Texans Should Not Fear Recent Delivery Charge Increases

Key Things to Know

  • Delivery charges are always part of your electricity bill
  • Delivery charges are mandatory, and all Texans pay them (“all in” or “bundled” plan customers may not be subject to delivery changes since their bills have only one line item, but it depends on the way their plan is outlined in the electricity facts label)
  • Neither Energy Ogre nor your retail electricity provider, has any control over delivery charges
  • Delivery charges change throughout the year, but customers will see the changes take effect on March 1 and September 1 

Despite the Public Utility Commission of Texas (PUCT) approval of a statewide delivery charge increase, Texans should not fear their electricity bills will soon spike. Delivery charges change throughout the year, and this practice is common in the industry.

This delivery charge increase, effective September 1, 2021, will be observed by each of Texas’s five Transmission and Distribution Service Providers (TDSP). Centerpoint and Oncor customers experienced the highest price increases of the five.

In short, the increase in delivery fees raises the cost of electricity, which also raises your effective rate. Your effective rate is the amount you pay for electricity, measured per kWh, after fees and taxes are considered.

Though consumers may now have a higher effective rate as we head into the cooler months, their bills should ultimately decrease as long as their electricity usage decreases. In summary, one aspect of your bill will be a bit higher, but your bill overall should be less than it was during the summer months.

In this video below, Energy Ogre CEO Jesson Bradshaw explains why delivery charges can seem high, why increased charges can sometimes be a good thing, and he addresses why they may increase throughout the year.

What is a Delivery Charge?

Delivery charges are the fees associated with servicing and delivering electricity to your meter. The delivery company in your area manages the electricity infrastructure, ensuring it gets to our homes and businesses.

Delivery charges change multiple times throughout the year. Most notably, however, they change seasonally. 

On March 1, they typically decrease (sometimes nominally). On September 1, the delivery charges typically increase. All retail electricity providers (REP) must collect these charges from their customer base, so all REPs within your area will assess the same delivery charges. 

Here are the five delivery companies in Texas: Oncor, CenterPoint, AEP Central, AEP North and Texas-New Mexico Power Company (TNMP). Please note delivery charges are unavoidable, and they typically make up 30-50% of your monthly electric bill depending on your electricity rate. 

As we mentioned earlier, “all in” or bundled plan customers pay only one price that packages the energy charge, the delivery charge, taxes, and all other costs. However, these types of plans are not as common. 

New Delivery Charges Effective 9/1/2021

There are two components to delivery charges: a fixed monthly charge, and a variable rate charge that is assessed per kWh. REPs can either combine or separate the two fees on customer bills. From season to season, both the fixed and variable charges may increase or decrease.

We considered comparing the new delivery charge rates versus the former rates for reference. However, doing so can create an unrealistic fear that your next few bills will be exorbitantly expensive. 

So instead, we’ve chosen to give you the charges plainly above. Although if you keep reading below, you’ll see that we did the math for you, giving you a more digestible explanation of how the increases may affect the delivery charge portion of your bill for the next six months.

You have enough things to worry about, but we assure you this recent price increase is not one of them. 

The Delivery Charges Will Increase by This Much

Customers in each of the five TDSP areas can expect the delivery charges of their next six bills (October ‘21-February ‘22) to increase. Please keep in mind, these price increases are shown at 500 kWh, 1000 kWh, and 2,000 kWh intervals.

So if you typically use around the same amount of kWh, compare that amount to the chart below. Again, this portion of the bill will increase, but most Texans will pay less overall because their usage will decrease in the cooler months.

As we mentioned earlier, there is nothing consumers can do to lower their delivery charges. They are a necessary expense to ensure our electricity system operates correctly. 

Regardless of the increase, one aspect of your bill will be a bit higher, but your bill overall should be less than it was during the summer months.

All Things Considered, Don’t Stress Over Recent Increase

At the end of the day, a higher delivery charge may increase your effective rate a bit. And sure, no one wants to pay too much for anything, especially electricity. 

However, the latest delivery charge increase is a sign that investments have recently been made to strengthen our electricity infrastructure. And Energy Ogre members have nothing to worry about considering they’re already in the cheapest possible plan. 

If you haven’t signed up with us yet, now’s the time. We’ll be your go-to for all things electricity, and we’ll be happy to answer any questions you may have about the market, your particular plan, or any other topic. 

Moving forward, you’ll never have to worry about your plan or bill because our team of experts will be managing your account closely. Click here for more information. Once you click the link, check the banner atop your screen to see the special promo code we’re offering you.

Other articles you may enjoy: