ELECTRICITY IN TEXAS

The amount you pay for electricity in Texas is a two-part formula. The first part of the formula is the Transmission and Distribution Utility (TDU) charges. The TDU is the company that is responsible for maintaining the electric lines in your area. You will be charged a fee by the TDU for this service. This fee is non-negotiable and you can not shop around for a better rate. The TDU rates are updated each year on March 1st and September 1st. Even if you are currently in a contract during these dates, the TDU charges are subject to change without notice. Most Texan’s live in one of the TDU areas below. In rural areas, it is common for electricity to be provided by a co-op rather than one of the TDU providers below.  

The second part of the formula are the charges from your Retail Electric Provider (REP). You have complete control over which REP you choose unless you are located in an area that is serviced by a co-op. Each REP will have different energy plans available in your area with different rates, terms, and policies. There are hundreds of plans available for you to choose from and not all plans are created equal. At the end of the day, the REPs in Texas are trying to make as much money as possible and, sadly, often times the electricity plans offered by the REPs are predatory in nature. That’s why Texas Power Guru was founded. Simply put, it makes us irrationally angry that Texans overpay for what should be a simple commodity – electricity.

EXAMPLE

Each REP in Texas is required by law to provide an Electricity Facts Label (EFL) for each energy plan they offer. The EFL will contain the rate you will be charged and the terms of the agreement (length, cancellation fees, etc.).

Below is an example of an EFL that is located in the AEP Texas North TDU area. This REP charges $.07418 per kilowatt used PLUS the TDU charges. Therefore, you would be paying $.13323 ($.07418 + $.05905) per kilowatt used plus a monthly TDU base charge of $3.21.

Your total monthly cost can be calculated as the TDU base charge of $3.21 plus the amount of kWh you used during the month times $0.13323. An illustration of this calculation is below.