Understanding Your Texas Electric Bill: Line-by-Line Guide

Q: Why do I have two companies on my Texas electric bill?

In deregulated Texas, your bill may show charges from two companies : - REP (Retail Electric Provider) — sells you electricity - TDU (like Oncor) — delivers it Some REPs send combined bills; others bill separately from TDU charges.

Q: What are TDU delivery charges on my Texas bill?

TDU charges cover the cost of maintaining power lines, poles, and equipment that deliver electricity to your home. - These regulated charges are the same regardless of which REP you choose - Typically add 3-5¢/kWh to your bill

Q: How can I lower my Texas electricity bill?

- Shop for a competitive rate at your usage level - Switch to a fixed-rate plan before summer - Reduce usage during peak hours - Ensure your advertised rate includes all fees Most effective: Compare plans based on your actual monthly kWh.

Quick Answer

Learn what every charge on your Texas electricity bill means and how to spot overcharges.

How Texas Electric Bills Are Structured

Texas electricity bills have two main components:

Component	Who Sets It	What It Covers
Energy Charges	Your REP (Retail Electric Provider)	Per-kWh rate for electricity used
Delivery Charges	Your TDU (Transmission & Distribution)	Infrastructure that delivers power

Key differences:
- TDU charges are regulated by PUCT and vary by service territory
- REP rates are competitive and negotiable through shopping
- Most bills also include state/local taxes (typically 6-8%)

Understanding Energy Charges

Energy charges represent what you pay your REP for electricity consumed—a per-kWh rate × your monthly usage.

Plan Type	How Rate Works
Fixed-rate	Consistent rate throughout contract
Variable	Fluctuates monthly with market
Tiered	Rate changes at usage thresholds (often 1,000 or 2,000 kWh)

Watch out for:
- "Energy charges" that bundle base rate + hidden fees
- Low advertised rates that exclude fees appearing separately on your bill

The EFL (Electricity Facts Label) breaks down exactly what's included in advertised rates.

TDU Delivery Charges on Your Bill

TDU delivery charges cover infrastructure maintenance, meter reading, and power distribution. These charges are identical regardless of which REP you choose.

TDU	Delivery Rate
Oncor	~3.5¢/kWh
CenterPoint	~4.2¢/kWh
AEP Texas	~4.0¢/kWh

How they appear:
- Separate line items, OR
- Bundled into "all-in" total rate

Pro tip: When comparing plans, always add TDU charges to base rate for accurate cost comparison. TDU charges also include small state-mandated fees for renewable energy and low-income assistance.

Hidden Fees and Taxes to Watch For

Beyond energy and delivery charges, Texas electric bills often include additional fees:

Fee Type	Amount	What It Is
Base/Customer Charge	$5-15/month	Fixed amount regardless of usage
Early Termination Fee	Varies	Penalty for switching before contract ends
REC Costs	Varies	Appears on green plans
State/Local Taxes	6-8%	Added to total bill
System Benefit Fund	Small fee	Supports low-income assistance programs

Always check your EFL for minimum usage fees or bill credits that affect actual cost at different usage levels.

Frequently Asked Questions

Why do I have two companies on my Texas electric bill?

In deregulated Texas, your bill may show charges from two companies: - REP (Retail Electric Provider) — sells you electricity - TDU (like Oncor) — delivers it Some REPs send combined bills; others bill separately from TDU charges.

What are TDU delivery charges on my Texas bill?

TDU charges cover the cost of maintaining power lines, poles, and equipment that deliver electricity to your home. - These regulated charges are the same regardless of which REP you choose - Typically add 3-5¢/kWh to your bill

How can I lower my Texas electricity bill?

- Shop for a competitive rate at your usage level - Switch to a fixed-rate plan before summer - Reduce usage during peak hours - Ensure your advertised rate includes all fees Most effective: Compare plans based on your actual monthly kWh.

Looking for more? Explore all our Energy Efficiency guides for more helpful resources.

About the author

Han Hwang

Consumer Advocate

Han helps consumers in deregulated states understand their electricity options. He breaks down confusing rate structures, explains how to read an EFL, and identifies which plans save money versus those that just look cheap upfront.

Electricity marketplace operationsDigital business strategyRetail electricity marketsConsumer experience optimizationPartnership development