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Retail Electric Providers structure their offers with an array of charges and fees. Here are some common examples:
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Base Charge
REPs may levy a flat monthly charge to cover their administrative costs and/or supplement their energy pricing.
Energy Charges
“Energy charges” generally refer to the costs of generating each kWh you use. The wholesale costs are negotiated between your REP and generators across Texas through a combination of long-term contracts, a Day Ahead Market, and a Real Time Market. The REP then adds margin to cover their profit and expenses, and passes the resulting retail costs to their customers.
TDU Charges
25% to 60% of your electric payment goes to your Transmission and Distribution Utility (TDU), i.e Centerpoint, Oncor, etc. Your TDU maintains the lines from the generators to your house, and they (not your REP) are who you call when the power goes out. Unlike the REPs, TDUs are regulated monopolies. They charge a combination of monthly flat and usage-based “TDU charges”, which your REP passes through to you on your bill. Some bills and EFLs disclose the TDU charges as a separate line item. Others “bundle” them with the Energy charges into a single number, which makes it harder for shoppers to determine and compare the true Energy cost. (Since TDU charges are fixed, the Energy cost is typically the only true competitive differentiator.)
TDU charges change several times a year, but sometimes REPs don’t update older EFLs to reflect the latest TDU rates. If the rates have since risen, that older plan will cost more than what the EFL and PowerToChoose.org results claim. If rates have fallen, an otherwise good plan hindered by old rates may never show up in your top search results.
Where discernable from the EFL, the RateGrinder calculator normalizes all plans to the current TDU charges in effect, so you’re always comparing apple to apples. The RateGrinder ‘TDU_Info’ tab lists all the latest charges and their effective dates.
Other Recurring Charges
The EFL “average price” quotes at 500/1000/2000 kWh generally include only the recurring charges noted above, but other charges may also apply to your regular bill:
- State and local sales taxes
- Miscellaneous gross receipts tax reimbursement
- PUC assessments
The RateGrinder does not currently factor these (relatively minor) charges into the cost calculations.
In addition to the regular charges for your monthly service, your REP charges non-recurring fees for certain circumstances. These fees are described in your plan’s Terms of Service (TOS) and Electricity Facts Label (EFL) documents. A complete list of the possible fee types is below, but each REP only applies a subset of these. Your REP will also pass through any separate, TDU-levied charges for many of the same situations.
In general, none of these fees apply if you manage your account solely online, subscribe to paperless billing and Autopay, and never miss a payment. But if you have to make an occasional manual payment or speak to a Customer Service Representative, your REP may charge a nominal fee. And if you miss payments to the point of getting disconnected and/or referred to a collection agency the fees can get very high.
The RateGrinder calculator lists each plan’s applicable REP fees to the right of the main ‘Results’ table. Since they are non-recurring charges, these fees are not factored into the cost calculations. They are provided for reference, however, as tie-breakers and to inform consumers of the services each REP offers on a free- vs. paid basis.
Sample REP Fee | Description |
---|---|
Late Payment | % of each month’s balance due if paid after the due date, per month |
Insufficient Funds | per payment transaction returned unpaid or not processed (e.g. returned checks; returned EFTs, rejected credit cards) |
Early Cancellation | if customer cancels contract prior to [14 days before] contract expiration date |
Autopay Breakage | per bill if autopay required but not established |
Manual Payment | per payment not made by approved Autopay method |
Credit card auto-draft payment | per payment |
One-time credit card payment via web | per payment |
One-time bank draft via web | per payment |
Business Credit Card Payment | per commercial, corporate, or business-related credit card transaction |
Serial Payments | for 6th and successive payment(s) in a single month |
Payment Assist | per payment processed with the help of a CSR |
Agent Assist | per live call with a CSR |
e-bill Breakage | per bill if e-bill required but not established |
Doc Processing | per request for additional bill copies, duplicate bills, or payment reference letters |
Summary Bill | per request for a summary bill |
Priority Connect | to process a priority connection request (+ TDU charges) |
Move-In Date Change | to process date changes to move-in request |
Move-Out Date Change | to process date changes to move-out request |
Meter Re-Read | per meter re-read request processed (+TDU charges) |
Disconnect Notice | per each disconnection notice provided to the customer |
Disconnection | per service disconnection request processed (+TDU charges) |
Disconnect Recovery | for failure to pay past due amount prior to expiration date of REP-issued disconnection notice |
Reconnection | per service reconnection request processed (+TDU charges) |
Reconnect after Tampering | if disconnection was the result of tampering |
Collection Call | per call to remind your payment is past due |
Collections Recovery | if account transferred to a collection agency |
Collections Legal | for legal & expenses related to collections |
Inactivity | per month with zero usage |
Unauthorized Enrollment | if customer enrolls for a service address for which they’re not authorized |
See these links for more details on what the PUCT requires your REP to include in your EFLs and billing statements.
Transmission and Distribution Utility Charges, also known as Texas TDU Delivery Charges, impact your monthly electric bill. Delivery rates change every March (usually down) and every September (usually up).
