Why Do I Have High Electricity Delivery Charges?


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Some consumers may get a little bill shocked when they see their electricity delivery charges. You'll recognize these charges by different names: transmission charges, transmission Distribution Service Provider (TDSP) charges, poles and wires charges, or pass-through charges. We're here to explain why you may see high electricity delivery charges on your bill.

What are TDSP charges?

TDSP or delivery company charges are the fees associates 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.

TDSP or delivery companies such as CenterPoint, Texas New-Mexico Power, Oncor, and others are the owners, operators, and maintainers of the power lines and meters. Also, they are 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.


How are TDSP charges billed?

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 bypass-able. 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 Electricity Provider (REP).

Certain delivery company charges are billed on a monthly basis, and some are billed on a usage basis (per kilowatt-hour). For this reason, the total Delivery Charges amount will vary each month depending on your monthly kilowatt-hour usage. Therefore, if you see high electricity delivery charges, this is why.

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. 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.


Electricity Demand vs. Consumption

TDSP charges are based primarily on "how" you use your electricity and not exactly "how much" you use. Therefore, you can have two facilities in the same area that consumes the same amount of electricity over a year but can be charged with different TDSP charges.


Why Are My Demand Charges So High?

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. And more to serve your meter than to pay for the actual electricity itself.

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

Energy Ogre CEO Jesson Bradshaw says the high delivery charges can actually be a good thing. It means the Energy Ogre team is doing our job well on your behalf!



How Can I Save Money on TDSP 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.) An Energy Ogre member 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 electricity providers to mark up these charges; however, they must disclose this markup in the EFL.

3.) Build up your electricity usage slowly. Don't turn on all your lights, crank down the air, start the laundry and dishwasher all in a matter of 5 minutes. Wait more than 15 minutes to bring each large component online. Limit the equipment running simultaneously if possible, or at least the level at which they operate. Also, have your HVAC checked regularly.

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