How to Read Your Texas Power Bill (Step-by-Step Guide)

Since Texas deregulated its electricity market, more than 40 providers now compete with hundreds of plans. On paper, that sounds like savings, but only if you know how to read your bill. Each plan is packed with fine print, including base fees, delivery charges, bill credits, and thresholds that can significantly differ from the advertised rate.

When you understand what’s really on your bill, you can spot when a plan’s structure is working against you. Perhaps you simply missed a usage credit, or you’re paying extra for a variable price plan that increased this month. Those little details are where money gets lost.

A Texas electricity bill is made up of several key sections that help you understand what you’re being charged for and why. The way these sections are presented on a bill differs from company to company. These key sections include:

1. Account Information: This section includes your account number, the amount due for the current billing cycle, and your payment due date.
2. Account Summary: The account summary outlines your current balance and details all current charges, including taxes and TDU (Transmission and Distribution Utility) fees. It also shows any remaining balance from your last billing cycle and, if applicable, a late payment fee.
3. TDU Charges and Taxes: This part of your bill lists delivery charges from your utility company, along with the Public Utility Commission of Texas (PUCT) assessment fee and any related taxes.
4. Meter Reading Information: Your electric meter tracks how much energy your home uses during the billing period. This section displays your total kWh usage, your current and previous meter readings, and can help you spot changes in your energy use over time.
5. Electricity Charges: This section shows how your energy costs are calculated. It lists the total amount of electricity you used during the billing period and applies your plan’s rate per kWh to determine your total charge. It also includes any additional fees.
6. Average Price Paid: This section shows your average price per kWh, including all fees and taxes. It’s the best indicator of your true rate and helps you compare costs from month to month. Not all providers include this section.

Texas Electricity Bill Example

Every Texas electricity bill is unique, but they have the same main components. Below is an example of what a typical electricity bill looks like.

Important Terms to Know on Your Electricity Bill

It’s easy to get confused by the terminology on your electricity bill. Power Wizard’s energy experts have explained the most important words you need to know to understand your electricity bill below.

• Retail Electricity Provider (REP): Your REP is the company you choose to buy your electricity plan from. They set your electricity rate, manage your account, and send you the bill.
• kWh rate: The kilowatt-hour (kWh) rate refers to the amount your REP charges for every kilowatt-hour of energy you consumed. kWh represents the amount of energy used to power a 1,000-watt device for one hour.
• Usage: Your total kWh consumed in a billing cycle.
• TDU, UDC, or TDSP Delivery Charge: This is the fee from your Transmission and Distribution Utility (TDU) to deliver power to your home. It may be listed as a TDU, UDC (Utility Distribution Company ), or TDSP (Transmission and Distribution Service Provider) fee. The TDU maintains the poles, wires, and meters, and this charge is passed directly to you on your bill. Every customer in your area pays the same delivery rate set by the TDU.
• Public Utility Commission of Texas (PUCT): The PUCT regulates Texas electricity providers and utilities. They set rules to ensure fair pricing and handle complaints if you cannot resolve issues with your REP directly.
• PUC Assessment: The PUCT charges each utility company a fee for every customer address they serve. That cost is passed through to you on your monthly bill.
• Gross Receipts Tax Reimbursement: REPs that operate in certain incorporated cities pay a state tax. Many REPs pass this tax onto customers, and you will see it listed as a Gross Receipts Tax Reimbursement on your bill.
• Bill or Usage Credit: Some plans offer credits if you hit specific usage levels, such as 1,000 kWh in a billing cycle. These credits can lower your bill, but if you miss the threshold, your cost may be higher than expected. Always check your plan’s Electricity Facts Label (EFL) to see if usage credits apply.
• ESID Number: Your Electric Service Identifier (ESID) number is a unique 17- or 22-digit number assigned to every address in Texas with electric service. It’s used to identify your property’s connection point on the power grid and is needed when setting up, transferring, or comparing electricity plans.
• Expiration Date: The day your current electricity contract ends.
  Service Dates: These indicate the time period during which your electric company calculated your bill. They encompass the day your meter was last read to the next reading.
• Meter Number: The unique ID printed on your electric meter. It connects your energy usage data to your specific account to ensure your billing is accurate.

How it All Fits Together

Your bill combines delivery costs from the TDU and supply charges from your provider. Knowing where each line item lives in your bill helps you understand what’s out of your control (delivery, taxes) and what you can shop around for to save (provider charges, plan type).

Your electricity bill includes multiple charges. Some remain the same from one billing period to the next, while others can change.

What is the Base Charge (Customer Charge) on My Bill?

The base charge, sometimes referred to as a customer charge, is a flat monthly fee from your electricity provider. It doesn’t change with usage. It’s common to see this charge, but not all electricity plans have it.

What is the Energy Charge (Per kWh Rate) and How is it Calculated?

