Are Electricity Bills Increasing? Updated October 2023

Are electricity bills increasing?

Are electricity bills getting higher? The short answer: yes, it’s possible. If you’ve recently experienced some sticker shock when receiving your most recent electricity bill, you may not be alone. In the last month in particular, a change was made to all Texas electricity bills across the entire state that may have led to a higher bill than you may have expected.

That change? An increase in the TDU Delivery Charge (or the TDU Pass Through Charge).

What does TDU stand for?

TDU stands for Transmission/Distribution Utility. TDUs are the companies that are responsible for the management and maintenance of the infrastructure that delivers electricity to your home or business in Texas. This is a separate service from your REP (retail electricity provider).

Currently, there are 5 TDUs. Here are the areas of Texas they service:

Oncor: Dallas, Fort Worth, Waco, Temple, Round Rock, Midland, Odessa
Centerpoint: Houston, Beaumont
Texas-New Mexico Power: League City, Glen Rose, Pecos, Angleton
AEP Texas Central: Corpus Christi, McAllen, Victoria, Laredo, Harlingen
AEP Texas North: Abilene, San Angelo, Vernon

What are TDU charges?

TDU charges cover the costs of the management and maintenance of the power lines and other related infrastructure handled by the utility company. Each TDU charge includes a fixed monthly fee and a variable delivery rate. These charges are updated twice annually (every March and September) with approval from the Public Utility Commission of Texas (PUCT).

Retail electric providers (like BKV Energy) are not allowed to charge a markup on these fees. BKV Energy and other retail electric providers have no control over TDU charges and receive none of the money that is charged.

Did TDU charges increase?

Yes, TDU charges have recently increased. Every March and September, the PUCT reviews and approves new TDU charges from each utility company.

Here’s how each TDU charge changed in September 2023:

Oncor

Fixed Monthly Fee stayed the same at $4.23 per month
Delivery Rate increased from $0.03498 to $0.050339 per kWh

Centerpoint

Fixed Monthly Fee stayed the same at $4.39 per month
Delivery Rate increased from $0.037332 to $0.054694 per kWh

Texas-New Mexico Power

Fixed Monthly Fee stayed the same at $7.85 per month
Delivery Rate increased from $0.045521 to $0.060465 per kWh

AEP Texas North

Fixed Monthly Fee stayed the same at $4.79 per month
Delivery Rate increased from $0.039205 to $0.051265 per kWh

AEP Texas Central

Fixed Monthly Fee stayed the same at $4.79 per month
Delivery Rate increased from $0.04297 to $0.055226 per kWh

Every six months, BKV Energy updates a table to show the previous and current TDU charges.

How TDU charge increases can impact your bill

Let’s look at an example to see how these ~2 cent per kWh TDU charge increases could impact an electricity bill.

Here’s the formula to calculate your electricity bill:

Energy Bill = kWh Usage x (Energy Rate + TDU Delivery Rate) + TDU Monthly Fee

We’ll compare a hypothetical bill in the Oncor utility region that consumed 1500 kWh during a billing period at both the previous and current TDU charges. We’ll use an Energy Charge of $0.09 per kWh.

Previous Oncor TDU charge

1500 kWh x ($0.09 + $0.03498) + $4.23 = $191.70

Current Oncor TDU charge

1500 kWh x ($0.09 + $0.050339) + $4.23 = $214.74

This hypothetical electricity bill increased nearly $25 for one billing period simply because the TDU charge rose by about 1.5 cents per kWh.

We know – this is very frustrating. Unfortunately, as a retail electricity provider, there is nothing we can about TDU charges. Those are entirely up to your region’s utility company and the Public Utility Commission of Texas.

What can you do to lower your bill?

Fortunately, there are certain things you as a homeowner or renter have control over. There are many actions you can take to reduce your electricity consumption which will have a direct impact on your energy bill. For example, you can:

Change your thermostat settings
Turn off the lights when you leave a room
Watch less television
Replace your HVAC air filters more often

We compiled a list of 100 energy saving hacks you can follow to reduce your electricity bill. Check them out and share with your friends and family.

If you have any questions about energy bills, TDU charges, or anything else, please do not hesitate to contact us at [email protected].

Written by Graham Lumley

Graham Lumley, Growth Product Manager at BKV Energy, leads digital and traditional marketing strategies, focusing on educating Texans about the state's deregulated energy market. With over 10 years of marketing experience, he creates content to help consumers understand and save on their energy bills, bringing a fresh and dynamic approach to the industry.