The average Texas electricity rate is 15.61 cents per kilowatt-hour (kWh), according to October 2024 data from the U.S. Energy Information Administration (EIA). However, the rate you pay will depend not just on your retail electricity provider (REP) but also on the transmission and distribution utility (TDU) that maintains the infrastructure and delivers electricity to your home.
“TDUs are responsible for maintaining the wires and making sure electricity gets from where it’s generated to your toaster,” said Fox Swim, a solar policy researcher at Aurora Solar. TDUs work with the Electric Reliability Council of Texas (ERCOT) and the Public Utility Commission of Texas (PUCT) to manage the grid and respond to issues like outages and demand spikes. ERCOT oversees the electricity market, while the PUCT regulates REPs and TDUs to ensure fair pricing.
Both your light company and your utility company charge fees that appear on your bill, so understanding these costs is important. You can take advantage of the deregulated market and lower your electricity costs by comparing light companies and signing up for a plan with cheaper rates. Meanwhile, your utility company delivers electricity reliably to your home. Read on to learn what your TDU is responsible for and how it affects your electricity costs.
What Is a TDU?
A TDU, more commonly known as a utility company, owns and maintains power lines and other electric infrastructure that deliver power to your home. In short, they manage the power grid in your area. When there’s a power outage, it’s the utility company — not your light company — that responds and handles repairs.
In regulated markets, your utility company sells and delivers your electricity. The Texas deregulated electricity market separates these responsibilities to break up electric monopolies into three entities, including generators, utility companies and electric companies.
Generators produce electricity from various sources, such as natural gas, wind and solar energy — even nuclear power. You’ll deal almost entirely with your light company when you have questions about your electricity plan, pricing or billing issues. However, during a power outage or other electric delivery concern, reach out to your utility company. While you choose your power company, your utility company is assigned based on your location and can’t be changed.
What Are the Six Main TDUs in Texas?
The main TDUs in Texas include:
- AEP Texas
- CenterPoint Energy
- Oncor Electric Delivery
- Lubbock Power & Light (LP&L)
- Texas-New Mexico Power (TNMP)
Each serves a different area of Texas. Read on to learn more about each utility company.
Oncor Electric Delivery
Oncor serves 410 communities across 98 counties in Texas, including cities like Dallas, Fort Worth, Waco, Arlington, Killeen and Midland. With over 143,000 miles of power lines, it’s one of the state’s largest utilities. Oncor’s outage map is updated every 10 minutes. You can report outages by enrolling in My Oncor Alerts or calling 888-313-4747.
Oncor adds the following delivery charges to all electricity plans offered within its service territory:
- Base charge: $4.23 per month, regardless of your consumption
- Delivery charge: 5.1893 cents per kWh
CenterPoint Energy
CenterPoint Energy manages the grid for most of the Houston area. In addition to Bayou City, CenterPoint delivers electricity in Katy, League City, Sugar Land and several other nearby communities. Centerpoint owns over 56,000 miles of power line, 46 percent of which are underground. You can locate power outages with CenterPoint’s online tracker.
Centerpoint adds the following delivery charges to all electricity plans offered within its service territory:
- Base charge: $4.39 per month
- Delivery charge: 5.3509 cents per kWh
AEP Texas Central
AEP Texas is one TDU entity with two separate divisions that manage different grid territories in Texas. AEP Texas — North and Central — serves about a million customers in 375 communities throughout 93 counties in Texas. AEP Texas Central operates in south Texas, delivering power to cities like Corpus Christi, San Benito and Laredo.
AEP Texas Central adds the following delivery charges to all electricity plans offered within its service territory:
- Base charge: $3.21 per month
- Delivery charge: 6.1057 cents per kWh
AEP Texas North
AEP Texas North operates under the AEP Texas umbrella, serving communities such as Abilene, San Angelo and Vernon. You can report a power outage to AEP Texas North and Central and check the live outage map online.
AEP Texas North adds the following delivery charges to all electricity plans offered within its service territory:
- Base charge: $3.21 per month
- Delivery charge: 5.7659 cents per kWh
Texas-New Mexico Power (TNMP)
Serving over 270,000 homes and businesses in Texas, TNMP’s service area is less centralized than other utilities. This TDU operates in west Texas, central Texas and Gulf Coast regions. TNMP is headquartered in Lewisville but delivers power to a range of Texas cities, including Clifton, Bryson, Texas City, Alvin, Pecos and Fort Stockton. You can use TNMP’s online tools to check the power outage map or report downed lines in your area.
TNMP adds the following delivery charges to all electricity plans offered within its service territory:
- Base charge: $7.85 per month
- Delivery charge: 6.2927 cents per kWh
Lubbock Power and Light (LP&L)
LP&L serves over 100,000 customers and owns nearly 5,000 power lines in Lubbock. Check LP&L’s power outage resources online. Lubbock just joined the ERCOT grid, having deregulated its energy sector in early 2024. However, LP&L has provided electric services to the Lubbock area since 1916.