The energy charge is the price per kilowatt-hour (kWh) of electricity you use. Your provider sets this rate based on your plan type. Multiply your total usage by the rate to get the bulk of your supply charges. However, remember that promotions like bill credits can make this number less straightforward than it appears.

What Are TDU Delivery Charges (Oncor, CenterPoint, AEP, TNMP)?

Regardless of who your provider is, TDU (Transmission and Distribution Utility) charges appear on your bill. These rates are set by your local utility to cover the poles, wires, meters, and crews that deliver power to your home. They’re non-negotiable and passed directly through from the TDU to you.

What Taxes and Regulatory Fees Are Included in My Bill?

Every Texas electricity bill includes sales taxes, as well as fees required by the Public Utility Commission of Texas (PUCT). These are mandatory and consistent across all electricity providers.

What Additional Fees Might Appear (Late Fees, Minimum Usage, Early Termination)?

• Depending on your electricity plan, provider, and situation, you may also encounter:
• Late fees if your payment isn’t on time.
• Minimum usage fees if you don’t hit a provider’s monthly kWh threshold.
• Early termination fees (ETF) apply if you cancel your contract before it ends.

Every type of electricity plan has a unique rate structure. This means that the plan you choose has a major impact on your overall energy bill. Here are some of the plans that REPs offer:

• Fixed-rate
• Bill credit
• Time-of-use (free electricity)
• Variable-rate (variable-price)
• Prepaid/No deposit

To see a full breakdown and explanation of these plans check our electricity plan types page available in Texas here.

Contract Terms and Auto-Renewal Traps

Electricity plans in Texas often come with contracts ranging from monthly to 60 months. What happens at the end of your contract depends on the plan you signed. Some providers include language that moves you to a month-to-month variable plan if you don’t take action. Others may offer renewal options or even automatically enroll you in another fixed-rate plan.

The tricky part is that these details often appear in the fine print, and missing them can result in paying much higher rates than you expected. You can always check your electricity bill, call your energy provider, or login to your electricity account to find when your contract ends.

With so many electricity options, it’s easy to get tripped up by the fine print or overlook simple habits that drive costs up. Here are some of the most common mistakes Texans make when it comes to their electricity bills:

• Forgetting contract end dates: Letting your plan expire without switching can lead to auto-renewals or higher rates.
• Choosing the wrong plan type: A plan that looks cheap up front may come with tiered usage thresholds or time-of-use limits that don’t fit your household.
• Ignoring TDU delivery charges: These rates are fixed by your local utility, and not accounting for them can make your “low rate” plan more expensive than expected.
• Overlooking energy efficiency: Poor insulation, outdated appliances, and vampire energy from plugged-in electronics add unnecessary costs.
• Not reviewing the EFL: Skipping the fine print means you might miss key details like bill credits, base fees, or minimum usage requirements.
• Misunderstanding Time-of-Use Plans: These electricity plans advertise free usage periods, but they are not completely free. You will still be charged TDU delivery fees for energy used during these timeframes.

When your bill suddenly spikes, it’s easy to blame “using too much power.” But there are often hidden factors driving your costs higher. Here’s what you need to watch for:

• Expired fixed-rate plan – When your contract ends, your provider may move you to a different plan with higher rates if you don’t renew or switch.
• Extreme weather – summer heatwaves and winter freezes push HVAC systems into overdrive, which can increase energy usage.
• Poor insulation & outdated appliances – Drafty windows, thin insulation, or inefficient appliances waste energy and increase bills.
• Estimated billing or meter issues – If your provider estimates usage or your meter is faulty, your charges may not reflect actual consumption.

Infographic: “Top 5 Reasons Bills Spike in Texas” with icons for HVAC, weather, contract expiration, insulation, estimated billing

Cutting your bill doesn’t have to mean sweating through the summer or freezing in the winter. With the right strategies, you can keep your home comfortable while keeping costs under control:

• Switch to a new electricity plan when your contract expires – It’s always a good idea to start shopping early to find the best electricity rate for your needs and we always recommend comparing plans before your contract expires. You can lock in a new rate up to 60 days in advance (and sometimes even earlier with certain providers) and schedule your service to switch over within the final 15 (I think this is 14?) days of your current term. Before making a final decision, always check the policy for Early Termination Fees (ETFs).
• Reduce usage smartly with thermostats and peak-hour adjustments – A programmable or smart thermostat can trim costs by adjusting temps while you’re away. Shifting energy-heavy tasks (like laundry or dishwashing) outside of peak hours also helps.
• Invest in energy-efficient appliances and insulation upgrades – Upgrading to ENERGY STAR® appliances and improving insulation means your system doesn’t have to work as hard, saving energy long-term.
• Tackle vampire energy – Unplug electronics or use smart power strips to stop devices from drawing power even when they’re turned off.

Ready to find the right electricity plan for your Texas home? Plug your ZIP code into Power Wizard’s smart comparison tool to view your options side by side!

Interactive Tool: Link to PowerWizard zipcode rate comparison tool