1. The Four Components of Your Bill
Every Texas electricity bill has these four parts:
| Component | What It Is | You Control? | Typical Amount |
|---|---|---|---|
| Energy charge | What you pay your REP per kWh | Yes (shop for plans) | 8-15¢/kWh |
| TDU delivery | What CenterPoint/Oncor charges to deliver | No (regulated) | ~4¢/kWh + $3-5 base |
| Taxes & fees | PUC assessment, franchise fees | No | ~2.5% of subtotal |
| Credits | Bill credits if you hit usage thresholds | Partially | -$50 to -$100 |
Only the energy charge changes when you switch plans. TDU delivery, taxes, and fees are the same regardless of which REP you choose.
2. Energy Charge (The Part You Control)
This is the rate your Retail Electric Provider (REP) charges per kWh. It varies by plan type:
Fixed rate: Same ¢/kWh every hour of every day. Simplest to understand.
Tiered rate: Different rates at different usage levels. - 0-500 kWh: 10¢/kWh - 501-1,000 kWh: 9¢/kWh - 1,001+ kWh: 8¢/kWh
Time-of-use: Different rates at different times. - Free nights: 0¢ at night, 14-16¢ during the day - Peak/off-peak: Higher rate during afternoon summer hours
Bill credit: High base rate with a lump-sum credit at a usage threshold. - Base rate: 14¢/kWh - Credit: $75 if you use 1,000+ kWh - Miss the threshold? Full 14¢, no credit.
The EFL (Electricity Facts Label) is the only document that matters. It shows exactly how your energy charge is calculated.
3. TDU Delivery Charges (You Can't Control This)
Your TDU (Transmission and Distribution Utility) owns the power lines. They charge the same rates regardless of your REP.
| TDU | Per-kWh Charge | Monthly Base |
|---|---|---|
| CenterPoint (Houston) | ~3.9¢/kWh | $4.39 |
| Oncor (Dallas) | ~3.6¢/kWh | $3.42 |
| AEP Texas (South/West) | ~4.2¢/kWh | $5.43 |
| TNMP (scattered) | ~3.8¢/kWh | $7.85 |
On a 1,200 kWh bill, TDU charges add $42-55/month. This is why a plan advertised at 9¢/kWh actually costs 13-14¢/kWh effective.
Important: TDU charges are included in the rates shown on PowerToChoose. But when you're comparing the energy rate alone (from the EFL), remember to add TDU charges to get the real cost.
4. Taxes and Fees
Texas residential electricity is exempt from state sales tax. But there are still fees:
- **PUC Assessment:** ~0.17% — funds the Public Utility Commission
- **MGRT (Miscellaneous Gross Receipts Tax):** ~1.5-2%
- **City franchise fee:** Varies by city, typically 2-4%
Total fees: approximately 2-5% of your bill.
On a $150 bill, taxes and fees add $3-8. It's the smallest component, but it's there.
5. Reading Your Bill (What Each Line Means)
Here's what a typical Texas electricity bill shows:
- **Electricity usage:** Your kWh consumed during the billing period
- **Energy charge:** The REP's charge (your plan rate × kWh)
- **TDU delivery charges:** Regulated delivery fees (per-kWh + base charge)
- **Recurring charges:** Base charge or minimum usage fee (if applicable)
- **Usage credits:** Bill credit (if you hit a threshold)
- **Taxes and fees:** PUC assessment, MGRT, franchise fees
- **Total amount due:** Sum of all above
The number that matters for comparing plans: Energy charge per kWh. Everything else stays the same when you switch.
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Upload Your Bill →Frequently Asked Questions
Why is my effective rate higher than my plan rate?
Because TDU delivery charges add 3.5-4.5¢/kWh on top of your energy rate, plus a monthly base charge. A plan advertised at 9¢/kWh actually costs about 13-14¢/kWh when you include delivery and fees.
Can I reduce my TDU charges?
No. TDU rates are regulated by the PUC and are the same for all customers in a territory, regardless of provider. The only way to reduce TDU charges is to use less electricity.
Are there hidden fees in Texas electricity bills?
Not hidden, but often overlooked. Monthly base charges ($0-10), minimum usage fees, and TDU delivery charges are all disclosed in the EFL. The problem is most people only look at the ¢/kWh rate and skip the rest.
Related Guides
This guide is for informational purposes only. Electricity rates and plans change frequently. Always verify current rates before switching.