How to Read Your Texas Electricity Bill (And Spot Hidden Fees)

If you've ever stared at your Texas electricity bill and thought "wait, I thought my rate was 12 cents per kWh — why am I paying 16?" — you're not crazy. Retailers deliberately obscure the real price per kilowatt-hour behind a wall of line items, base charges, TDU pass-throughs, and bill credit thresholds. This guide walks through every section on a typical Texas bill and tells you exactly what each one means, whether it's negotiable, and how to spot the charges that flag a bad plan.

The 3 numbers that actually matter

Forget the 20-line itemization for a second. On every Texas electricity bill, only three numbers matter for deciding whether your plan is competitive: your total usage in kWh, your total dollar amount, and your billing period in days. Divide total dollars by total kWh and you get your effective rate — the real price you're paying per kilowatt-hour, including every fee and credit. This is the number to compare against other plans. Everything else is noise.

Line-by-line: what every charge means

1. Energy charge

This is the raw rate per kWh your retailer charges — the number they advertise on Power to Choose. Sounds simple, but many retailers use a tiered structure where you pay different rates depending on usage bucket (e.g. 9.5¢ for the first 500 kWh, 12¢ for the next 500, 10¢ above 1,000). The advertised rate is almost always the cheapest bucket, not a weighted average. Always check the Electricity Facts Label (EFL) for the full tier structure.

2. Base charge (or "monthly customer charge")

A flat monthly fee charged no matter how much electricity you use. Typically $4.95 to $9.95. For low-usage households (under 600 kWh/month), this base charge can add 1-2¢/kWh to your effective rate all on its own. Most "cheapest advertised rate" plans have high base charges precisely because they only look cheap at exactly 1,000 or 2,000 kWh — below that threshold, the base charge wrecks the math.

3. TDU delivery charges

TDU stands for Transmission and Distribution Utility — the company that owns the poles, wires, and meters delivering electricity to your home. In Texas that's Oncor (Dallas/Fort Worth), CenterPoint (Houston), AEP Texas (Corpus Christi / Valley / Abilene), or TNMP (scattered areas). These charges are identical for every retailer in a given area — you cannot shop for a cheaper TDU. Any retailer advertising "no TDU fees" is either lying or bundling them invisibly into a higher base rate.

4. Bill credits

A flat dollar credit applied ONLY when your monthly usage hits a specific threshold — typically 1,000 or 2,000 kWh. Miss by a single kWh and the credit disappears. This is the single most common trap in Texas electricity. Retailers advertise 9¢ rates that only become 9¢ if you hit exactly 1,000 kWh; if you use 995 kWh your effective rate is suddenly 14¢. Voltcheckr flags bill credit plans by default and only recommends them when your usage is consistently above the threshold.

5. Sales tax + state charges

Texas charges 6.25% state sales tax on electricity for non-residential customers and most cities add 1-2% more. If you see a "PUC assessment fee" or "gross receipts reimbursement" — those are legitimate state-mandated pass-throughs. Not negotiable, identical across retailers.

Red flags to watch for

• •Advertised rate is much lower than your actual effective rate (usually means a missed bill credit threshold).
• •Line labeled "minimum usage fee" — you're being charged EXTRA for using less than 1,000 kWh.
• •A surprise "contract reconnect fee" or "plan change fee" — these suggest a retailer that profits from churn friction.
• •Effective rate changes more than 2¢ month-to-month on a "fixed" plan — it's not really fixed, or the bill credit is whipsawing you.
• •The rate quoted on the Electricity Facts Label for your actual usage is higher than what you saw advertised on Power to Choose.

What to do next

Grab your most recent bill, find your total kWh and total dollars, divide to get your effective rate, and compare that against 200+ Texas plans at your exact usage level. If you're paying more than 13¢/kWh in 2026, you're almost certainly on a bad plan — switching is free, takes about 30 seconds, and your new provider handles the cancellation of your old plan automatically.