The Quick Answer
- • Your bill is really two charges combined: the energy charge from your provider and the delivery charge from your local utility.
- • The utility (delivery) portion is identical for everyone in your area no matter which provider you pick — only the energy charge is competitive.
- • Residential electricity in Texas is exempt from state sales tax under Tax Code §151.317. Some cities and special districts can still impose local sales tax.
- • Most bill increases come from higher usage, not a higher rate — especially in July-September when AC runs constantly.
What's Actually on Your Bill
A Texas electric bill can look intimidating, but it breaks down into a small number of components. Not every plan bills every line item separately — some providers fold the base charge into the energy rate — so treat this as what to look for, not a fixed template.
Energy Charge
~55-60% of total billBilled by: Your retail electricity provider (REP)
The per-kWh rate you shopped for and locked in (fixed-rate) or that can change monthly (variable-rate). This is the only line item that differs meaningfully between providers for the same usage.
TDU Delivery Charge
~40-45% of total billBilled by: Your local utility (Oncor, CenterPoint, AEP, TNMP, or Lubbock P&L)
A fixed monthly base fee plus a per-kWh delivery rate, set by the Public Utility Commission of Texas and identical for everyone in your utility’s service area regardless of which REP you choose.
Base / Customer Charge
Often bundled into the energy charge or shown as $0-10/monthBilled by: Your retail electricity provider
A flat monthly fee some plans charge just for having an active account, separate from usage. Many current Texas plans have rolled this into the per-kWh rate instead of billing it separately — check your specific plan’s Electricity Facts Label (EFL).
Minimum Usage Fee (if applicable)
Only on months below the plan’s usage thresholdBilled by: Your retail electricity provider
A flat penalty, often $9.95 or similar, charged if your monthly usage falls under a threshold (commonly 1,000 kWh) on plans that build a bill credit or gimmick low rate around hitting that threshold.
A Worked Example
Say you're on a 12¢/kWh fixed-rate plan in the CenterPoint (Houston) service area and use 1,200 kWh in a hot August month. Here's roughly how that splits out, using CenterPoint's hypothetical delivery charges of $4.99/month plus 4.99¢/kWh:
| Line Item | Calculation | Amount |
|---|---|---|
| Energy charge | 1,200 kWh × 12¢ | $144.00 |
| TDU delivery (base) | Fixed monthly fee | $4.99 |
| TDU delivery (usage) | 1,200 kWh × 4.99¢ | $59.88 |
| Sales tax | Assumes no local sales tax | $0.00 |
| Total | $208.87 |
Illustrative example only, not a live quote. Your actual bill depends on your specific plan, provider fees, local taxes, and TDU area — use the comparison tool below for current rates at your ZIP code.
Why Bills Climb in Summer (Even on a Fixed Rate)
If you're on a fixed-rate plan, your per-kWh price cannot change — but your bill can still jump sharply from June through September. That's because both the energy charge and the TDU delivery charge are billed per kWh used, and Texas air conditioning load can easily double or triple a household's consumption compared to a mild spring month.
A household using 700 kWh in April and 1,900 kWh in August at the same 12¢ rate goes from an $84 energy charge to a $228 energy charge — not because the rate changed, but because usage did. See our guide to reducing usage for ways to bring that number down without changing plans.
Reading Your Electricity Facts Label (EFL)
Before you enroll in any plan, the EFL is the standardized, one-page disclosure that shows you the real price — not just the headline rate in an ad. Look for:
- Price at 500 / 1,000 / 2,000 kWh: the all-in rate (energy + delivery) at three usage levels — a plan can look cheap at one level and expensive at another
- Contract term: how long you're locked in on a fixed-rate plan
- Early termination fee: the penalty for canceling before the term ends
- Minimum usage fee: whether a low-usage month triggers a flat penalty
- Renewable content: the percentage of the plan's power sourced from renewables
The EFL is required by the Public Utility Commission of Texas for every residential plan, so you can compare it directly across providers — it's a more reliable comparison tool than the marketing rate alone.
See the Real All-In Cost for Your Address
Enter your ZIP code to compare plans with energy charge and TDU delivery already combined into one all-in rate — no separate math required.
Compare rates. Save hundreds.
Frequently Asked Questions
What are the main charges on a Texas electricity bill?
A Texas electric bill combines two main pieces: the energy charge from your retail electricity provider (the per-kWh rate you shopped for) and the TDU delivery charge from your local utility (a fixed monthly base fee plus a per-kWh delivery rate, the same for every provider in your area). Most bills also show a base or customer charge and, for some providers, plan-specific fees like minimum usage charges.
Do Texans pay sales tax on electricity?
Residential electricity is exempt from Texas state sales tax. Local sales tax may still apply, depending on your service address.
Why did my electric bill go up so much this month?
The most common reason is usage, not rate. Air conditioning during Texas summers can double or triple a household's kWh consumption compared to spring or fall, and since most charges on your bill scale with kWh used, a hotter month produces a proportionally higher bill even on a fixed-rate plan where your per-kWh price never changed.
Can my electricity provider charge me more than my contracted rate?
Not for the energy charge, if you're on a fixed-rate plan — that per-kWh price is locked for your contract term. Your total bill can still rise, though, because it is usage times rate, and because pass-through TDU delivery rates and any plan-specific fees (like minimum usage fees on some low-usage months) are separate from the locked energy rate.