Texas TDU Delivery Charges: How They Change Real Rates
When Texans compare electricity plans, the offer that looks cheapest on a billboard is not always the one that leaves the most money in the checking account. A big reason is a line few people shop for and almost nobody can switch: the transmission and distribution utility, or TDU, delivery charge. That fee pays for poles, wires, meters, and the crews that restore power after storms. It travels with your address, not with your retail brand.
Delivery is not a Texas quirk. Across the United States, the grid that moves power from plants to meters has to be built, financed, maintained, and operated, and those costs show up in what households pay. The ¹ notes that electricity prices generally reflect the cost to build and run power plants and the transmission and distribution grid, and that some states fully regulate retail prices while others unbundle generation from regulated wires. Texas’s competitive areas make that split unusually visible on residential bills.
If you are switching, renewing, or starting service, understanding delivery charges is how you turn an advertised cents-per-kilowatt-hour into a realistic monthly number. The energy price is what you choose. The delivery price is what your location assigns. Confusing the two is how a “cheap” plan quietly stops being cheap.
Two Companies Share Your Bill
In most of the ERCOT region where retail choice applies, your relationship to the power system splits cleanly. A retail electric provider, or REP, sells you the electrons and sets the supply terms. A separate wires company, the TDU, owns the local delivery system and moves that power to your meter.
The official shopping site for the Public Utility Commission of Texas (²) puts it simply for shoppers: the site exists so you can compare offers from certified providers and pick a plan. What does not change when you switch, according to the ³, is the wires company. Transmission and distribution utilities continue to deliver electricity, read meters, respond to interruptions, and maintain poles and wires no matter which REP you pick.
The ⁴ names the investor-owned TDUs inside ERCOT as CenterPoint Energy, Oncor, TNMP, and AEP Texas. Those companies charge delivery rates to REPs, which then pass the charges through on your bill. The Commission sets those delivery rates; it does not set the final retail electricity price REPs charge customers.
⁵, the independent system operator for most of Texas, schedules power on a grid linking more than 55,000 miles of transmission lines and more than 1,460 generation units, and it administers retail switching for nearly 8 million premises in competitive choice areas. In practice, that means your switch confirmation may come through ERCOT’s processes, your outage call goes to the TDU, and your rate shopping happens among REPs.
Oncor’s own site steers new service customers toward Power to Choose and keeps meter, outage, and construction work on the utility side, which matches how the market is designed: retail brands compete; the wire stays put (⁶).
What “Delivery Charge” Actually Contains
The Commission’s consumer fact sheet on bill charges defines TDU delivery charges as the charge to cover moving electricity from the generation plant to your home. It also explains that REPs may either bundle all charges into a price per kilowatt-hour or separate them, including TDU delivery charges and transmission and distribution surcharges that can combine multiple TDU tariff riders (⁷).
That same guide lists other regulated pieces that often ride along with delivery: meter charges when listed separately, advanced metering recovery, energy efficiency cost recovery, transition or securitization-related charges, and nuclear decommissioning fees assessed through the wires company where applicable. You do not need to memorize every acronym. You do need to know that “delivery” is usually a package of fixed and volumetric pieces approved for your TDU, not a tip jar for your REP.
CenterPoint Energy’s residential bill transparency materials for Houston Electric make the package concrete. Delivery may appear on a REP bill as a TDSP charge, a TDU charge, or a CenterPoint “Delivery Charge,” depending on how the retailer labels it. Fixed pieces include a base meter charge and a base customer charge—listed by CenterPoint as $2.79 per meter and $2.11 per customer monthly as of August 2025—plus volumetric factors approved by the Commission. Those volumetric lines can include transmission and distribution cost recovery factors, energy efficiency recovery, nuclear decommissioning collections, base distribution, and temporary emergency facility charges, with transmission cost recovery adjusted in March and September (⁸).
The Commission’s consumer page on understanding bills underscores the regulatory split: the PUCT regulates TDU rates in competitive areas to cover moving electricity from where it is generated to the home, and it does not set the final price charged by retail electric providers (⁹). When your total bill jumps, usage, weather, fuel and market conditions affecting the retail side, utility delivery rate changes, a contract rollover, or a switch can all be part of the story.
Why Your Neighbor Across Town Pays a Different Delivery Rate
Delivery rates are territory-specific monopolies, not statewide staples. The Commission publishes residential TDU delivery summaries that utilities update monthly. As of July 1, 2026, the residential summary shows customer charges, metering charges, and volumetric charges that produce different average monthly delivery bills at standard usage levels (¹⁰).
At 1,000 kilowatt-hours in a month, those published average residential delivery bills were about $56.36 for CenterPoint, $65.26 for Oncor, $61.31 for AEP Central, $59.72 for AEP North, and $72.52 for TNMP. At 2,000 kilowatt-hours the gap widens: roughly $107.82 for CenterPoint versus $137.18 for TNMP on the same Commission table. That is not a judgment about which retailer you picked. It is geography plus approved tariffs.
