You sign up for an electricity plan. Your lights turn on. All is good. But have you ever thought about how that electricity gets to your home and who is responsible for it?
In some areas across the country, they’re called a utility company. In Texas, the technical term is Transmission and Distribution Service Providers (TDSPs or TDUs). TDUs are the ones in charge of transmitting and distributing electricity from the power plants to your home. Those electricity poles that you see on the side of the road? Owned by the TDUs. The wires connecting them? TDUs.
TDUs own, operate, transmit, and distribute electricity across the Lone Star State. They take the energy from the electric grid and transport it to your home. They’re even in charge of reading your electric meter each month and restoring power whenever there’s an outage.
Why do I get charged for TDU delivery charges?
Because of everything above, really. TDUs provide a service, and the poles and wires they use to provide that service need to be upkept and maintained. And if something goes awry, they need to be fixed, and fixing costs money. These costs are billed directly from the TDUs to the respective retail energy provider (REP) and are passed on to the customer. These TDSP charges are usually called out separately from your energy rate on your electric bill. The charges are always approved by the Public Utility Commission of Texas (PUCT) and can change throughout the year, so you may not always see the same rates being assessed on your electricity bill. However, regardless of which REP a customer chooses, the TDSP charges are the same.
The TDU charges are broken down into two components:
Fixed monthly charge – Regardless of how much electricity you consume during your billing period, the same, flat month cost will be charged. Usually between $3 and $10 a month.
Variable monthly charge – This is a fixed, cents-per-kilowatt-hour rate that is multiplied by how much energy you use during your billing period, which also varies by TDU and typically ranges from 2¢-5¢ per kilowatt-hour.
TDUs in Texas
There are currently five TDUs across the deregulated markets in Texas.