Your Texas electricity bill comes down to two big things: your usage and the delivery cost to your home. Add a few small fees and taxes on top, and that’s your bill. We break it down in plain English, so you know what you’re paying for, and which parts you control.
What are the 2 Main Parts of a Texas Electricity Bill?
In Texas’s deregulated market, two different companies show up on your bill. Your retail electric provider (REP) sells you the actual electricity. This is the company you signed up with, like Pogo. Your transmission and distribution utility (TDU, or sometimes TDSP) owns the wires and delivers electricity to your meter. Examples are Oncor, CenterPoint, AEP Texas, or Texas-New Mexico Power. You choose your REP. Where you live determines your TDU. Roughly speaking, energy charges make up a little over half of a typical bill and delivery charges about a third. Fees and taxes round out the rest.
What is the Energy Charge?
This is the part most people think of as “the rate.” It’s billed per kilowatt-hour (kWh): one kWh is the energy it takes to run a 1,000-watt appliance for an hour. If your plan is 12 cents/kWh and you use 1,000 kWh in a month, your energy charge is approximately $120. This is the only truly shoppable piece of your bill. Your REP sets your rate, and it’s what changes when you switch plans or providers. Some plans also add a fixed monthly “base charge” no matter how much you use. So, be sure to read the fine print.
What are TDU Delivery Charges, and Why can’t I Shop for Them?
TDU delivery charges cover moving electricity across the power lines and maintaining the grid in your area. They usually have two pieces: a fixed monthly charge (often around $4–$5) and a per-kWh charge that rises with your usage. Here’s the key thing: the Public Utility Commission of Texas (PUCT) regulates these rates and are identical for every customer in your utility’s territory, no matter which REP you use. The PUCT typically updates them twice a year (around March and September), which is a common reason a bill can jump even when your rate hasn’t changed. Because they’re regulated, no provider can discount them, so be skeptical of any offer that claims to.
What Other Taxes and Fees Show Up?
Beyond energy and delivery, you’ll usually see a small PUCT assessment (a fraction of a cent per kWh that funds the commission) and sales tax. Residential electricity is exempt from the 6.25% Texas state sales tax, but some local (city or special-district) sales taxes may still apply depending on where you live, up to about 2%. These items are typically a small slice of the total, but they’re why your final number lands a little higher than energy plus delivery alone.
How do I Read my Electricity Facts Label (EFL)?
Every Texas plan comes with an Electricity Facts Label: a one-page, standardized disclosure your provider must give you before you enroll. It shows the average price per kWh at three usage levels (500, 1,000, and 2,000 kWh) so you can compare plans apples-to-apples. Because delivery charges are “fixed plus usage,” your average price per kWh usually looks lower the more you use. If your household runs high in the summer (very common in Texas, where homes often use well above the national average), look at the 2,000 kWh column, not just the headline rate.
Why does my Bill Change from Month to Month?
Three big reasons: how much electricity you used (Texas summers push AC usage way up), those twice-a-year TDU rate updates, and whether your plan has tiered pricing or bill credits tied to specific usage levels. If you’re on a prepaid or pay-as-you-go plan, you see your usage and spending update daily instead of getting one big surprise at month’s end. That makes it easier to catch a spike, like a struggling AC unit, before it balloons.
Frequently Asked Questions
A: It’s the fee your local utility (Oncor, CenterPoint, AEP Texas, or Texas-New Mexico Power) charges to deliver electricity to your home. The PUCT regulates this. It is identical for everyone in your area, and can’t be discounted by any retail provider.
A: Your retail electric provider (REP) is the company you buy electricity from and can switch anytime. Your TDU is the utility that owns the wires and delivers the power based on your location. You can’t choose your TDU.
A: Cooling is the single biggest driver of home energy use in Texas. Per-kWh delivery charges rise with usage; a hot month raises both the energy and the delivery portions of your bill.
A: No, they’re regulated and fixed for your area. The only way to reduce that portion is to use less electricity. The energy charge is the part you can shop for by comparing plans and providers.
A: Texas homes use well above the U.S. average, often more than 1,100 kWh per month, because of long, hot summers. Your own usage appears on your bill and on your Electricity Facts Label comparison.