Texas Electricity Consumer Questions—TDU Charges

by | Jul 20, 2016 | Industry News

Occasionally, folks ask some good questions when they’re shopping for electricity. Our Texas Electricity Consumer Questions Series tries to clear up the confusion and answers those questions so you can be a better-informed consumer.

Generating electricity is only half its cost. Getting it to you is the other.
Photo by Ladyheart at Morguefile.com

From J. in Sharyland— “Are there any REPs that don’t have high TDU charges?”

We understand your frustration, J., but remember that REPs don’t have TDU charges —consumers do. Here’s why:

TDU’s own and maintain the local network of transmission and distribution lines. TDUs must offer access to their wires to all REPs on a non-discriminatory basis under standard terms and conditions set by the PUC. REPs sell the electricity to their customers.

Electricity consumers live within a TDU company’s service territory and receive their electricity via that utility’s wires. The consumer buys the electricity from a REP but must pay for the transmission and distribution of that electricity over the local wires to their home.

TDU delivery charges depend on where the consumer lives, who their TDU is, and the PUC-approved rate their TDU can charge them based on their electrical usage.

TDU service territories in ERCOT are divided into 5 main service areas which are based on the original investor-owned utilities (IOU) from before deregulation. These IOUs are:

Texas-New Mexico Power Company (TNMP)
AEP Texas Central
AEP Texas North
Center Point Energy

Sharyland Utilities territory mainly straddles Oncor and AEP Texas North.

Some background—
Back in March 2015, Sharyland Utility residential customers saw a 25% increase in their TDU charges. The increase stemmed from Sharyland’s rate case application to the PUC to increase its rates following its merger with Cap Rock Energy. The new service territory was then known as “SU-CapRock”.

Unfortunately, settling the whole mess turned into a game of “kick the hornet’s nest”. The PUC and all concerned parties are still working to sort it all out. Sharyland’s delivery rates remain among the highest in the state.

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