Volumetric delivery rates on that July 2026 summary ranged from about 5.1461 cents per kilowatt-hour for CenterPoint to about 6.4665 cents for TNMP, with separate fixed customer and metering charges layered on top. Fixed charges matter most when you use little electricity; per-kilowatt-hour delivery charges dominate when summers push the air conditioner hard.
Households cannot apply for a different TDU the way they apply for a different REP. The address assigns the wires company. Shopping across plans only reshuffles the retail layer sitting on that common delivery foundation.
How Delivery Rewrites the “Real” Rate
Advertised energy rates tempt people to compare cents per kilowatt-hour as if that number were the whole bill. Delivery breaks that habit.
Suppose two Houston-area households both use 1,000 kilowatt-hours on CenterPoint’s wires, so both face the same published delivery average near $56 for that month. Household A’s REP energy charge totals $70. Household B’s energy charge totals $95. Delivery is identical; all-in spend before tax is about $126 versus $151. Expressed as an all-in average, that is roughly 12.6 cents versus 15.1 cents per kilowatt-hour. The headline energy rates alone hid how large a share delivery already claimed.
Flip the scenario to a TNMP territory customer at the same 1,000 kilowatt-hours, where the Commission’s average residential delivery bill is about $72.52. Even with the same $70 energy charge, the all-in total climbs near $142.50 before tax—closer to 14.3 cents per kilowatt-hour. Same retail energy price, different zip code, different “real rate.”
That math is why low-usage and high-usage households experience plans differently. Fixed delivery pieces are a larger share of a 500 kilowatt-hour bill than of a 2,000 kilowatt-hour bill. On the Commission’s July 2026 table, CenterPoint’s average residential delivery bill was about $30.63 at 500 kilowatt-hours and $107.82 at 2,000. If a plan also adds a retail base charge or a minimum-usage fee, the squeeze on light users gets tighter still. The ³ warns that many plans charge a minimum usage fee if you stay under a threshold such as 500 or 1,000 kilowatt-hours, and that the Electricity Facts Label is where those terms show up.
Delivery also changes how much usage reduction saves. Cut 100 kilowatt-hours and you avoid both the retail energy rate and the volumetric delivery rate. You do not avoid the fixed customer and meter pieces. Efficiency and weatherization still win; they just win on the variable slice.
The Electricity Facts Label Is Where Delivery Meets Marketing
Texas requires a standardized Electricity Facts Label, or EFL, so shoppers can compare plans on common terms. The ¹¹ describes the EFL as the fact sheet with contract terms, pricing, fees, and renewable content, required so customers can make an apples-to-apples comparison.
Two label details matter most for delivery math. First, average prices shown at 500, 1,000, and 2,000 kilowatt-hours are designed to incorporate the plan’s pricing structure at those loads. If delivery is passed through, those averages should reflect the delivery environment the plan quotes for your TDU. Second, fixed-rate plans are not a promise that every line on the bill is frozen. The glossary’s fixed-rate entry states that the price per kilowatt-hour will not change during the contract period except for changes in transmission and distribution fees, certain ERCOT or Texas Regional Entity administrative fees, or changes from laws that impose fees beyond the REP’s control.
That exception is the quiet asterisk behind many “locked” rates. Your REP energy price may hold; TDU fees can still move when regulators approve new tariffs or interim factors. If a salesperson pitches a fixed plan as a total bill freeze, the EFL language and the Commission’s delivery tables are the reality check.
Power to Choose also reminds shoppers that not every Texas address has retail choice. Municipal utilities and cooperatives may not be in the competitive market (³). In those areas the bill may not separate the same way, which is a feature of structure, not a loophole you can browse away on the state shopping site.
Bill Formats, Small Businesses, and Calendar Drift
Bill formats amplify confusion even when the tariffs are fair. One REP may print a single “TDU/TDSP delivery” total. Another may itemize riders that echo CenterPoint’s transparency categories—transmission recovery, distribution recovery, energy efficiency, and the rest—while a third may fold delivery into a bundled cents-per-kilowatt-hour and show almost nothing wires-related until you read the EFL. The Commission’s Utili-Facts sheet anticipated that variety when it said retailers may bundle or separate charges (⁷). Your defense is boring and effective: download the label, keep last summer’s usage handy, and reconcile the delivery dollars to the published territory averages instead of arguing with a marketing screenshot.
Small-business owners face the same TDU assignment rule with an extra twist: commercial tariffs and demand charges can replace the simple residential volumetric-plus-fixed pattern once peak demand crosses utility thresholds. The Commission’s charge glossary still applies in spirit—energy versus delivery, REP versus TDU—but the dollars concentrate on when you use power, not only how many kilowatt-hours appear on the bill. If you are opening a shop or office in a competitive area, ask the REP to show the EFL or commercial disclosure with delivery assumptions for your TDU and anticipated demand, and keep the wires company’s construction and meter rules on your buildout checklist before you unlock the doors.
