alone
People who live in homes with solar panels

In all of these lifestyle scenarios, it is very likely that your monthly usage would not exceed the threshold required to avoid the minimum usage fee. This could mean that you are paying a high effective rate or average price per kWh without realizing it.

The result? Electricity providers are penalizing customers for not using enough power. At BKV Energy, we do not believe in charging Texans more for conserving energy.

How to find out if your plan has a usage fee

The easiest way to determine whether your plan includes minimum usage fees is to check your plan’s Electricity Facts Label.

The charge will be clearly labeled in the cost breakdown section just below the average price table.

You may also check your previous bills to determine whether you’ve actually paid a minimum usage fee in the past.

How to avoid minimum usage fees

There are two ways to avoid minimum usage fees on your electricity bills.

Use enough kWh to avoid the charge
Avoid signing up for a plan that includes a minimum usage fee in the first place

At BKV Energy, we do not include minimum usage fees, base charges, or setup/bundle fees on our plans because transparency and simplicity are core to our business.

In fact, with the Bluebonnet plan, we actually give back to our customers in several ways.

ElectroShare: An annual loyalty payout that grows the longer you stay with us
Reduce Your Rate: Opportunities to switch to a cheaper energy charge mid-contract, for free
VoltPoints: Monthly reward points that can be used to win prizes like cash, gift cards, laptops, and more

If you’re interested in switching to an affordable fixed-rate plan without gimmicks or hidden fees, enter your zip code to shop our plans.

Written by Graham Lumley

Graham Lumley, Growth Product Manager at BKV Energy, leads digital and traditional marketing strategies, focusing on educating Texans about the state's deregulated energy market. With over 10 years of marketing experience, he creates content to help consumers understand and save on their energy bills, bringing a fresh and dynamic approach to the industry.