Some electricity buyers are confused about seeing a TDU delivery charge on their electricity bill. This should help clear up the confusion.
A transmission and delivery utility, or TDU, is the electric utility that distributes electricity from power generation companies to homes in Texas. Some of the TDUs in larger areas in Texas are CenterPoint Energy (Houston) and Oncor.
Your electric bill is made up of two main categories: the generation, or electricity supply portion and the delivery, or TDU portion.
Because electric markets in Texas are deregulated, you can choose who to buy your electricity from. The charges from this company – supply charges – are based on the electric plan you sign up for and are determined each month by how much electricity you use, what your electricity rate is and whether you have a variable-rate or fixed-rate plan.
On the other hand, TDU fees are determined by the state’s Public Utility Commission (PUC) and the TDU delivery charge is one of those fees. Your electric utility is allowed to charge delivery fees to everyone who gets electricity distributed to their home. The fees contain profit for the utility so that it can maintain the electric grid and the entire delivery infrastructure, including poles, wires and transformers.
Every electric customer must pay the TDU delivery charge, regardless of whether they choose an alternative electric supplier or not. You’ll probably be able to get cheaper electricity if you switch to an alternative electric supplier, but the TDU delivery charge will stay the same.