Do you need clarification about Transmission and Distribution Utilities (TDUs) and their delivery charges? You’re not alone. Many people need to understand the complexities of TDUs and how they affect their energy bills.
Fortunately, there is help for those who feel overwhelmed by this topic. This guide provides a comprehensive overview of TDUs and explains how they charge customers for electricity delivery services. Topics include pass-through fees, deregulation, renewable energy sources, and more. With this knowledge, you’ll be able to make informed decisions about your energy bill.
- What are TDUs and what is their role in energy delivery?
- Why do TDUs charge customers for delivery services?
- What are pass-through fees?
- How to compare TDU rates across providers
- Renewable energy sources
- Arrow Energy is your energy expert
TDUs, also known as Transmission Distribution Utilities (TDUs), are companies that manage the transmission and distribution of electricity from power plants to residential and commercial customers. They own and operate equipment like wires, poles, transformers, etc., necessary for delivering electricity to homes and businesses. TDUs have a monopoly on the transmission and distribution of electricity in their service area and are regulated by state public utility commissions.
TDUs charge customers for their delivery services through a monthly bill component known as the Delivery Rate or “Delivery Charge.” This charge covers the cost of owning, maintaining, and operating the equipment necessary for delivering electricity to customers. The charge is based on the amount of electricity used in kilowatt hours (kWh) and can vary monthly depending on how much electricity is used during that period.
In Texas, pass-through fees are charged to customers of electricity providers as a way to recover the cost of services used to maintain and operate the electric grid. This includes things like transmission and distribution lines, power plants, and other infrastructure. The fees are approved by the Public Utility Commission of Texas (PUCT) and are passed through to customers on their monthly bills.
The purpose of these fees is to ensure that all customers who benefit from the electric grid pay their fair share of the costs associated with it. This helps to keep overall electricity rates affordable for everyone. In recent years, the pass-through fees have been a controversial issue in Texas. Some people believe that they unfairly burden lower-income families and businesses, while others argue that they are necessary to keep the electric grid reliable and affordable for everyone.
Comparing TDU rates across providers in Texas is an essential task for consumers looking to save on their electricity bills. To begin, it is important to understand that TDUs (Transmission & Distribution Utilities) are responsible for delivering the electricity from the power plants where it is generated to homes and businesses across Texas. As such, they are the ones who charge a fee for this delivery service, and those charges show up on your electricity bill as a “TDU Delivery Charge.”
In Texas, there are five different TDUs that serve other areas of the state: Oncor, CenterPoint, AEP Texas North, AEP Texas Central, and TNMP. Each of these companies serves a different region of Texas, so they offer different rates for their delivery service.
Oncor Electric Delivery Company is the largest Transmission and Distribution Utility (TDU) in Texas, serving Dallas, Fort Worth, Odessa, Killeen, Tyler, Wichita Falls, and Waco. With over 15 million customers, Oncor is the most extensive transmission company in the state.
CenterPoint Energy serves over five million customers in the state of Texas, covering nearly all major cities and regions. They have a strong presence in Houston, Dallas-Fort Worth, San Antonio, Austin, El Paso, and more. Their customer base is growing yearly, with new initiatives and technologies fueling their expansion so that the energy needs of Texans will be met with reliable energy services.
American Electric Power (AEP) North serves over two million customers in 20 counties across the North Texas region. This includes major cities and areas such as Dallas, Fort Worth, Austin, El Paso, Amarillo, Lubbock, and Abilene. In addition to ensuring reliable energy services to their customers.
American Electric Power (AEP) Texas Central TDU serves over two million customers in 41 counties across South and Central Texas and 18 counties in the Greater Houston area. This includes major cities and regions such as San Antonio, Corpus Christi, Brownsville, Waco, Kerrville, and Galveston. In addition to providing reliable energy services to their customers, AEP Texas Central TDU is also dedicated to investing in renewable energy technologies and innovative solutions that make it easier for customers to access their services.
Texas New Mexico Power (TNMP) serves over one million customers in 44 counties across Texas and New Mexico. This includes major cities and regions such as Houston, Dallas, San Antonio, El Paso, Albuquerque, and Las Cruces. TNMP is committed to providing reliable energy services to its customers while at the same time investing in renewable energy technologies and innovative solutions that help make it easier for customers to access their services.
Texas is an energy leader in the US, and renewable sources play an ever-important role in powering its citizens. With abundant solar, wind, and geothermal resources, plus a booming hydropower capacity, Texas has experienced tremendous growth in its renewable energy sector over the past decade. In 2021, the state generated over 18 percent of its total electricity from renewables – including utility-scale solar farms, rooftop solar panels, wind turbines, and more. These investments have led to a cleaner environment and healthier communities. The state is actively encouraging investments in emerging technologies such as carbon capture and storage systems (CCS), advanced batteries for grid storage, and electric vehicles to further reduce dependence on fossil fuels. With these combined efforts, Texas is setting an example for other states across America on how to transition to clean energy sources with tangible economic benefits.
Arrow Energy is an independent energy provider that offers competitive, low-cost electricity plans in Texas. Our members enjoy the benefits of lower delivery charges from all three TDUs and have access to our exclusive rewards program. Talk to one of our energy experts today to find out how much you could save with Arrow Energy.