Understanding TDU Charges: Oncor vs CenterPoint vs AEP vs Entergy vs TNMP
Learn what TDU charges are, how they differ by provider, and why they're the same regardless of your electricity provider.
Last updated: January 2026
💡What are TDU charges?
TDU (Transmission and Distribution Utility) charges are fees for the physical delivery of electricity through power lines, substations, and transformers. Set by your local utility (Oncor, CenterPoint, AEP, TNMP, or Entergy) and regulated by the state, these charges are identical regardless of which retail electricity provider you choose.
When reviewing your Texas electricity bill, you'll notice that your total cost is split into two main components: energy charges (the electricity you consume) and TDU charges (the delivery of that electricity to your location). While you can shop around for lower energy rates, TDU charges are fixed and determined by your local transmission and distribution utility.
Understanding TDU charges is critical for accurately comparing electricity quotes and calculating your true total cost. Many businesses make the mistake of focusing only on the advertised per-kWh energy rate without accounting for TDU charges, which can add 3-5¢ per kWh to your bill. This guide explains what TDU charges are, how they differ by provider, and why they remain the same regardless of which retail electricity provider (REP) you choose.
Texas has five major TDUs serving different regions: Oncor, CenterPoint Energy, AEP Texas, TNMP, and Entergy Texas. Each TDU sets its own rates based on the cost of maintaining and upgrading the physical infrastructure in its service area. Let's break down what these charges cover and how they compare across providers.
What Are TDU Charges?
TDU charges (also called delivery charges or transmission charges) are fees paid to your local utility company for the physical infrastructure that delivers electricity from generation plants to your business. These charges cover the cost of maintaining and operating:
- High-voltage transmission lines that carry electricity across long distances
- Local distribution lines that deliver electricity to individual businesses and homes
- Substations and transformers that step down voltage for safe delivery
- Meters and metering equipment that track your electricity consumption
- Emergency repairs and storm restoration after weather events
TDU charges are regulated by the Public Utility Commission of Texas (PUCT), which reviews and approves rate changes based on the utility's documented infrastructure costs. This regulation ensures that TDUs cannot arbitrarily raise rates and that charges reflect the actual cost of maintaining the grid.
It's important to understand that TDU charges are pass-through fees. Your retail electricity provider (REP) collects these charges on your bill and passes them directly to the TDU. Your REP does not profit from TDU charges—they only profit from the energy charges (the per-kWh rate you negotiate).
TDU Charges by Provider (2026 Comparison)
The table below compares typical TDU charges across Texas's five major transmission and distribution utilities. Rates are approximate and vary based on voltage level, demand charges, and specific service classifications. Always check your Electricity Facts Label (EFL) for exact TDU charges applicable to your business.
| TDU Provider | Service Area | Typical Rate (¢/kWh) | Monthly Base Charge | Notes |
|---|---|---|---|---|
| Oncor | Dallas, Fort Worth, West Texas | 3.5 - 4.5¢ | $5 - $15 | Largest TDU in Texas, serving 10+ million customers |
| CenterPoint Energy | Houston, Galveston, Brazos Valley | 3.8 - 4.8¢ | $5 - $12 | Second-largest TDU, serving Houston metro area |
| AEP Texas | Corpus Christi, Laredo, South Texas | 4.0 - 5.2¢ | $7 - $18 | Two divisions: AEP Central and AEP North |
| TNMP | Lubbock, Abilene, scattered rural areas | 4.2 - 5.5¢ | $8 - $20 | Serves smaller cities and rural communities |
| Entergy Texas | Beaumont, Port Arthur, Southeast Texas | 4.0 - 5.0¢ | $6 - $15 | Smallest of the five major TDUs |
Important: You cannot choose your TDU. Your TDU is determined by your service address and cannot be changed unless you physically relocate to a different service area. When comparing electricity quotes, always ensure the TDU charges are included in the total cost calculation.
Why TDU Charges Are the Same Regardless of Your REP
One of the most common misconceptions in the Texas deregulated electricity market is that switching retail electricity providers (REPs) can reduce your TDU charges. This is not true. TDU charges are identical regardless of which REP you choose because they are set by your local utility company, not by your REP.
