A simple threshold example
Suppose a plan gives a $100 credit when monthly usage reaches 1,000 kWh. At 1,000 kWh, the credit may make the bill look excellent. At 999 kWh, the customer could lose the full $100 while using slightly less electricity. That sudden change is sometimes called a threshold cliff.
| Monthly usage | Credit earned? | Why it matters |
|---|---|---|
| 999 kWh | No | The full uncredited price applies. |
| 1,000 kWh | Yes | The bill may drop by the stated credit amount. |
| 1,150 kWh | Usually yes | The credit helps, but added energy and delivery charges still apply. |
Not every credit works the same way
- Monthly usage credit: earned only when usage falls within or above a stated range.
- Scheduled promotional credit: applied on a stated bill or contract month.
- Time-of-use benefit: the discount depends on when electricity is used.
- Enrollment or payment credit: may require autopay, paperless billing, or another action.
Does unused credit carry forward?
Only if the plan documents say it does. Some credits can reduce a bill to zero and carry a remainder to the next bill; others cannot. Never assume rollover. The timing and limits should be taken directly from the EFL or contract documents.
Who may benefit from a credit plan?
A customer whose usage consistently meets the rule may benefit. A customer who frequently lands just below the threshold may pay considerably more. Review a full year because a plan that works in summer may perform poorly in mild spring and fall months.
What a good comparison should show
- Which months earn the credit.
- The credit amount applied to each bill.
- Any remaining credit carried into a later bill.
- The clean price before the credit.
- The estimated cost in months that miss the rule.
The example above explains the concept and is not an actual offer. Always use the current EFL for the specific plan being considered.