Texas TDU Delivery Charges for Businesses: The 2026 Guide

Every commercial electricity bill in Texas is really two bills stacked together. One half — the energy or supply charge — is competitive: you can shop it, negotiate it, and switch providers to lower it. The other half — the TDU delivery charge — is regulated, non-negotiable, and identical no matter which retail provider you sign with. For many Texas businesses the delivery side is 40% or more of the total bill, and in 2026 it went up. This guide explains what those charges are, which utility bills them in your area, and what rising delivery costs mean for how you buy power.

What a TDU Is — and Why You Can't Shop It

In the deregulated Texas market, two different companies touch your electricity. Your retail electric provider (REP) sells you the electricity and manages your contract. Your Transmission and Distribution Utility (TDU) — sometimes called the TDSP — owns the physical poles, wires, substations, and meters that carry that electricity to your building, and handles outage response. You choose your REP. You do not choose your TDU; it is determined by your address.

Because the TDU is a regulated monopoly on the wires, its charges are not set by the market. They are tariffs approved by the Public Utility Commission of Texas (PUCT), and every REP passes them through to you at exactly the same rate. That is the single most important fact about delivery charges: a REP cannot give you a better delivery rate, only a better supply rate. Anyone claiming otherwise is repackaging the same regulated number. For the full line-by-line picture, see our guide to reading a commercial electricity bill.

The Five TDUs That Serve Texas Businesses

Which utility delivers your power — and therefore which tariff you pay — depends entirely on where your meters sit. Five regulated delivery utilities cover the competitive Texas market.

CenterPoint Energy — Greater Houston & the Gulf Coast

CenterPoint delivers electricity to more than 2.8 million meters across the Houston region, making it the second-largest TDU in Texas. Its territory covers Houston, Baytown, Galveston, Pasadena, and most of the Gulf Coast. CenterPoint's summer-peaking commercial demand charges are among the most consequential line items for Houston-area businesses.

Oncor — Dallas–Fort Worth & North/West Texas

Oncor is the largest delivery utility in the state, serving Dallas, Fort Worth, and much of North, Central, and West Texas including Midland and Odessa. Because Oncor covers so much territory, its rate cases move the delivery cost for a huge share of Texas commercial accounts — as they did in 2026 (below).

AEP Texas — Coastal Bend, Rio Grande Valley & West Texas

AEP Texas, the former Central Power & Light, serves about a million homes and businesses through two divisions. AEP Texas Central covers South Texas — Corpus Christi, McAllen and the Rio Grande Valley, and Victoria — while AEP Texas North covers West Texas around Abilene and San Angelo. Note that many rural counties in these regions are served by electric cooperatives that are not part of retail choice.

Texas-New Mexico Power (TNMP) — Gulf Coast Pockets & Beyond

TNMP serves roughly 139,000 meters, including a distinct Gulf Coast footprint that covers Texas City, League City, Friendswood, Dickinson, La Marque, Angleton, and West Columbia, plus service areas in North and West Texas. Several Gulf Coast cities straddle the TNMP and CenterPoint boundary, so the delivery utility can differ block to block — we confirm yours by ESID before quoting.

Lubbock Power & Light (LP&L) — the City of Lubbock

LP&L is the newest TDU in the competitive market. In December 2023 Lubbock completed its move into the ERCOT grid, and retail competition opened in early 2024. LP&L still owns the wires and bills the delivery charge, but Lubbock businesses can now choose their REP for the first time. Rural areas around the city remain on South Plains Electric Cooperative, which is not part of retail choice.

What's Actually on the Delivery Side of Your Bill

TDU delivery charges are not a single number. They bundle several regulated components, and the mix matters more for a commercial account than for a home:

• Customer or metering charge — a flat monthly fee for the meter and account.
• Per-kWh delivery charge — a volumetric charge for every kilowatt-hour that moves across the distribution system.
• Demand charge (per kW) — the big one for commercial accounts. The TDU bills your peak demand during the billing period, so a single spike can raise the charge for the whole month.
• Transmission charges — the cost of the high-voltage system that moves power from generators to your local area, often tied to your demand.
• Riders and surcharges — cost-recovery factors for grid investment, storm restoration, and state programs, which shift as the PUCT approves them.

