Delivery Charges on Your Texas Electricity Bill Explained

The Charge You Cannot Shop Around

When you shop for electricity in Texas, you compare rates from different providers. But there is a major chunk of your bill that is the same no matter who you pick: TDU delivery charges.

TDU stands for Transmission and Distribution Utility. This is the company that owns and maintains the physical power lines, transformers, substations, and meters in your area. In Texas, the four main TDUs are Oncor (Dallas-Fort Worth and surrounding areas), CenterPoint (Houston area), AEP Texas (Corpus Christi, Laredo, and parts of West Texas), and TNMP (parts of North and Central Texas).

You did not choose your TDU. It is determined by your address. And you cannot switch to a different one.

What Delivery Charges Actually Pay For

Delivery charges fund the infrastructure that makes electricity work. When a power plant generates electricity, it has to travel through hundreds of miles of high-voltage transmission lines, step down through substations and transformers, and then flow through local distribution lines to your meter.

All of that infrastructure costs money to build, maintain, and upgrade. Tree trimming, storm repairs, meter reading, line maintenance, and equipment replacement are all funded through your delivery charges.

After Winter Storm Uri in 2021, TDUs faced massive repair costs. Some of those costs have been folded into delivery charges, which is one reason they have increased over the past few years.

Breaking Down the Delivery Charges

Your bill typically shows several TDU-related line items:

Metering charge. A flat monthly fee for your smart meter and the data infrastructure behind it. Usually $3-$6 per month.

Delivery charge. A per-kWh fee for distributing electricity through local power lines. This is typically 2-4 cents per kWh and is the largest TDU charge.

Transmission charge. A per-kWh fee for moving electricity across the high-voltage grid from power plants to your local area. Usually 1-2 cents per kWh.

System benefit fund. A small per-kWh charge mandated by the state to fund energy assistance programs. Less than half a cent per kWh.

Transition charges. In some areas, these cover legacy costs from the transition to the deregulated market. They are being phased out but still appear on some bills.

How Much Do They Add?

For a household going through 1,200 kWh per month, TDU delivery charges typically add $40-$70 to your bill. The exact amount depends on your TDU.

Here are approximate monthly delivery costs at 1,200 kWh:

• Oncor: $45-$55
• CenterPoint: $50-$65
• AEP Texas: $50-$60
• TNMP: $40-$50

These numbers change periodically as the PUCT approves rate adjustments. Check your most recent bill for the current rates.

Why the Advertised Rate Is Misleading

When a provider advertises an electricity rate of 10 cents per kWh, that is the energy charge only. After TDU delivery charges, taxes, and fees, your real cost is closer to 14-16 cents per kWh.

This is not the provider’s fault, exactly. They can only control the energy portion of your bill. TDU charges are set by regulators and vary by service area, so a provider cannot give a single all-in rate that works for every address in Texas.

The Electricity Facts Label fixes this problem. The EFL shows your total average cost per kWh at 500, 1,000, and 2,000 kWh levels, and those numbers include TDU delivery charges. Always compare plans using the EFL, not the advertised energy rate alone.

Delivery Charges Are Going Up

Over the past several years, TDU delivery charges in Texas have been trending upward. Storm damage repairs, grid hardening investments, and general infrastructure aging all contribute.

This means that even if your energy rate stays flat, your total bill can increase because the delivery portion grew. There is nothing you can do about this individually, but it is worth understanding so that an unexplained bill increase does not send you on a wild goose chase looking for the problem on the energy side.

If you believe your TDU charges are incorrect, contact your retail provider first. They interface with the TDU on your behalf and can investigate discrepancies.