Delivery charges are regulated, not static. The ⁴ explains that the Commission sets TDU rates to allow recovery of delivery costs plus an opportunity for a reasonable return, that TDUs must notify customers when they request a rate change, and that affected customers can participate. Full rate cases are one path. Interim adjustments are another.
CenterPoint’s transparency materials describe a Transmission Cost Recovery Factor adjusted twice a year in March and September, and a Distribution Cost Recovery Factor used to recover capital investment costs between comprehensive rate cases (⁸). Those timelines matter for bill forensics. A September jump that coincides with similar weather and unchanged retail pricing is often a delivery recalibration, not proof your REP rewrote your contract overnight.
When you dig into month-to-month changes, compare three things: kilowatt-hours used, retail plan terms (including whether you rolled to a variable product after a contract expired), and published TDU tariffs for your utility. The Commission’s understanding-bill page lists exactly those classes of causes before pointing consumers to current approved delivery charges (⁹).
What You Can Still Control When Delivery Won’t Budge
You cannot shop the TDU. You can still change the bill.
Shop on the full average price at your real usage, not on a teaser energy-only number. Use ² for official listings, then open the EFL for every finalist. Match the label’s 500 / 1,000 / 2,000 kilowatt-hour columns to your recent bills. If you routinely use 1,400 kilowatt-hours in summer and 700 in winter, stress-test both seasons rather than worshiping the 1,000 kilowatt-hour column alone.
Watch for bill-credit and minimum-usage designs. Credits that unlock only inside a narrow usage band can make low-delivery months look fantastic and shoulder seasons expensive. The FAQ’s warning on minimum usage fees is there for a reason (³).
Track contract end dates. The Commission notes that if a contract expires and you do not renew or switch, you may move to a month-to-month variable plan with the current provider (⁹). Delivery will still pass through; the retail layer can suddenly become the problem.
Cut usage where volumetric charges stack. Because delivery includes per-kilowatt-hour pieces, a kilowatt-hour not used is a kilowatt-hour that does not incur retail energy or volumetric delivery. Fixed delivery fees remain, so deep cuts help more than they would in a pure flat-fee world, but they do not zero the wires portion.
For outages and meter problems, call the TDU. For bill disputes about the retail plan, start with the REP, then the Commission’s consumer channels if needed. Mixing those contacts wastes days.
How This Looks Outside Competitive Texas—and in Other Choice States
Not every Texan has a REP. The Commission states that if your electric provider is a municipally owned utility or a cooperative, the PUCT does not oversee that utility’s rates the same way, and the competitive-market charge explanations may not apply (⁹). Outside ERCOT’s competitive footprint, investor-owned utilities such as Entergy Texas, SWEPCO, SPS, and El Paso Electric remain rate-regulated for the customer-facing package (⁴).
Municipal utilities illustrate the bundled alternative. ¹² in San Antonio describes itself as the nation’s largest municipally owned energy utility, serving electric and gas customers with a community-owned model rather than a separate retail-shopping layer. Delivery physics did not disappear; the invoice simply may not advertise it as a TDU pass-through.
Nationally, average residential prices give context, not a shopping mandate. For 2024, EIA’s state average retail price table shows Texas residential electricity at 14.94 cents per kilowatt-hour, Ohio at 15.99, Maryland at 17.86, and a U.S. total residential average of 16.48 cents (¹³). More recent monthly EIA figures put Texas residential electricity at 16.99 cents per kilowatt-hour in April 2026 (¹⁴). Those averages blend supply, delivery, and other costs across market designs. They are useful for “are we high or low this year?” questions, not for deciding between two Houston REPs.
In choice states outside Texas, the vocabulary shifts—supplier versus utility, generation versus distribution—but the shopping lesson rhymes with EIA’s description of unbundled markets: generation prices may be competitive while transmission and distribution remain regulated (¹). Ignore the wires portion and you misunderstand the bargain. EIA also notes that retail prices are usually highest for residential and commercial customers because distributing electricity to them costs more than serving large industrial loads—another reason delivery matters personally even when wholesale prices grab headlines.
Put Delivery Charges to Work Before You Sign
Before you enroll, renew, or move service:
- Identify your TDU from your bill or zip-code lookup on Power to Choose, then open the current ¹⁰ so you know the floor you will pay for wires.
- Compare EFLs at the usage you actually burn, including summer peaks.
- Read the fixed-rate exceptions for transmission and distribution fee changes on any “locked” offer (¹¹).
- Separate outage contacts (TDU) from plan and billing contacts (REP).
- If a bill spikes, check usage first, then retail contract status, then whether delivery tariffs moved—exactly the order the Commission’s consumer guidance suggests (⁹).
TDU delivery charges will not make you love them. They will keep showing up, labeled differently by different retailers, adjusted on regulatory calendars you do not control. The advantage goes to households that stop treating the banner rate as the whole story. Real rates include the wire. Once you price that in, shopping gets less theatrical—and a lot more accurate.