In Texas, a Retail Electric Provider (REP) sells electricity plans and manages billing, while a Transmission and Distribution Utility (TDU) maintains the infrastructure for delivering electricity and ensures reliable service. Charges differ based on services provided.
In Texas, nearly 90% of residents choose their Retail Electric Provider (REP), yet many find themselves puzzled by the two names on their electricity bills. This confusion is understandable: while your REP manages your electricity plans and billing, it’s your Transmission and Distribution Utility (TDU) that ensures the power flows to your home.
Why are you limited to just one TDU, and what do the various charges mean? Let’s unravel the intricacies of Texas’s electric market and clarify your billing experience.
REP vs TDU in Texas: Core Differences and Roles
In Texas, retail electricity providers (REPs) and transmission and distribution utilities (TDUs) each take care of separate parts of your electric service. Their roles shape your electricity choices, what you pay, and how reliable your service feels in different parts of the state.
Overview of Retail Electricity Providers (REPs)
Retail Electricity Providers are the companies Texans pick when shopping for power. In the state’s deregulated market, REPs offer a variety of electricity plans, including fixed-rate, variable, and green energy options. This setup lets people compare prices, contract terms, and customer service before signing up.
REPs handle billing, plan setup, and customer accounts. They don’t own the wires or deliver the power themselves. Instead, they buy electricity wholesale and resell it to you. Names like Reliant, TXU Energy, and Direct Energy tend to pop up a lot.
When questions come up about a bill or a plan, Texans deal directly with their representative. Issues about rates or contracts get handled by the REP, not the TDU.
What Transmission and Distribution Utilities (TDUs) Do
Transmission and Distribution Utilities own and maintain the poles, wires, transformers, and meters that deliver electricity to homes and businesses. TDUs keep the physical power grid running, perform maintenance, and restore service after outages.
Customers don’t get to pick their TDU. CenterPoint Energy, Oncor, AEP Texas North, AEP Texas Central, and TNMP are the big names. No matter which REP you choose, the TDU handles the delivery side and steps in during emergencies like downed lines or blackouts.
Every Texas electricity bill includes TDU charges, usually called “Delivery” or “TDU Delivery Charges.” The Public Utility Commission of Texas (PUCT) regulates these fees, which help pay for grid reliability and upgrades. When there’s a power outage or something’s wrong with the infrastructure, the TDU, not the REP, takes care of it.
Why Your Address Determines Your TDU
Where you live in Texas decides your TDU. Each utility has a set territory, and they act as regulated monopolies within those boundaries. That means all customers in a given region get reliable service from the same TDU. Here’s how some regions break down:
| Location Example | TDU |
|---|---|
| Houston, Galveston | CenterPoint |
| Dallas, Fort Worth, Tyler | Oncor |
| Corpus Christi, Laredo | AEP Texas Central |
| Abilene, San Angelo | AEP Texas North |
| Lewisville, Texas City, Angleton | TNMP |
Switching TDUs isn’t allowed, since the infrastructure is tied to your address. The only choice you have is your REP; the TDU stays the same unless you move.
Transmission and Distribution Service Providers in Texas
Five main TDUs serve most of Texas: CenterPoint Energy, Oncor, AEP Texas North, AEP Texas Central, and Texas-New Mexico Power (TNMP). Each one manages its territory, and the Public Utility Commission of Texas keeps an eye on their rates and practices.
CenterPoint handles Houston and nearby areas. Oncor covers the Dallas-Fort Worth metroplex and a big chunk of North Texas. AEP Texas North takes care of West Texas, while AEP Texas Central looks after South Texas. TNMP serves scattered towns along the Gulf Coast and throughout central parts of the state.
The PUCT sets the rules for maintenance standards and response times. No matter which REP you choose, your TDU will appear on your bill, and delivery charges are non-negotiable. These utilities keep the electricity moving safely and (usually) reliably.
Delivery Charges, Electric Rates, and Bill Components
Texas electric bills break down into a few separate charges. Understanding your energy usage can help you monitor costs and find a plan that fits your household.
TDU Delivery Charges: How They Work
TDUs take care of getting electricity to your home. You’ll spot their fees on your bill as “TDU delivery charges” or sometimes “passthrough charges.” These cover everything from grid upkeep and repairs to meter reading and investing in new infrastructure.
TDU delivery charges include a fixed monthly fee and a variable rate based on how many kilowatt-hours you use. For example, in Oncor’s area in March 2025, the fixed fee runs $4.23 a month, and the variable rate is 5.0029 cents per kWh.
Only the Public Utility Commission of Texas can approve changes to these charges. TDUs review and update their rates twice a year, usually in March and September. Your REP passes these charges along; there’s no markup.
Breakdown of Texas Electric Rates
Your bill splits into two main sections: REP charges and TDU charges. The REP section covers your electricity plan and sets your energy rate, which is what you pay for the power itself. The TDU section includes the delivery fee.
Take Oncor as an example in March 2025:
| Charge Type | Amount |
|---|---|
| Oncor Fixed Charge | $4.23/month |
| Oncor Delivery Per kWh | 5.0029 cents/kWh |
| REP Energy Charge | Depends on your plan (example: 12.40 cents/kWh) |
| REP Fixed/Monthly Charge | Some plans have a daily fee (example: $0.67/day) |
Both REP and TDU charges show up on the same bill. If you switch REPs, only the REP portion changes. The TDU charges stick around unless you move to a new region with a different utility.
Impact of Electricity Plans and TDU Charges
Your monthly total depends on your plan’s energy rate, TDU delivery charges, and how much electricity you use. Fixed-rate plans keep your energy price steady, but TDU charges can shift every March and September.
Let’s say you use 1000 kWh in Oncor’s territory during March 2025:
- Energy Charge (12.40¢/kWh): $124.00
- TDU Delivery Charge (5.0029¢/kWh): $50.03
- Oncor Fixed Charge: $4.23
- REP Daily Charge ($0.67 x 30): $20.10
Usually, TDU charges make up about 27 to 29 percent of the bill for average usage. The rest comes from your REP and whatever plan you’ve picked.
Improving Energy Efficiency and Reducing Costs
Cutting electricity costs in Texas comes down to two things: the plan you choose and how much juice you use. Sure, you can shop around for a better rate with a retail electric provider, but those TDU charges, such as those from Oncor, CenterPoint, or AEP, stick with you unless you pack up and move to a different part of the state.
Lowering delivery charges means you’ve got to use less power, plain and simple. Swapping out old bulbs for LEDs, fixing up drafty spots around windows, or putting in a programmable thermostat can all chip away at your kWh usage.
Solar panels or other upgrades, such as better insulation, might also reduce your reliance on the grid. Some of these improvements could even snag you a federal tax credit, which is a nice bonus. Making a Texas home more energy efficient doesn’t just help the environment; it can significantly reduce both your energy charges and delivery costs every month.
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Christian Linden is a seasoned writer and contributor at Texas View, local Texas resident, travel enthusiast.and author of the Home Energy Playbook. He specializes in topics that resonate with the Texan community. With over a decade of experience in journalism, Christian brings a wealth of knowledge in local politics, culture, and lifestyle. When he's not writing, Christian enjoys spending weekends traveling across Texas with his family, exploring everything from bustling cities to serene landscapes.
