Understanding Your Texas Commercial Electricity Bill, Line by Line
Every line on a Texas commercial electricity bill is either negotiable, manageable, or a mistake. A plain-English guide to supply, TDSP delivery, demand charges, riders and taxes — and which is which.
Most commercial electricity bills in Texas are designed to be paid, not understood. But every line on that bill is either negotiable, manageable, or a mistake — and you can't tell which until you can read it. Here's what each part means.
The two halves: supply and delivery
Every deregulated-Texas bill splits in two:
- Supply — the energy itself, from your Retail Electric Provider (REP). This is the rate you shop and negotiate.
- Delivery (TDSP) — the regulated cost of moving that energy across the wires, billed by your utility (Oncor, CenterPoint, AEP, TNMP) and set by the PUCT. Not negotiable — but it can be billed wrong.
Knowing which half a charge belongs to tells you whether to negotiate it, manage it, or audit it.
On the supply side
- Energy charge (¢/kWh) — your contracted rate times your usage. The headline number a broker quotes.
- Base or monthly charge — a flat fee per meter.
On the delivery (TDSP) side
- Delivery / distribution charge — the per-kWh cost of the wires.
- Demand charge (per kW) — billed on your highest 15-minute peak, not total usage. On larger meters this is often the biggest single line. (See demand charge management.)
- Customer / metering charge — fixed per-meter costs.
- Riders and pass-throughs — transmission cost recovery and other regulated adders.
Taxes and other line items
- Gross receipts and state/local taxes — applied by jurisdiction.
- Sales tax — unless your business holds a valid exemption (Texas manufacturers often qualify under predominant-use rules).
The three questions to ask every line
- Is it supply? Then it's negotiable — is your rate competitive?
- Is it a demand charge? Then it's manageable — is anyone watching your peak?
- Is it delivery/TDSP? Then it's regulated — but is it correct (right rate class, right multiplier, right riders)?
That last question is where money hides. Our guide on auditing your bills for hidden TDSP fees goes deeper.
Don't want to decode it yourself?
Send one recent bill and UPG will read every line for you, free — supply rate, demand charges, TDSP delivery and any error in between — and hand you a written summary. That's the Energy Health Check. See how we work with commercial real estate, or start yours here. For any term you don't recognize, our energy glossary has it.
Understanding Your Texas Commercial Electricity Bill, Line by Line — quick questions
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Ready to take control of your energy costs?
Send one recent bill and a UPG advisor will run your free Energy Health Check — TDSP fees, contract terms, renewal windows — with a written summary back to you.