Here's why: In Texas's deregulated market, the electricity supply chain is split into three separate entities:
- Generation Companies: Produce electricity at power plants
- Transmission & Distribution Utilities (TDUs): Own and maintain the physical infrastructure (power lines, substations, meters)
- Retail Electricity Providers (REPs): Sell electricity to customers and handle billing
Your REP only controls the energy charges (the per-kWh rate you pay for electricity consumption). The TDU charges are set by your local utility and are the same for all customers in that service area, regardless of which REP they choose. Your REP simply collects the TDU charges on your bill and passes them through to the TDU.
This structure means that when you're comparing electricity quotes from different REPs, you should focus on the energy rate, not the TDU charges. The TDU charges will be identical across all quotes for your service address. The only way to reduce your total electricity bill is to negotiate a lower energy rate or reduce your overall consumption.
How to Calculate Your Total TDU Charges
Calculating your total TDU charges is straightforward once you understand the two components: the per-kWh delivery charge and the fixed monthly charge. Both of these are listed on your Electricity Facts Label (EFL), which every REP must provide before you sign a contract.
Step 1: Identify Your TDU's Per-kWh Rate
Your EFL will list the TDU delivery charge as a per-kWh rate, typically between 3¢ and 5¢ per kWh. This rate is applied to your total monthly electricity consumption.
Step 2: Identify Your TDU's Fixed Monthly Charge
Most TDUs also charge a fixed monthly fee (sometimes called a "base charge" or "customer charge") that covers the cost of meter reading and account maintenance. This charge typically ranges from $5 to $20 per month.
Step 3: Calculate Your Total TDU Charges
Use this formula:
Total TDU Charges = (Monthly kWh × TDU Rate) + Fixed Monthly Charge
Example Calculation:
Let's say your business consumes 10,000 kWh per month and is served by Oncor:
- Monthly Consumption: 10,000 kWh
- Oncor TDU Rate: $0.04 per kWh (4¢)
- Oncor Fixed Monthly Charge: $10
TDU Charges = (10,000 kWh × $0.04) + $10
TDU Charges = $400 + $10 = $410
In this example, your total TDU charges for the month would be $410. If your energy rate is 9¢ per kWh, your total electricity bill would be: (10,000 kWh × $0.09) + $410 = $900 + $410 = $1,310 total.
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Frequently Asked Questions About TDU Charges
What are TDU charges on my Texas electricity bill?
TDU (Transmission and Distribution Utility) charges are fees for the physical delivery of electricity to your business through power lines, substations, and transformers. These charges are set by your local utility company (Oncor, CenterPoint, AEP Texas, TNMP, or Entergy) and regulated by the Public Utility Commission of Texas. They are the same regardless of which retail electricity provider you choose.
Why are TDU charges the same regardless of my electricity provider?
TDU charges are the same regardless of your retail electricity provider (REP) because they are pass-through fees set by your local utility company, not by your REP. Your REP only sells you the electricity; the local TDU owns and maintains the physical infrastructure. Since there is only one TDU serving your location, these charges are identical no matter which REP you choose.
Which TDU has the lowest charges in Texas?
TDU charges vary by provider and service area, but generally range from 3¢ to 5¢ per kWh. Oncor and CenterPoint typically have similar rates (3.5-4.5¢ per kWh), while AEP Texas, TNMP, and Entergy rates can be slightly higher (4-5¢ per kWh). However, you cannot choose your TDU—it is determined by your service location.
How do I calculate my total TDU charges?
To calculate your total TDU charges, multiply your monthly electricity consumption (kWh) by your TDU's per-kWh rate, then add any fixed monthly charges. For example: 10,000 kWh × $0.04/kWh = $400 in TDU charges. Your electricity bill itemizes TDU charges separately from your energy charges, making them easy to identify.
Can I negotiate or reduce my TDU charges?
No, you cannot negotiate or reduce TDU charges. They are regulated by the Public Utility Commission of Texas and are the same for all customers in a TDU's service area. The only way to reduce your total electricity bill is to negotiate lower energy rates with your retail electricity provider or reduce your overall consumption.