Yes, that's correct - peak handling is 500mw, average is 250mw.
On an ESU LokSound, I'd probably start with the main volume at something like 80, instead of the 180 that is the factory default. That's a little over 1/4 of full volume, but less than 1/2. This is one of the reasons I want to test this speaker - to see if the sound output is reasonable given the low power handling rating and also to see what an appropriate volume level would be (I currently set master volume to about 120 on my LokSounds).
John