TDU Delivery Charges in Texas: Understanding Your Electricity Bill

What Are TDU Delivery Charges?

Every month, your electricity bill includes Transmission and Distribution Utility (TDU) charges, also known as TDU delivery charges. These fees cover the cost of delivering electricity to your business—maintaining power lines, repairing outages, and ensuring reliable service.

How Texas's Deregulated Energy Market Works

Texas has a deregulated energy market made up of three key players:

Power Generators

Companies that produce electricity using wind, solar, natural gas, and coal.

TDUs (Transmission & Distribution Utilities)

Operate and maintain infrastructure that delivers electricity. They don't sell electricity—they just ensure it gets delivered reliably.

REPs (Retail Electricity Providers)

Companies like Constellation, TXU, and Direct Energy that sell electricity plans. You can choose your REP, but TDU charges are fixed by location.

Key Points About TDU Charges

• TDU charges are set by the Public Utility Commission of Texas (PUCT) and are the same regardless of which Retail Electric Provider (REP) you choose.
• Rates change twice a year—on March 1 and September 1—after PUCT approval. September rates typically increase, while March rates often decrease.
• You cannot avoid TDU charges—they're a necessary part of your electricity bill that covers infrastructure maintenance, repairs, and reliable service delivery.
• Charges vary by location—Texas has five major TDUs (Oncor, CenterPoint, AEP Texas Central, AEP Texas North, and TNMP), each serving specific regions with different rates.

How Are TDU Delivery Charges Calculated?

TDU charges for commercial customers include two main components:

1. Delivery Charges (per kWh)

Based on your total monthly electricity usage. Calculated as:

          Monthly kWh Usage × $/kWh Rate
        

Example: 12,000 kWh × $0.0606/kWh = $727.20

2. Monthly Fixed Charge

A fixed monthly fee that covers basic service and infrastructure costs. This is added to your delivery charges.

          Fixed Monthly Fee
        

Example: $3.24 (AEP Texas Central) or $4.23 (Oncor)

Total TDU Delivery Charge Formula

        (Monthly kWh Usage × $/kWh Rate) + Monthly Fixed Charge = Total Delivery Charge
      

Real Example (AEP Texas Central, 12,000 kWh/month):

(12,000 kWh × $0.0606/kWh) + $3.24 = $727.20 + $3.24 = $730.44/month

When Do TDU Delivery Rates Change?

In Texas, TDU delivery rates officially change twice a year—on March 1 and September 1. These rates must be reviewed and approved by the Public Utility Commission of Texas (PUCT) before taking effect.

March 1 Rate Changes

Rates typically decrease in March as winter maintenance costs are factored in and demand patterns stabilize.

September 1 Rate Changes

Rates typically increase in September due to summer infrastructure maintenance, storm recovery costs, and increased demand from hot weather.

If you notice a difference in your bill around these times, it's likely due to TDU rate adjustments. Your electricity provider can break down the details if you need clarification.

Why Are TDU Delivery Charges Increasing?

TDU delivery charges fluctuate throughout the year based on several factors:

• Infrastructure maintenance and upgrades: Power lines, substations, and equipment require ongoing maintenance and modernization, especially after severe weather events.
• Data center and industrial growth: Massive expansion in AI, data centers, and industrial facilities requires utilities to upgrade infrastructure capacity, driving up costs.
• Storm recovery costs: Each major weather event (hurricanes, winter storms) results in significant repair costs that are passed through to customers.
• Population and commercial growth: Texas's rapid urbanization and business expansion outpace historic averages, requiring more infrastructure investment.

All rate changes are reviewed and approved by PUCT, which regulates TDUs. Your Retail Electric Provider (REP) doesn't set these fees—they simply pass them through with no markup beyond what's approved.

Historical Commercial Demand Charges

Track how commercial demand charges have evolved across major ERCOT TDUs. Rates shown reflect commercial tariff structures and include both fixed monthly charges and variable demand components.

TDU Delivery Charges Trend (Commercial)

Average per-kWh delivery rates across all ERCOT TDUs (Oncor, CenterPoint, AEP Central, AEP North, TNMP)

Current TDU Delivery Rates

Most recent commercial delivery rates by utility. Rates are updated twice yearly (March 1 & September 1).

Utility	Effective Date	Monthly Charge	$/kWh (Delivery)	Commercial Impact

TDU Delivery Charges Calculator

Use our calculator to estimate your total TDU delivery charges. Simply enter a few details from your electricity bill to see your estimated monthly and annual costs.

Select Your Local Utility (TDU) *

Look for your utility provider name in the "Delivery Charges" section of your electric bill.

Monthly Peak Demand (kW) *

Enter the highest kW value shown as "Peak Demand" or "Demand Charge" on your latest electricity bill.

Not sure? Typical examples: Small Office: 30-50 kW | Restaurant: 80-120 kW | Warehouse: 100-200 kW | Manufacturing: 200-500+ kW

Demand Charge Rate ($/kW)

Found near the demand charge line on your bill (e.g., @ $12.50/kW). We've auto-filled the typical rate—leave as-is if unsure.

Monthly kWh Usage *

Enter your total monthly electricity usage in kWh from your bill. Used to calculate delivery charges.

What are demand charges? (Click to learn more)

Demand charges are based on the highest amount of electricity you use at any one time during the month (not total usage).

Unlike energy charges (which are based on total kWh used), demand charges are based on your peak power demand—the highest 15-minute interval of power usage during the billing period. This reflects the infrastructure capacity the utility must maintain to serve your business.

Why it matters: Lowering your peak demand (by spreading out usage or reducing simultaneous equipment operation) can significantly lower this part of your bill, even if your total energy usage stays the same.

Current ERCOT Load Zone Rates

Compare current commercial demand charge rates across ERCOT transmission zones. Rates vary by TDU, tariff structure, and service level.

TDU Delivery Charges in Texas