Understanding Your Texas Electric Bill

The Two Parts of Your Bill

Every Texas electric bill has two main components, even if your provider combines them onto one statement.

Energy charges come from your retail electricity provider — the company you chose. This covers the cost of the electricity itself plus whatever margin your provider charges. Your plan’s rate, base charges, and any bill credits all fall here. This is the part you control by choosing your plan.

Delivery charges come from your TDU (Transmission and Distribution Utility) — the company that owns the power lines and meters in your area. These cover the cost of physically delivering electricity to your home. You don’t choose your TDU, and these charges are the same no matter which retail provider you’re with. Think of it like a shipping fee: the product (electricity) has one price, and getting it to your door has another.

Most providers roll both components into a single bill. Some show them as separate line items; others combine everything into one per-kWh rate. Either way, both pieces are always there.

Energy Charges (The Part You Chose)

This is where your choice of plan directly determines what you pay. Energy charges typically include several pieces.

Per-kWh energy rate. This is the core of your plan — the price you pay for each kilowatt-hour of electricity your home uses. On a fixed-rate plan, this stays the same for the entire contract. On a variable plan, it can change monthly.

Base charge. Most plans include a flat monthly fee, usually $4.95-$9.95, that you pay regardless of how much electricity your home uses. Some plans advertise “no base charge” but build the cost into a slightly higher per-kWh rate. Neither approach is inherently better — what matters is the total cost at your kWh level.

Bill credits. If your plan includes credits (like $75 off when your home uses over 1,000 kWh), they’ll appear here as a deduction. Check whether you actually received the credit. If your home used 980 kWh and the threshold is 1,000, you won’t get it, and that missing $75 is the most likely reason your bill looks higher than expected.

The energy charge section is where most surprises happen. If your bill is higher than you expected, start here.

Delivery Charges (The Part You Didn’t Choose)

Delivery charges come from your TDU and are regulated by the Public Utility Commission of Texas. They’re not something you can shop around for — everyone in the same TDU territory pays the same delivery rates.

Delivery charges typically break down into:

Metering charge. A flat monthly fee for maintaining your electric meter, usually around $3.42-$5.25 depending on your TDU.

Per-kWh delivery charge. A rate for each kWh delivered to your home, typically 3.5-4 cents per kWh. This adds up. At 1,200 kWh, a 3.8-cent delivery rate means about $45.60 just for delivery.

Transmission charges. Covers the cost of high-voltage transmission lines that move electricity from power plants to your local distribution network.

System benefit fund. A small charge that funds programs like low-income assistance and customer education. It’s usually a fraction of a cent per kWh.

Here’s what catches people off guard: when you see a plan advertised at 8 cents/kWh, delivery charges are already included in that number (the EFL requires it). But when you look at the breakdown on your actual bill, you might see a 4.5-cent energy charge and a 3.5-cent delivery charge adding up to 8 cents. The total is consistent — it just looks different when itemized.

Why Your Bill Is Higher Than Expected

Almost every Texas electricity customer has had that moment: you open your bill and the number is way higher than you thought it would be. Here are the most common reasons, in order of how often they happen.

1. Summer AC is running hard. This is the single biggest factor in Texas electricity bills. A home that uses 900 kWh in April might use 2,000+ kWh in August. Air conditioning can account for 60-70% of your total electricity consumption during peak summer. If your July bill is double your March bill, it’s probably not your plan — it’s the heat.

2. You missed a bill credit threshold. If your plan includes a credit at 1,000 kWh and your home used 985 kWh, that missing credit can swing your bill by $50-75. Check the credit terms on your EFL and compare against your actual kWh for the month.

3. Your contract ended and you’re on auto-renewal. This is sneaky and expensive. When a fixed-rate contract expires, most providers automatically move you to a month-to-month variable rate that’s 30-50% higher. If your rate suddenly jumped and you didn’t change anything, this is probably what happened.

4. You’re comparing the wrong numbers. If you signed up based on the 2,000 kWh advertised rate but your home uses 1,000 kWh, your effective rate is significantly higher. This isn’t a billing error — it’s a plan mismatch. Check your EFL at the 1,000 kWh benchmark.

5. Estimated meter read. Occasionally, your TDU estimates your meter reading instead of actually reading it. If the estimate is wrong, you’ll see an adjustment on a future bill. If a bill looks unusually high or low without an obvious reason, check whether the meter read was actual or estimated — it’s noted on your bill.

What to Do About It

If your bill doesn’t look right, here’s how to diagnose and fix it.

Step 1: Check your rate. Log into your provider’s account or look at your bill breakdown. Is the per-kWh energy rate what your EFL says it should be? If it’s higher, your contract may have expired and you’ve been rolled onto a variable rate.

Step 2: Check your kWh. Look at how much electricity your home used this month compared to previous months. A big jump in kWh means your home consumed more electricity — the plan is working as designed, the AC just ran harder. Compare against the same month last year if you can.

Step 3: Check your credits. If your plan includes bill credits, verify that they were applied. Look at the line items on your bill. If you didn’t hit the threshold, that’s the gap. Consider whether your plan is actually a good fit for how much electricity your home uses, or whether a plan without credits would give you a more predictable bill.

Step 4: Compare alternatives. Whether or not there’s an error, a high bill is a good reason to check what else is available. Enter your ZIP code on ChooseMyPower.org, set it to your actual monthly kWh, and see if there’s a plan that costs less. If your contract has ended, switching takes 5 minutes and there’s no fee.

If you believe there’s an actual billing error — a rate that doesn’t match your contract, a charge you can’t explain, or a meter read that seems wildly off — contact your retail provider first. They can review the bill, check the meter reading, and correct any mistakes. If your provider can’t resolve the issue, you can file a complaint with the Public Utility Commission of Texas (PUCT) online or by calling 1-888-782-8477. You can also request a meter test through your TDU if you believe the meter itself is reading incorrectly.