Understanding Your Texas Electricity Bill
A Lot Goes Into Your Monthly Bill
In a deregulated electricity market like Texas, your monthly bill includes charges from both your electricity provider and your local utility. Understanding how these pieces fit together can help you spot unusual charges, track your usage, and make smarter choices when selecting or switching plans. This guide breaks down each part of the bill so you know exactly what you’re paying for—and why.
Two Companies, One Bill
Even though you only receive one bill each month, it reflects the work of two separate entities:
Your Retail Electric Provider (REP) is the company you choose. They supply the electricity, set your plan rate, and handle your billing.
Your Transmission and Distribution Service Provider (TDSP) is the local utility assigned to your area. They own and maintain the poles, wires, and meters. You cannot choose your TDSP.
This split is important to understand. Your REP charges for electricity supply. Your TDSP charges for delivering that electricity to your home.
What Shows Up on Your Bill
While the layout varies depending on the provider, most electricity bills in Texas include these core components:
Energy Charge
This is the cost of the electricity you used during the billing period, based on your plan’s price per kilowatt-hour (kWh). This is typically listed as:
A flat rate per kWh for fixed-rate plans
A changing rate for variable plans
A time-based rate if you’re on a time-of-use plan
You’ll also see your total kWh usage, which is how the energy charge is calculated.
Base Charge or Customer Charge
This is a flat monthly fee that some plans include regardless of how much electricity you use. It helps cover administrative and service costs.
Tip: If your usage is low, a base charge can make your average price per kWh higher than expected.
Delivery Charges (TDSP Charges)
These are fees from your local utility for maintaining the infrastructure and delivering electricity to your home. They include:
Transmission charges
Distribution charges
Metering services
Regulatory fees and assessments
These charges are set by the utility and approved by the Public Utility Commission of Texas (PUCT). All providers in your area pass them through to you at the same rate. That means switching REPs does not change these fees.
Miscellaneous Fees
Other potential charges include:
Late payment fees
Returned payment fees
Disconnect or reconnect fees (if applicable)
Charges for paper bills or non-standard payment methods
These are outlined in your plan’s terms of service and will vary by provider.
Example: Bill Breakdown
Here’s what a simplified monthly bill might look like for a customer using 1,000 kWh:
Line Item | Amount |
Energy charge (1,000 kWh @ 12¢) | $120.00 |
Base charge | $5.00 |
Delivery charges (TDSP fees) | $38.00 |
Total | $163.00 |
Even though your electricity plan is priced at 12¢ per kWh, the true cost per kWh is closer to 16.3¢ when you include delivery and base charges.
How to Read the Electricity Facts Label (EFL)
The EFL is a standardized document that breaks down:
The energy charge
Any fixed or minimum usage fees
Average prices at 500, 1000, and 2000 kWh
Renewable energy content
Contract length and termination fees
Use this document to estimate how the plan’s pricing would apply to your own usage before you enroll.
Don't overpay for electricity.
Helpful Tips
Track your usage monthly. Many providers offer online dashboards or mobile apps that help you spot patterns.
Understand your rate structure. Some plans include bill credits or pricing that shifts based on how much electricity you use.
Know what you can control. Delivery charges are set by the utility, but your provider, rate, and plan terms are up to you.
Ask questions if something looks off. Contact your REP first with billing concerns. If needed, the PUCT offers a complaint resolution process.
The Bottom Line
Understanding your bill helps you make sense of the numbers, avoid surprises, and compare plans more accurately. Once you know what each charge means and where it comes from, you can shop with more confidence and spot a better fit for your needs.
