What are TDU charges?
TDU stands for Transmission and Distribution Utility. This fee will appear on your monthly electricity bill, and it goes to your utility company for transporting and delivering electricity to your home or business. Another commonly used term for this charge is Transportation and Distribution Service Provider (TDSP). Here’s everything you need to know about TDU/TDSP charges on your monthly energy bills.
What do TDU charges pay for?
Utility companies are responsible for maintaining the electrical infrastructure of their service areas, including poles, wires, meters, and any other equipment required to deliver electricity. They also monitor the grid’s stability and ensure their equipment meets regulatory standards. These charges ensure the safe operation of the power grid and the successful delivery of electricity.
Current TDU charges for each Texas utility company
Five main utility companies operate across Texas. Each utility has different fees for delivery service. TDU charges are calculated in two ways on your energy bill:
- Base charge: A fixed monthly charge
- Usage charge: A rate per kilowatt-hour (kWh) consumed for each billing period
Here are the current TDU charges from each Texas utility company. We’ve also included an estimated total TDU charge based on the average monthly electricity usage of 1,000 kWh.
| Utility company | Monthly rate | Rate per kWh | Estimated total based on 1,000 kWh usage |
|---|---|---|---|
| AEP Texas Central | $3.21 | 5.2411 cents | $55.62 |
| AEP Texas North | $3.21 | 5.13 cents | $54.51 |
| Centerpoint | $4.39 | 4.338 cents | $47.77 |
| Oncor | $4.23 | 5.0029 cents | $54.26 |
| Texas-New Mexico Power | $7.85 | 5.7054 cents | $64.90 |
How utility charges change over time
The Public Utility Commission of Texas (PUCT) regulates delivery charges to ensure companies charge fair rates and provide dependable service. TDU charges are reviewed and updated twice annually, on March 1 and September 1. There are a couple of reasons why your utility charges may increase:
- Repair costs after a storm
- Electrical equipment maintenance and regulation costs
- System upgrades
- Electricity market dynamics
If you notice an increase in your delivery charges, it is likely due to one of these reasons.
Frequently asked questions about TDU delivery charges
Why are TDU charges so high?
Utility charges may be high for a variety of reasons. One of the main causes of high TDU fees is system maintenance and repairs. For example, if a storm damages wires or poles in your area, the utility company must pay to repair them. Texas’ power grid has an aging infrastructure that needs upgrades to meet the growing electricity demand.
Can I avoid paying TDU charges?
Unfortunately, there is no way to skip paying TDU charges, as these are required in Texas. Some utilities charge more for delivery fees than others. If you are concerned about high TDU charges, consider signing up for a cheaper electricity rate to lower your overall bill. Enter your ZIP code on our marketplace to explore affordable electricity plans in your area. You can review each plan’s Electricity Facts Label (EFL) to help estimate your bill based on your usage level.
How can I reduce my TDU charges?
While you cannot reduce the rate for TDU charges, you can reduce your electricity consumption. If you consume less kWh of electricity, your TDU charges and total electricity bill costs will also decrease. Another way to lower your electricity bill is to explore cheaper plans in your area. Our marketplace can help you switch plans for a more affordable option.
