Why Do I Have High Electricity Delivery Charges?

In this blog, we'll explain a major factor in your Texas electricity bill: TDSP charges. What are these delivery charges? Why do they have so many different names? Why they can add up to half of your monthly bill, and why you might see high electricity delivery charges on your bill? We know a common question is, “why is my electric bill so high?” Energy Ogre is your consumer advocate and is here to get you answers.

In this article:

What are TDSP or TDU Electric Delivery Charges?

While you have the power to choose your Texas electricity plan, Transmission Distribution Service Provider (TDSP) charges are mandatory. What are TDU electric delivery charges? Well, TDSP or delivery company charges are the fees associated with servicing and delivering electricity to your meter from the generation source.

The delivery company, sometimes called your Transmission and Distribution Utility (TDU), is the utility company that manages the energy grid in your area of the state.

What Is A Transmission and Distribution Service Provider?

What is a TDSP?

TDSP stands for Transmission and Distribution Service Provider. TDSPs are utility companies that own and operate electric grids in your area. The TDSP is responsible for maintaining lines, poles, and meters that deliver electricity to your home. You should call your TDSP to report things such as power outages or fallen lines. TDU (Transmission and Distribution Utility) is another commonly used name.

Texas Electricity Delivery Providers

Oncor Electric Delivery Charges

Oncor is the largest TDSP in Texas serving over 10 million customers around the Dallas-Fort Worth area. Interested in more information about Oncor? Check out their website here.

CenterPoint Electric Delivery Charges

CenterPoint operates in the Houston area and serves more than 2 million customers. Interested in more information about CenterPoint? Check out their website here.

Texas New Mexico Power (TNMP) Electric Delivery Charges

Texas New Mexico Power serves far west Texas with over 260,000 customers. Check out TNMP's website here.

American Electric Power (AEP) Delivery Charges

AEP Texas Central & AEP Texas North

AEP Texas Central serves most of south Texas and AEP Texas North serves a little bit of central and west Texas. Check out there website here.

As you can already tell, these charges are often referred to by other names such as:

  • TDSP charges

  • TDU chargers

  • Pass-through charges

  • Poles and wires charges

When it comes to electric transmission in Texas, TDSP companies such as CenterPoint, Texas New-Mexico Power, Oncor, and others are the owners, operators, and maintainers of the power lines and meters. Transmission and distribution utility companies are also responsible for maintaining the poles, wires, meters, and other transmission equipment relating to the distribution of energy from the power plant to the final delivery point.

Fees are based on your meter's "peak demand," which is the maximum electricity that you use at a given point in time. Although there are fixed costs and other components associated with your TDSP charges, higher demands are generally the primary cause of high electricity delivery charges.

Here’s a helpful tip you can set as a reminder in your phone. Twice a year, you’ll likely notice a difference in your bill when it comes to TDSP charges. Twice a year, the Public Utilities Commission of Texas (PUCT) can make changes to these delivery charges. They are reflected in March and September. These seasonal changes normally end up being an increase in the charges in September, and then having them lower in March.


What Texas Electricity Distribution Utility Serves My Address?

Texas Electric Utility Map
Want A Better Electricity Plan?
Why are my TDU or TDSP Delivery Charges So High?

It's important to understand, the TDSP charges are tariff-based and approved by the Public Utilities Commission of Texas (PUCT). These charges include the cost of delivering electricity to your service address, reading your meter, and handling line outages and emergencies.

Energy Providers are billed after the TDSP Delivery Charges are assessed on a monthly basis. Because these charges are tariff-based, they apply to all customers based upon classification, and they are not bypassable. Also, it is important to remember that the TDSP charges for you and your home are going to be the same amount regardless of who you have as your Retail Electric Provider (REP).

You will notice certain delivery charges are billed on a monthly basis, and some are billed on a usage basis (per kilowatt-hour). For this reason, the total electricity delivery charges amount will vary each month depending on your monthly kilowatt-hour usage. Of course, the more electricity you use, the higher your bill will be. Therefore, if you see high electricity delivery charges, this is why.

Difference Between TDSP Charges and Energy Charges

Difference Between TDSP Charges & Energy Charges

For TDSP electric delivery charges, these come from your local utility. There will be a fixed charge that is paid on a monthly basis. There’s also a variable charge that appears in cents & it is multiplied by the usage (kWh). The more electricity you use, the higher this part of the bill will be. Energy charges come from your Retail Electric Provider (REP). This charge is based on the contract rate agreed to by the customer. It appears in cents and it is multiplied by the usage (kWh). If you're out of contract, a variable month-to-month energy rate will be charged (usually higher than the contracted rate and can fluctuate each month). It is also multiplied with the usage (kWh). Some contracts also add a monthly base fee

Every electricity company can choose how they show these fees on a bill, which can be confusing. With your past electric providers, they may have lumped the fees together with your energy charge. The energy charge is the cost to produce your electricity and comes from your REP. You can always find all charges on the electricity facts label (EFL) of your current plan. Every plan offered by an electricity provider will include these charges.


My Demand Charges are What?!?

Have you seen a sudden hike in your TDSP charges? Here are some potential reasons for high electricity delivery charges:

1) Is your current meter faulty, or did you get a new smart meter? If you had an analog meter, there is a chance it was not accurately reading your demand and consumption. The new smart meters are equipped to more accurately read your demand and consumption.

2) The delivery company charges can be proportionately larger if you use less energy. Because there are fixed components, they are associated with the cost to deliver your electricity. It can cost more to deliver your electricity. It can also be more to serve your meter than to pay for the actual electricity itself.

3) Is your retail electricity provider marking up your TDSP charges?

Sign Up

How To Reduce TDU and TDSP Delivery Charges

Here are some options to ensure that you are not being charged too much on delivery company charges. These tips should keep your high electricity delivery charges at a minimum.

1) Have an Energy Ogre member care representative assist you in requesting that your TSDP check for a faulty meter.

2) Energy Ogre can analyze your bill. We will make sure all fees are correct. We make sure the provider didn't mark up the cost of delivery company charges that weren't accounted for in your bill analysis. Note, it is completely legal for retail electric providers to mark up these charges; however, they must disclose this markup in the EFL.

Not an Energy Ogre member yet? Want the best electricity rates in Texas? Check out how to use our free electricity savings calculator below and learn more about our service here.

Learn What an Early Termination Fee Is

Other articles: