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 they? 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 Charges?

While you have the power to choose your Texas electricity plan, Transmission Distribution Service Provider (TDSP) charges are mandatory. 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.

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

  • TDSP charges

  • TDU chargers

  • Poles and wires charges

  • Pass-through charges

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


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.

Texas Electric Utility Map

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 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.

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.


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. 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?


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) 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.

One Last Thing! 

If you're interested in saving money and being prepared for power outages, take a look at this Money Crashers article about choosing the right standby generator. Money Crashers is a leading resource in personal financial empowerment. They provide tips and tools regarding budget making, investments, starting businesses, and much more!

Other articles: