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What are TDU charges, and how does it impact your utility bill?

Transmission and Delivery TDU Charges, also known as Transmission and Distribution Utility Charges, is an amount that impacts your monthly electricity bill. It’s a mandatory charge for delivering and servicing electricity from the generation source to the meter.

Usually, there is a small delivery charge, but these can add up. While you cannot avoid these charges, you can understand what’s happening.  

What Are Distribution Utility Delivery Charges?

TDU delivery charge is nothing but a maintenance amount that you are charged for the electric poles and wires that deliver electricity. You are also charged for the meters that measure the electricity.

The TDU delivery rates are approved by PUC (Public Utility Commission). Without markup, these delivery rates are passed through the customers. This amount is included by the REP (Retail Electricity Provider) in the utility bill. 

When Do Transmission and Distribution Utility Delivery Rate Change?

Officially, the TDU delivery rate changes twice yearly, i.e., in March and September. However, before the changes roll in, the PUCT must approve the delivery changes. 

Why Does TDU Delivery Rate Change?

The electricity companies in Texas must collect 100% of their cost from the ratepayers. As the companies provide essential public service, they are guaranteed to receive a rate of return. 

Each utility rate case is approved before it is sent to the customer. Each rate includes costs from upgraded service equipment, hurricane or storm recovery, or bond issues. 

How is TDU Calculated in Texas?

Each company sets a rate tariff for TDU delivery charges. PUCT[1] approves these rate tariffs because this state agency regulates Texas’s telecommunications, electricity, and water utilities. 

But private electricity providers can mark up their delivery charges without legal worry. While the TDU delivery charge is set and approved by a state agency, you can choose your electricity provider. 

Why is TDU Delivery Charges so High?

Have you ever wondered why your transmission and distribution utility bill is so high? There are a few reasons why the Texas electricity bill is so high. 

Faulty Meter 

You might receive a high monthly electric bill because of your faulty meter. Meters help in understanding the exact amount of electricity used. So, if the meter is not working correctly, you might pay more than you should. 

Switch From Analog to Smart Meter 

Another possible reason you might receive a high electric bill is because you use an analog meter. Also, if you have recently switched from an analog to a smart meter, the TDU rates can be high. 

Analog meters are known to show inaccurate readings. That’s why most retail electricity providers have switched or will be switching to smart meters, which are much more accurate. But early switching can cause a discrepancy in the charges. 

Fixed Component of Charge 

Your total TDU charge can be increased by a fixed component connected to your charge. For instance, if you travel for an entire month, your delivery charge rate can be higher than the usual kilowatt hour. 

Regardless of your electricity consumption, you can pay a fixed cost for transmitting and delivering electricity to your home. 

Ratchet Charges 

Ratchet charges come straight from the energy providers. It’s a fixed fee that depends on your annual peak demand for electricity. Unfortunately, ratchet charges are based on any peak demand level after it was assessed. 

For instance, if your electricity consumption for December is higher, you will be charged the same peak demand for other months. Unfortunately, you would have to pay the price even if you don’t use the same electricity. 

Electricity Provider Markup is High

If your electricity delivery company markup is high, you must pay high TDSP delivery charges. While the PUC approves this charge, your utility company can legally markup the same charge. 

Most of the time, the utility company tries to increase profits and hide by marking up the delivery charge. 

How to Save on TDU Delivery Charge?

If you are worried about the increased demand charges, you can implement a few tips to save money. Surely the maintenance poles and wire charges with electricity delivery service charges are approved by PUC; you can save money. 

Check Your Meter

Meters help to calculate the electricity consumption for a month. But if the meter gets faulty, a professional must check it. 

You must find the nearest utility provider and ask them to check your faulty meter. Consider replacing the analog meter with a smart meter so the utility company can get an accurate measurement. 

Audit Your Bill From Retail Electricity Provider 

Another way to save on TDU charges is by asking the electricity provider to audit the bill. This way, you can better understand what you are paying. Auditing the bill is essential to see if the service provider is marking the demand charges. 

For the billing audit, you need the most recent utility bill to understand electricity history usage with your past demand charges. 

Switch Electricity Provider 

You can switch to the electricity provider to save on the TDU delivery charge. While switching the provider, you need to remember that a part of the utility cost will depend on certain unique conditions of your home or business. 


TDU charge is the mandatory amount you must pay for the electric poles and wires delivering electricity. You are also charged for the meters that measure the electricity. 

As PUC fixes this amount, you cannot change it. But you can surely follow a few tips to decrease the TDU delivery charge. 

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