How to Read Your Commercial Electricity Bill in Texas

A commercial electricity bill in Texas is not designed to be intuitive. Between TDU delivery charges, REP energy charges, demand fees, pass-throughs, and regulatory line items, even experienced business owners struggle to understand where their money is going. And if you cannot read your bill, you cannot evaluate whether you are overpaying.

This guide walks through every section of a typical Texas commercial electricity bill, explains what each charge means, and shows you which numbers actually matter when you are comparing rates or negotiating a new contract.

The Two Bills on Your Bill

The first thing to understand is that your commercial electricity bill in a deregulated area is actually two sets of charges combined into one statement:

• Energy supply charges — from your REP (Retail Electricity Provider). This is the company you chose and signed a contract with. These charges cover the actual electricity you consumed.
• Delivery charges — from your TDU (Transmission and Distribution Utility). This is the company that owns the wires and poles — CenterPoint in Houston, Oncor in Dallas, etc. These charges cover getting the electricity to your building.

Most commercial bills consolidate both into a single statement from your REP, but the charges come from two different companies. This distinction matters because you can shop and negotiate your REP charges, but TDU charges are regulated and the same regardless of which REP you use.

Section 1: Account and Meter Information

The top of your bill typically shows:

• Account number — Your unique identifier with the REP.
• ESI ID (Electric Service Identifier) — A 17- or 22-digit number that identifies your specific meter and service point on the ERCOT grid. This is the number that matters when switching REPs or getting quotes. Every meter has a unique ESI ID.
• Meter number — The physical meter identifier at your location.
• Billing period — The date range the bill covers (typically 28-32 days).
• Service address — The physical location being served.

Why this matters: When you request quotes from other REPs or from a broker, they need your ESI ID and recent usage history. Having this information ready speeds up the process significantly.

Section 2: Energy Supply Charges (REP Charges)

This is the portion you can negotiate. Common line items include:

Energy Charge

The core charge — your per-kWh rate multiplied by total consumption. If your rate is $0.075/kWh and you used 45,000 kWh, this line item is $3,375. On a fixed-rate plan, this rate stays constant. On an index plan, it varies with the wholesale market.

Base Charge or Customer Charge

A flat monthly fee ($5-$25 for most commercial accounts) that covers administrative costs. This is charged regardless of how much electricity you use.

REP Demand Charge (if applicable)

Some REPs include a demand component on the supply side. This is separate from the TDU demand charge. It is typically a per-kW rate applied to your peak demand. Not all plans have this — it depends on your contract structure and rate class.

Renewable Energy Credit or Green-e Charge

If you are on a renewable energy plan, this line item covers the cost of the renewable energy certificates associated with your usage. It is usually a small per-kWh adder ($0.001-$0.005/kWh).

Section 3: TDU Delivery Charges

These charges are regulated and passed through by your REP. They are the same regardless of which REP you use. Common TDU line items:

Metering Charge

A flat monthly fee for maintaining your meter. For commercial interval (demand) meters, this is typically $3-$10/month.

TDU Delivery Charge (per kWh)

A per-kWh charge for using the distribution system. In the CenterPoint service area (Houston), this is roughly $0.03-$0.04/kWh as of 2026, though it varies by rate class. This charge often surprises business owners because it adds significantly to the total per-kWh cost beyond what the REP charges.

TDU Demand Charge

This is the big one for commercial accounts. The TDU charges a per-kW rate based on your peak demand during the billing period. For CenterPoint commercial customers, demand charges can range from $3-$12+ per kW depending on your rate class and voltage level. If your peak demand was 200 kW at $8/kW, that is $1,600 — just for the delivery demand charge alone.

Transmission Charges

Separate from distribution, these charges cover the high-voltage transmission system that moves electricity from power plants to your local area. Transmission charges are typically calculated per kW of demand and per kWh of usage.

System Benefit Fund

A state-mandated charge (about $0.00065/kWh) that funds low-income energy assistance programs, customer education, and other public benefit programs.

Transition Charges or Competition Transition Charges

Legacy charges from the deregulation transition that allowed utilities to recover "stranded costs" — investments made before deregulation that could not be recovered in a competitive market. These are being phased out but still appear on some bills.

Section 4: Taxes and Regulatory Fees

The final section typically includes:

• State sales tax — Texas charges sales tax on electricity for commercial use. The tax applies to both energy supply and delivery charges.
• City franchise fee — A fee paid by the TDU to the city for the right to use public rights-of-way for power lines. This is passed through to customers and varies by municipality (typically 2-5% of delivery charges).
• PUC assessment — A small charge to fund the Public Utility Commission of Texas operations.

The Numbers That Actually Matter

When you are comparing plans or evaluating whether you are getting a good deal, focus on these metrics:

All-In Cost Per kWh

Take your total bill amount and divide by your total kWh consumed. This gives you the effective rate you are actually paying, including all charges — not just the headline energy rate. A REP advertising $0.065/kWh might result in an all-in cost of $0.11/kWh once TDU charges, demand charges, and fees are included.

Demand Charge as Percentage of Total Bill

Add up all demand-related charges (both REP and TDU demand charges) and compare to your total bill. If demand charges are more than 40% of your bill, focusing on demand management will likely save you more than negotiating a lower per-kWh rate.

Energy Charge vs. Delivery Charge Ratio

Understanding how much of your bill is supply (negotiable) vs. delivery (fixed) tells you how much room you have to save by switching REPs. If delivery is 60% of your bill, even a significant reduction in your energy rate only affects 40% of the total. Choosing the right rate structure can make the difference. For more tips, see our guide to lowering commercial electricity bills.

Red Flags to Watch For

When reviewing your bill, watch for these warning signs:

• Month-to-month or holdover rate. If your contract expired and you did not sign a new one, you are likely on a holdover rate that can be 50-200% higher than a contracted rate. Check your bill for language like "month-to-month," "variable default," or "holdover" pricing.
• Unexplained rate increase mid-contract. On a fixed-rate contract, your per-kWh energy charge should not change. If it does, check whether you have a pass-through clause that allows the REP to pass on certain market costs above your base rate.
• Demand spikes without a clear cause. If your billed demand jumped significantly compared to previous months, investigate what caused the peak. A malfunctioning HVAC compressor, a power outage followed by everything restarting simultaneously, or a new piece of equipment can create one-time demand spikes that inflate your bill for the entire month.
• Estimated reads. If the bill says "estimated" rather than "actual," the TDU could not read your meter that month. Estimated bills can be significantly higher or lower than actual usage. If you see multiple estimated reads in a row, contact your REP to request an actual meter read.

What to Do Next

Pull out your most recent commercial electricity bill and walk through it section by section using this guide. Identify your all-in cost per kWh, your demand charges as a percentage of total bill, and your contract end date. These three numbers tell you whether you are in a good position or whether it is time to start shopping.

If the numbers do not look right — or if you cannot make sense of what you are seeing — that is exactly what a broker is for. We look at commercial electricity bills every day and can quickly identify whether you are overpaying and where the savings opportunities are.