You may open up your electricity bill and notice new line items, or a different charge compared to the prior month. Most of the time, it’s small changes in the delivery rates, but these can add up. There’s no way to avoid these changes, but it helps if you understand what’s going on.
What are the Current Texas TDU Delivery Charges?
Looking for Oncor Delivery Charges or Centerpoint Delivery Charges? Below are the current monthly TDU Delivery Charges for all 5 of the deregulated Texas markets. (Current as of 9/1/2020)
Utility Delivery Company | Monthly Charge | Charges per kWh |
---|---|---|
Centerpoint | $4.39 | 4.2308¢ |
Oncor | $3.42 | 3.9220¢ |
AEP TX Central | $4.27 | 4.2929¢ |
AEP TX North | $3.57 | 3.5325¢ |
TNMP | $7.85 | 4.9093¢ |
As of April 1, 2020, the Public Utility Commission of Texas (PUCT) approved the Texas COVID-19 Electricity Relief Program. Every Texas residential and business customer in the deregulated electricity market will pay for this relief program. A new delivery charge, or tariff, was approved by the PUCT of $.00033/kWh. This tariff is included in the current TDU delivery charges. For a customer using 1200 kWh a month, the increase amounts to 40¢ per month. You will see an additional line item on your electricity bill for this new tariff, or your electricity provider may add the new tariff to the existing utility delivery charges per kWh.
What are TDU Delivery Charges?
TDU delivery charges pay for the maintenance of the poles and wires that deliver electricity to your home and for the meters that measure it. The TDU delivery rates are regulated. Any changes to the TDU delivery rates must be approved by the Public Utility Commission of Texas (PUCT).
These delivery rates are passed through to the customer without markup. They are included in your bill from your retail electricity provider (REP).
These TDU delivery charges may show as a line item on your bill, or may be “bundled” in with an energy rate.
The TDU delivery areas in Texas that participate in deregulation are: Oncor, CenterPoint, AEP Texas Central, AEP Texas North, and Texas-New Mexico Power (TNMP).
I Thought I Had a Fixed Rate? Why Will I Be Impacted?
This is a common complaint of residential electricity customers in Texas — “I signed up for a fixed rate, and then it changed!”
Here’s the real deal.
Whether you have a “bundled rate” (one rate for both energy and delivery) or an “unbundled rate” (a fixed rate for energy plus delivery rates passed through at cost), when the delivery rate changes, the overall price you pay for electricity will change.
Most of the confusion is over bundled rates.
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The fine print on the electricity facts label usually says something like this:
“The price you pay each month will reflect the transmission and distribution utility TDU Delivery Charges in effect for your monthly billing cycle.”
Or it may include something like this:
“**TDU Delivery Charges are subject to change.”
In English: When the TDU Delivery Charge changes, your price will change.
If you have a bundled rate, you will typically see a new line item on your bill when delivery charges change, with a description like “Centerpoint Energy Additional XXXX Charge.”
If you have an unbundled rate, the delivery rate per kilowatt hour will simply change on your bill, with no additional line items.
When Do TDU Delivery Rates Change?
TDU delivery rates change officially twice a year, March 1 and September 1.
The Public Utility Commission of Texas (PUCT) must approve TDU delivery charges.
Just know that if delivery rate changes occur and they impact your bill, your supplier can provide the details of the change.
Why Do TDU Charges Change?
Each of the regulated utility companies is entitled to collect 100% of their costs from their rate payers, and receive a guaranteed rate of return. That’s because they provide a critical public service: delivering electricity, maintaining the infrastructure, and responding in case of an emergency.
The Public Utility Commission of Texas reviews and approves each utility’s rate case.
The items in each rate case may include costs from hurricane or storm recovery, upgraded service equipment, or bond issues and financing costs for system upgrades.
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What Makes Up the TDU Delivery Charges?
There are multiple components included in the TDU delivery charges, with fascinating names like
- Energy Efficiency Cost Recovery Factor (EECRF)
- Transmission Cost Recovery Factor (Rider TCRF)
- Accumulated Deferred Federal Income Tax (ADFIT) Credit
- Transition Charges (Schedule TC2, TC3, SRC, and TC5)
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Most REPs summarize these TDU delivery charges on your monthly electric bills. You will not see this level of detail on your monthly residential bill.
The PUCT maintains official copies of the tariff documents on their web site. These tariff documents are 200+ pages long and are a proven cure for insomnia. Give ’em a read!
Lock in Your Energy Rate
Tom Ford Macau
While you can’t control the delivery rates on your bill, you have the power to choose your electricity supplier. You can control the price you pay for every kilowatt hour of electricity.
We created ElectricityPlans to help consumers make sense of their electricity bill. We only work with reputable providers. And, our staff carefully reviews the fine print on each plan. Plus, if you need more help, we can shop for you with our free PlanScan feature.
Tom Forma
Want more info about shopping for electricity in Texas? Read our Definitive Guide to Electricity Shopping. Or, here’s the Cliff Notes version: Shop, Switch, Save.