TDU delivery charges are not negotiable, not competitive, and not going away — which makes them the single most important fixed cost to understand before you compare retail electricity plans in Texas.
Retail electricity competition in Texas only applies to the generation and supply side of your bill. The wires, poles, transformers, and meters that physically move electricity to your home are owned and operated by a Transmission and Distribution Utility (TDU). That utility is a regulated monopoly. You do not choose it. The Public Utility Commission of Texas (PUCT) sets what it can charge, and every retail electricity provider (REP) that serves your address passes those charges through to your bill, dollar for dollar.
Because TDU charges are pass-through costs, a plan advertised at 11.2 cents per kWh from Provider A and 11.5 cents per kWh from Provider B are not directly comparable unless you account for how each provider presents TDU charges. Some bundle them into the energy rate. Some list them separately. Some do neither transparently. This article explains the structure of TDU delivery charges, profiles the two largest TDUs in Texas, shows how to find which TDU serves your address, and explains what to look for when reading an Electricity Facts Label.
What TDU Delivery Charges Actually Cover
The PUCT breaks TDU charges into two components: a fixed customer charge and a variable delivery charge.
The fixed customer charge is a flat monthly fee, typically in the range of $3 to $10 per month depending on the TDU, that covers the cost of maintaining your meter, your service connection, and the administrative infrastructure required to keep your account active. This charge appears on your bill whether you used one kilowatt-hour or one thousand.
The variable delivery charge is assessed per kilowatt-hour (kWh) consumed. It covers the cost of moving electricity across high-voltage transmission lines and through lower-voltage distribution lines to your home. This rate varies by TDU and is expressed in cents per kWh. At typical Texas residential usage (around 1,100 kWh per month in moderate weather, rising to 1,500 to 2,000 kWh in peak summer months), the variable component is the larger of the two charges.
Some TDUs also apply a transmission cost recovery factor (TCRF) and a distribution cost recovery factor (DCRF) as separate line items. These are interim rate adjustments the PUCT approves between full rate cases, allowing TDUs to recover infrastructure investment costs without waiting years for a complete rate proceeding. They are still TDU charges, still regulated, and still passed through by your REP.
Oncor Electric Delivery: The Largest TDU in Texas
Oncor Electric Delivery serves approximately 10 million customers across a 13-county service area in North and West Texas. That footprint includes Dallas, Fort Worth, Waco, Wichita Falls, and most of the Metroplex suburbs. If your address falls within this zone, Oncor is your TDU regardless of which REP you choose.
Oncor’s current tariff rates (as filed with and approved by the PUCT) include a residential customer charge of $3.42 per month and a distribution delivery charge of approximately 3.8 cents per kWh. These figures reflect the most recently published rate schedule. PUCT only publishes tariff updates on an irregular basis tied to rate cases and interim filings, so readers should verify current figures at puc.texas.gov before using them in a cost comparison.
At 1,100 kWh of monthly usage, the Oncor delivery charge works out to roughly $45.22 ($3.42 fixed plus $41.80 variable). At 1,500 kWh, it rises to approximately $60.42. These numbers appear on your bill as line items distinct from the energy charge your REP applies.
Oncor filed its most recent base rate case in 2021. The PUCT approved interim DCRF adjustments in subsequent years that have incrementally increased the variable rate. Rate cases of this scale typically take 12 to 18 months to resolve and result in rates that are then locked in until the next filing. Oncor’s scale means it has more political and regulatory weight than smaller TDUs, which generally results in well-documented rate proceedings with extensive public record.
CenterPoint Energy: Houston and the Gulf Coast
CenterPoint Energy (referred to in rate filings and on bills as “CenterPoint Energy Houston”) serves roughly 2.6 million electric customers in the Houston metropolitan area, including Harris County and surrounding counties. CenterPoint also operates a natural gas distribution network, which is a separate regulated entity. This article addresses only the electric delivery side.
CenterPoint’s residential delivery charge structure under current PUCT-approved tariffs includes a monthly customer charge of approximately $4.39 and a variable delivery rate in the range of 4.0 to 4.3 cents per kWh, depending on which cost recovery factors apply to the billing month. The variation matters: CenterPoint has historically filed more frequent TCRF and DCRF adjustments than Oncor, which means the effective per-kWh rate on your bill can shift quarterly.
At 1,100 kWh, CenterPoint delivery charges run approximately $48 to $51. At 1,500 kWh, the range is roughly $64 to $69. These are structurally higher than Oncor on a per-kWh basis at equivalent usage, which is a relevant data point when comparing headline rates from REPs in each service territory. A plan priced at 12 cents per kWh total (energy plus TDU) in Dallas is not the same cost profile as a plan priced at 12 cents per kWh total in Houston, even if the REP is identical.
CenterPoint’s storm hardening investments following Winter Storm Uri and Hurricane Harvey have driven upward rate pressure. The PUCT approved rate increases reflecting grid resilience spending, and those costs are reflected in the current tariff. Customers in the CenterPoint territory should expect continued incremental rate adjustments through the mid-2020s as multi-year infrastructure programs complete.
Other TDUs Operating in the ERCOT Market
Oncor and CenterPoint serve the majority of deregulated Texas customers, but three other TDUs operate within the ERCOT footprint:
AEP Texas serves roughly 1.1 million customers in West Texas, South Texas, and the Coastal Bend region, including Corpus Christi and Laredo. AEP Texas operates two rate zones (Central and North) with slightly different tariff structures.
