Commercial electricity delivery rates have a big impact on your business electricity bill. These delivery rates are also called Commercial Transmission and Distribution Utility Charges, or Texas TDU Commercial Delivery Charges.
By any name, they’re a part of your commercial electricity bill that you have little control over. Delivery rate changes impact every home or business in Texas.
However, it’s helpful to know when these delivery rates change, so you can make a note for your operating budget. Plus, you can take action to lower your total demand.
>Residential Texas TDU Delivery Charges
What are the Current Commercial Delivery Charges in Texas?
Here are the current TDU commercial delivery charges in Texas (current as of March 1, 2023)
Don’t know which tariff applies to you? If your bill always shows less than or equal to 10 kW (5kW in the TNMP service area) or if you don’t have demand (kW) on your bill, use the first chart. Otherwise, use the second chart.
TX Delivery Rates - Commercial Less Than 10kW - March 2023
|TDU Delivery Company||Monthly Charge||Charges per kWh|
|AEP TX Central||$5.79||5.01030¢|
|AEP TX North||$5.79||3.92560¢|
TX Delivery Rates - Commercial Greater than 10kW - March 2023
|TDU Delivery Company||Monthly Charge||Charge per kWh (Usage)||Charge per kW (Demand)|
|AEP TX Central||$14.69||0.09580¢||$10.460157|
|AEP TX North||$14.69||0.09580¢||$9.386125|
Shop Supply Rates for Business Electricity
What are Commercial TDU Delivery Charges?
TDU delivery charges pay for the maintenance of the poles and wires that deliver electricity to your home and for the meters that measure it. TDU delivery rates are regulated. The Public Utility Commission of Texas (PUCT) approves all utility delivery rates.
When you read your commercial electricity bill, you’ll see a section labeled “Delivery Charges.” This section includes your delivery fees and your demand charges.
A commercial electricity bill in Texas typically details all the TDU charges for your business. So you will see line items that may include the following:
- Customer Charge
- Metering Charge
- Distribution System Charge
- Transmission System Charge
- Nuclear Decommissioning Charge
- Transmission Cost Recovery Factor (TCRF)
- Transition Charges
When Do Delivery Rates Change?
TDU delivery rates change twice a year, March 1 and September 1.
The Public Utility Commission of Texas (PUCT) must approve delivery charges.
There are occasional small changes to the commercial delivery rates in between those dates. If the commercial delivery rates change, you can check back here for the latest rates.
It’s important to account for changes in delivery fees when you are creating your business budget.
Why are Texas Commercial Delivery Charges Increasing?
Each of the regulated utility companies is entitled to collect 100% of their costs from their rate payers. And they are guaranteed to receive a rate of return. That’s because they provide a critical public service: delivering electricity, maintaining the infrastructure, and responding in case of an emergency.
The Public Utility Commission of Texas reviews and approves each utility’s rate case.
The items in each rate case may include costs from hurricane or storm recovery, upgraded service equipment, or bond issues and financing costs for system upgrades.
But the biggest impact driving your commercial delivery rates up in Texas? Is transmission.
As the Texas economy and electricity demand grow, we need more sources of generation. Much of that generation is in the form of solar or wind, located in areas away from population centers. Transmission lines take the power where it needs to go.
The Transmission Cost Recovery Factor (TCRF) is how your delivery company recoups that cost. Third party companies build and operate transmission lines.
Lowering Your Texas TDU Demand Charges
While you can’t avoid paying commercial TDU delivery charges, you can have an impact on how much you pay for your demand charges. Your company can take steps to lower your demand charges.
To do so, you need to monitor your usage during the summer months of June, July, August and September.
ERCOT measures your demand based on your usage on days when the grid is at its highest usage level. This is called 4CP, or 4 coincident peaks.
Once your peak demand is established, it will stay that way for 12 months, unless you reach a new peak. Because of this, you are typically billed based on the greater of your 4CP peak demand or your current month’s peak demand.
Paying attention to your usage on the hottest days of the summer can lower your bill the following year.