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Transmission Distribution Utility (TDU) Charges in Texas

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Utility worker fixing electricity power lines

What is a TDU in Texas?

A TDU, or Transmission and Distribution Utility, is the company that is responsible for the infrastructure to deliver electricity to your home.

While different, your Retail Energy Provider can provide several different plans at different rates and contracts to you the consumer, the electricity must arrive at your home on the existing electrical infrastructure.

This is where the TDU comes in. They are responsible for the creation upkeep, and maintenance of the energy infrastructure, from the grids to your home. The TDUs in the state of Texas are governed by the PUCT, the Public Utility Commission of Texas.

What are TDU delivery charges?

The TDUs that service your address have a special charge that you may see on your electricity bill.

Since the TDU is responsible for the electric infrastructure flowing the current to your home, this charge accounts for several things, such as maintenance, servicing, and upkeep of this infrastructure, the wires, poles, transformers, and meters.

The delivery rates are passed on to you the consumer through your bill by your Retail Energy Provider, and you may see them bundled up with your existing rate or as a separate line item. These rates are charged by the TDU servicing the area in which you live, and cannot be avoided. The delivery charge you see on the bill by the REP is charged to you without a markup.

What are TDU delivery charge rates?

The delivery rates are set by the TDU governing body, the PUCT, which regulates the rates of the delivery charges, and any changes must be authorized by it.

The utility companies are allowed to recoup 100% of the costs of maintaining the electrical network infrastructure from the energy consumers. They are then guaranteed a return rate set by the regulator, the Public Utility Commission of Texas.

That is how they can keep operating in providing us the service maintaining and running such a crucial important utility such as energy.

Whenever a TDU’s costs go up, such as in case of natural disaster, or scheduled infrastructure upgrades, they may request an increase, temporary or permanent.

After a rate increase request, the PUCT will review the request by the utility company, and either approve the request or set a different rate by their own estimations.

By following this process, the TDUs can make a profit and keep operating in providing us with critical power. In addition, the regulatory PUCT make sure the profit is reasonable while keeping the consumer’s needs in mind. For both affordable energy and a reliable functioning infrastructure.

There are occasional changes to the TDU delivery charge rates, such as a recent increase of $.00033/kWh approved by the PUCT on April 1, 2020, as part of the Texas COVID-19 Electricity Relief Program. This means that every electricity customer in the state of Texas which is located in an area with a deregulated electricity market will see a small increase in their delivery charges to pay for the program. You may see this increase as a separate charge, or it may simply be added to an existing line item. The monthly increase for this relief program is minor, for example:

–          a small apartment using 500 kW will see an increase of $0.17

–          a house using 1000 kW will see an increase of $0.33

–          a larger house using 2000 kW will see an increase of $0.66

Throughout the year there may be additional changes to your delivery charges, on March 1 and September 1. These changes will be reflected in your electric bill by the Retail Energy Provider.

Changes to TDU delivery rates will be reflected in your bill, even if you had a fixed-rate plan. Whether your rate is bundled together with delivery costs, or whether it is unbundled, whenever the underlying TDU changes their delivery rates, your final electricity rate is subject to change as well to reflect the increase (or decrease).

If you have a bundled plan then you may see a new line item reflecting the change, whereas if you have an unbundled plan the delivery rate will simply change to reflect the new rate.

Current TDU delivery charge rates

Below is a table detailing what the current delivery charges are for each TDU areas in the state of Texas that participate in a deregulated energy market:

TDU NameMonthly Base ChargeConsumption ChargeUpdated
Centerpoint$4.39$0.042308/kWh9/1/2020
Oncor$3.42$0.039220/kWh9/1/2020
AEP North$3.57$0.034995/kWh9/1/2020
AEP Central$4.27$0.042929/kWh9/1/2020
TNMP$7.85$0.049093/kWh9/1/2020
TDU Base Charges in Texas (Updated 09/2020)

These rates may fluctuate throughout the year, usually going down in March and going up in September.

Additional reading

When it comes to TDU delivery charges, your Retail Energy Provider will usually just give you the bottom line. However, if you have a lot of free time on your hands, you can see what the TDU delivery charges are composed of and how they are calculated by reading the official documents at the PUCT website at:

http://www.puc.texas.gov/industry/electric/rates/TDR.aspx

Saving on power

Even though you can’t avoid the TDU charges, which are set beyond your control, you have many options to choose the power plan that fits you best, allowing you to squeeze the most value out of every kilowatt.

The energy flowing to your home comes from the same grid, regardless of which energy provider or plan you choose, so don’t wait to save more each time you turn on the lights!

Head over to our plan comparison TODAY and start saving money immediately on the electricity you already use. The power to save is in your hands. Click here to start comparing the cheapest electricity plans in Texas.