Understanding Texas TDU Delivery Charges: The Unavoidable Cost of Power

TDU delivery charges pay for the physical network that brings electricity to your home: the poles, wires, transformers, substations, meters, and crews that maintain them. Your local utility territory determines these charges, not the Retail Electric Provider (REP) you choose. They can make up a substantial share of a Texas electricity bill, so they need to be included whenever you compare plans.

In deregulated parts of Texas, your total bill generally has two parts: the retail electricity charge from your REP and the regulated delivery charge from your Transmission and Distribution Utility. Shopping only by an advertised energy rate can hide an important part of the final cost.

---

What is a TDU?

TDU stands for Transmission and Distribution Utility. You may also see the term TDSP, which means Transmission and Distribution Service Provider. In Texas electricity shopping, TDU and TDSP are interchangeable terms.

Unlike your retail provider, which manages your plan, account, and bill, the TDU operates the physical utility infrastructure for a defined geographic territory. No matter which REP you choose, your TDU stays the same for that address. The TDU owns, services, and manages infrastructure including:

• High-voltage transmission lines, neighborhood poles, and distribution wires.
• Substations and transformers.
• Your home's advanced digital smart meter.
• Emergency line crews that restore service after storms and outages.

There are six primary TDU territories in the competitive ERCOT market:

1. Oncor: Serving the Dallas-Fort Worth metroplex, Waco, and parts of West Texas.
2. CenterPoint Energy: Serving the greater Houston area and Galveston.
3. Texas-New Mexico Power (TNMP): Serving scattered areas of North, West, and Gulf Coast Texas.
4. AEP Texas Central: Serving Corpus Christi, the Rio Grande Valley, and much of South Texas.
5. AEP Texas North: Serving Abilene, San Angelo, and parts of the Texas Panhandle.
6. Lubbock Power & Light (LP&L): Serving the Lubbock area as it transitions from a municipal utility to deregulated ERCOT service.

If you are unsure which one applies to your home, use the territory area pages above or compare available plans in the GridWise database. Your service address, not your electricity company, decides the TDU.

Current TDU delivery charges by territory

The delivery rates below apply to standard residential service in each territory. The per-kWh amount is charged for every kilowatt-hour delivered, and the fixed charge applies each billing month.

Rates current as of October 7, 2026. Effective dates: Oncor October 4, 2026 (interim rates that may later be adjusted by the PUCT); CenterPoint September 30, 2026; AEP Central and AEP North September 29, 2026; TNMP September 13, 2026. LP&L is scheduled to change to 6.008 cents/kWh plus $2.50/month on November 1, 2026. TDU charges are updated periodically and may change.

The two dimensions of TDU pricing

TDU delivery fees are regulated pass-through charges. Retail electric companies list and collect them on the bill, but the delivery charges are set for the territory rather than chosen by the REP. Pricing generally has two parts.

1. The fixed monthly charge

This is a flat dollar amount charged each billing cycle, regardless of how much electricity your home uses. It helps fund the standing cost of maintaining an available connection to the grid.

2. The volumetric delivery charge

This is a per-kWh fee. Every kilowatt-hour delivered to your home is assessed at the territory's delivery rate. Because it rises with usage, using less electricity reduces this portion of your TDU expense.

For example, a home in Oncor territory using 1,000 kWh would have approximately $60.30 in volumetric delivery charges plus the $4.06 monthly fixed charge, before accounting for its retail energy charge and any applicable taxes or other bill items.

Where TDU charges appear on your EFL and bill

Before enrolling, look at the plan's Electricity Facts Label (EFL). It should identify the delivery charges applicable to the plan's TDU territory, often as a monthly charge plus a cents-per-kWh amount. The EFL also shows the plan's estimated average price at specific usage levels, which incorporates the required delivery charges for that territory.

On your monthly bill, TDU charges may appear as separate delivery line items, or they may be combined into the total charges collected by your REP. The wording varies by provider, but the underlying territory charges should match the TDU schedule in effect during the billing period. Read the full breakdown with our guide to reading a Texas electricity bill, and learn what to check before enrolling in our Texas EFL guide.

A plan with a lower advertised energy charge is not automatically less expensive if its EFL is being viewed for a different territory or if its pricing structure changes at your real usage level. Compare the total estimated bill, not only the retail rate.

Why do TDU delivery fees change?

A fixed-rate electricity plan fixes the retail energy portion of your contract. It does not lock delivery charges. The Public Utility Commission of Texas (PUCT) reviews and approves TDU rate changes, which can take effect as the regulated delivery schedule is updated.

Those updates can support items such as:

• Grid maintenance, fortification, and expansion.
• New infrastructure needed for growth and electricity demand.
• Storm recovery and rebuilding after severe weather.
• Metering, substations, and other distribution-system investments.

When a delivery schedule changes, the retail energy rate in your contract can remain unchanged while your bill changes because the pass-through TDU amount has changed. This is one reason the average cents-per-kWh shown on a bill can move even on a fixed-rate plan.

How to compare plans when delivery charges cannot be avoided

You cannot choose a lower-cost TDU for the same address. All REPs serving that territory use the same regulated delivery schedule. What you can control is the retail plan you select and how well its pricing fits your household's actual usage.

GridWise covers all six TDU territories with 1,500+ plans in its comparison database. Start with your address and real usage, then compare total estimated costs across eligible plans. This helps you spot plans with bill credits, usage thresholds, or tiers that can distort a simple cents-per-kWh comparison.

If you generate solar power, delivery charges can still matter to your economics. Review available solar buyback plans alongside your production and usage pattern. You can also upload your bill to work from the details on your current account rather than an estimate.

Balancing the equation

TDU delivery charges are unavoidable, but an expensive electricity plan is not. The practical response to delivery-cost changes is to evaluate the full bill using your actual usage, including both the retail and regulated components. Selecting a straightforward plan that matches your home's usage pattern is the best defense against avoidable retail costs.