Texas-New Mexico Power (TNMP) serves about 245,000 customers in scattered service territories that include parts of the Panhandle, Southeast Texas, and areas near Houston that fall outside CenterPoint’s footprint.
Lubbock Power and Light serves Lubbock and joined the ERCOT market in 2021. Its residential delivery charges are set under separate municipal utility rate proceedings.
For customers in these territories, the same pass-through logic applies. The TDU charge is fixed by the regulator, passed through by the REP, and identical across all competing providers.
How to Find Out What TDU Services Your Address
The most common version of this question is: “What power company services my address?” The answer has two parts. There is the TDU (the wires company, which you do not choose), and there is the REP (the retail supplier, which you do choose and can switch).
To identify your TDU, use the PUCT’s Power to Choose website (powertochoose.org) or enter your zip code directly on any REP’s enrollment page. The enrollment system queries the Electric Reliability Council of Texas (ERCOT) database, which maps every service address to its TDU. The TDU designation for a given address does not change unless a service territory boundary is redrawn through a formal regulatory proceeding, which is rare.
If your billing address is in an area not served by a competitive REP (some municipalities and electric cooperatives remain vertically integrated), ERCOT’s system will return no results for retail enrollment. That means you are in a non-deregulated area and your utility functions as both TDU and supplier.
Reading TDU Charges on an Electricity Facts Label
The Electricity Facts Label (EFL) is the standardized disclosure document every Texas REP must file with the PUCT for each plan it sells. It is the correct starting point for any rate comparison. TDU charges appear in the EFL as part of the price-per-kWh calculations shown at 500 kWh, 1,000 kWh, and 2,000 kWh usage levels.
The PUCT requires EFLs to include TDU pass-through charges in the average price calculation. A plan with a low base energy rate but high per-kWh adders (sometimes labeled “TDU pass-through” or “distribution charges”) will still show the correct all-in average on the EFL.
Here is what to check: compare the EFL price at 1,000 kWh for two plans from different REPs serving the same TDU territory. If both EFLs use the same TDU tariff inputs (they should, because the tariff is the same for everyone), the price difference between plans reflects only the REP’s energy margin and any fixed fees the REP adds. If the prices differ more than expected, read the fine print for bill credits that only apply at specific usage thresholds, or administrative fees not captured in the per-kWh average.
For example: in the Oncor service territory, two plans priced at 10.8 cents and 11.4 cents per kWh at 1,000 kWh will both include approximately 3.8 cents of TDU delivery charges embedded in those figures. The REP margin difference is 0.6 cents per kWh, or about $6.60 per month at 1,100 kWh. That gap is material over a 12-month term ($79.20), but it is much smaller than the gross rate difference implies.
Why TDU Rates Change and What to Watch For
TDU rates change through two mechanisms: base rate cases and interim cost recovery filings.
Base rate cases are full proceedings before the PUCT that can take 12 to 18 months. They reset the core tariff. Interim filings (DCRF, TCRF, and similar mechanisms) allow faster recovery of specific capital expenditures between rate cases. These can affect your bill quarterly without triggering a full rate case.
The practical implication: a 12-month fixed-rate REP plan does not insulate you from TDU charge increases. If CenterPoint files a DCRF adjustment mid-contract, your bill will increase by that amount even though your REP’s energy rate is fixed. This is disclosed in the Terms of Service for every REP operating in Texas. Customers comparing plans should treat TDU charges as a variable floor that trends upward over time, not a locked number.
LightCompanies tracks PUCT rate case filings for each major TDU. Related coverage in this cluster addresses how TDU charges have moved over the past five years, how to read a DCRF notice when it appears on your bill, and how to calculate the true cost of a fixed-rate plan after accounting for pass-through variability.
Can You Avoid TDU Charges?
No. TDU charges are identical no matter which retail provider you pick, because the TDU is a regulated monopoly assigned to your address. Switch from TXU to Rhythm to Gexa and your Oncor delivery charge doesn’t move a cent.
Watch out for plans advertised as “free delivery” or “no TDU charges.” Nobody waives these charges — they bake them into a higher energy rate, the same way a store offering “free shipping” prices it into the product. Always compare the all-in price at your actual usage, not the headline rate.
Frequently Asked Questions
What is a TDU charge on my Texas electricity bill?
TDU (Transmission and Distribution Utility) charges pay for the poles, wires, transformers, and meters that deliver electricity to your home. They’re separate from the energy you buy and appear on every Texas bill, no matter which provider you choose.
Can I avoid TDU delivery charges by switching providers?
No. Your TDU — Oncor, CenterPoint, AEP Texas, or TNMP — is set by your address, not your provider. Every retail provider passes the same regulated TDU charge through. When you compare plans, compare the all-in price that includes it, not just the energy rate.
Why are TDU delivery charges higher in some parts of Texas?
Each TDU has different infrastructure, geography, and customer density. TNMP customers pay more than Oncor customers because TNMP’s scattered territory means fewer homes per mile of line. The PUCT reviews and approves those differences.
How much do TDU charges add to my bill?
At about 1,000 kWh a month, TDU charges add roughly $60–80 — around 6–8 cents per kWh on top of your energy rate. That can be 40–50% of the total bill.