LP&L adds the following delivery charges to all electricity plans offered within its service territory:
- Base charge: $0 per month
- Delivery charge: 6.442 cents per kWh
How Do I Know Which TDU Serves My Area?
You can determine which TDU operates in your area by checking past electricity bills or your current energy plan’s electricity facts label (EFL). The EFL is a useful tool for comparing energy plans and electricity rates, outlining key details, such as the energy charge, TDU delivery charges and early termination fees (ETFs). You may also be able to find your area’s TDU on your local city’s utility website.
Unless you live in a regulated part of Texas, you’ll be dealing with one of the six major utility companies mentioned above. Some of the biggest regulated cities include Austin, San Antonio and The Woodlands.
You can find the utility company in your service area by punching in your ZIP code below and reviewing the EFL for any energy plan. You can also compare plans and providers to see if you might benefit from switching light companies.
How TDUs Differ from Retail Electric Providers
The TDU is the local utility company that manages the power grid, which is why it’s sometimes called the “poles and wires” company. TDUs ensure power flows from the grid to your home, handling everything from repairing downed power lines to upgrading equipment and addressing power outages. Retail energy providers (REPs) market electricity plans and bill you for your energy usage. Energy providers, or power companies, don’t actually deliver electricity to your home or business.
It’s like shopping for a new pair of shoes online. While the shoemaker builds the product, a separate shipping company delivers those new shoes to your door. When shopping for electricity, the REP makes the product — i.e., your energy plan — and the TDU is the delivery service that makes sure the electricity makes sure the product gets to your door. You’ll find charges from both the utility company and the energy company on your energy bill.
Role of TDUs
Utility companies manage the local power grid, which includes maintenance and repair issues. When managing the infrastructure, TDUs install new equipment or make repairs when needed to provide reliable service. In short, it’s the utility company that’s responsible for keeping the grid reliable so you can keep your lights on. Utility companies respond to power outages and delivery issues, like flickering lights or low voltage.
The utility company also reads meters to track energy use and ensure accurate billing. While some homes still have analog meters that require manual reading, most new builds come with smart meters that send usage data directly to the utility company every 15 minutes.
Regardless of who your light company is, you’ll receive the same service quality from your TDU. Most utilities offer incentives, programs or energy-saving tips to lower your electric costs. For example, Oncor offers a load management program where qualified homes can reduce usage during high-demand periods and receive incentives. However, you participate in these programs through your electric company and must meet the program’s eligibility requirements.
Role of REPs
Texas electricity providers sell you electricity plans, setting your rate and contract terms. Deregulation created competition between providers, leading to the creation of different plan types to suit a range of needs. The most common plan types are fixed-rate plans and variable-rate plans, although Texans can also choose from bill credit plans, renewable energy plans and prepaid energy plans.
With oversight from the PUCT and ERCOT, energy companies purchase power from generators in wholesale auctions. Electric companies then sell that power to you. REPs don’t deliver power to your home. However, you should contact your REP for any questions about your plan, billing or account changes.
How TDUs Affect Your Electricity Service and Bill
The utility company that operates in your area has a direct impact on your energy bill because of the delivery fees every utility company charges. Due to the cost and challenges of managing the local grid, every utility company charges different delivery fees. This means that how much you pay for electricity delivery will vary based on which utility service area you reside in.
TDU Charges on Your Bill
On your electricity bill, you’ll notice a separate charge from your Texas electric utility. Most TDUs charge a flat monthly fee and a charge per kWh of energy usage. However, some utilities may just charge one or the other.
The PUCT regulates delivery charges for fairness and transparency. For example, when comparing electricity plans in Houston, you’ll find that delivery charges from CenterPoint Energy remain the same regardless of which REP you choose.
Electricity Outages
The reliability of your electricity depends on how well your TDU maintains the infrastructure. Outdated and damaged equipment typically leads to more frequent outages compared to those who respond quickly and make timely repairs.
Contact your TDU in the event of a power outage. For your convenience, all six main utility companies in Texas offer outage maps and online reporting features. However, you can also contact them by phone.
Frequently Asked Questions About Texas Electric Utility Companies
Can I choose my TDU in Texas?
No, you can’t choose your TDU in Texas. Local utility companies are determined based on your address. However, you can choose your electric company and electricity plan.
Do all REPs operate in all TDU service areas?
Some electricity companies operate in all utility service areas, while others only provide energy plans in certain cities. You can determine if a light company operates in your area by entering your ZIP code on this page.
How do TDU charges affect my electricity rate?
Your effective electricity rate comprises the energy charge from the light company and delivery fees from the utility company. Most utility companies charge a flat monthly rate and a rate per kWh of energy used. You can determine the cost breakdown by reviewing your energy bills or searching your utility’s website for the latest fees.