Because the demand component is so large, two businesses using the same total kWh can pay very different delivery charges depending on how peaky their load is. That is why load factor and demand management are central to controlling the delivery half of your bill.

The 2026 Increases: When Delivery Charges Change

Delivery rates are not static. Texas TDUs recover the cost of building and maintaining the grid through periodic filings — interim cost-recovery riders and full base-rate cases — that the PUCT reviews and approves before they take effect. In a state where ERCOT is forecasting steep demand growth from data centers and electrification, that recovery is accelerating.

The June 1, 2026 increase. On April 17, 2026 the PUCT approved the final order in Oncor's comprehensive base-rate review, and new Oncor delivery rates took effect June 1, 2026 — up roughly 7–8%, the highest per-kWh delivery charge in Oncor's history, and applied retroactive to January 1, 2026 (so some accounts saw a catch-up surcharge). CenterPoint customers saw their own PUCT-approved delivery-charge update take effect the same day, up about 3%. Source: Oncor rate review (PUCT final order, April 17, 2026).

And more is coming. Oncor's 2025–2029 capital plan — about $36.1 billion, the largest in the company's history — is recovered through delivery rates, and every major Texas TDU files periodic tracker updates the PUCT reviews. Businesses should expect delivery charges to keep climbing through the rest of the decade. For the exact per-kWh and per-kW figures for your rate class, always confirm against your TDU's current PUCT-approved tariff rather than a headline percentage; independent trackers such as the commercial TDU delivery-rate tables are a useful starting point.

What Rising Delivery Charges Mean for Your Business

Here is the strategic takeaway. Delivery is the half of your bill you cannot shop, and it is going up. That does not leave you powerless — it changes where your leverage is:

• Shop the half you control. As delivery rises, the supply rate becomes the only negotiable lever on the commodity side. Locking a competitive rate — and timing it against the ERCOT wholesale market — protects the part of the bill you can actually move.
• Attack demand. Since the delivery charge is demand-weighted, cutting your peak kW can lower delivery cost without changing how much energy you use. Our guide to lowering commercial electricity bills covers the tactics.
• Read the all-in number. Never compare REPs on the energy rate alone. Divide your total bill by total kWh to get the effective all-in cost, delivery included — that is the only apples-to-apples comparison.

Frequently Asked Questions

Can I lower my TDU delivery charge?

Not directly — TDU delivery charges are regulated tariffs set by the PUCT, and they are identical no matter which REP you use. What you can control is the demand-driven portion: because much of a commercial delivery bill is a per-kW demand charge, cutting your peak demand through load management lowers what you pay on the delivery side, and shopping your supply rate lowers the half of the bill you can negotiate.

Why did my Texas delivery charge go up in 2026?

Texas TDUs recover the cost of building and maintaining the grid through delivery rates the PUCT reviews and adjusts periodically. On June 1, 2026 both Oncor and CenterPoint raised delivery charges under PUCT-approved updates — Oncor by roughly 7–8% following the final order in its comprehensive base-rate review, and CenterPoint by about 3%. With billions in grid investment still being recovered, further adjustments are expected.

What is the difference between the delivery charge and the supply charge?

Your bill has two halves. The supply (or energy) charge is what you pay a competitive REP for the electricity itself — the part you can shop and negotiate. The delivery charge is what the TDU charges to move that electricity over its poles and wires to your meter — regulated, passed through by your REP, and the same regardless of supplier.

Which TDU serves my Texas business?

It depends on your address, not your choice. CenterPoint serves greater Houston and the Gulf Coast; Oncor serves Dallas–Fort Worth and much of North and West Texas; AEP Texas serves the Coastal Bend, Rio Grande Valley, and parts of West Texas; TNMP serves pockets of the Gulf Coast and elsewhere; and LP&L serves the city of Lubbock. Some rural areas are served by cooperatives that are not part of retail choice, so we confirm your delivery utility by ESID before quoting.

Are TDU delivery charges the same for every REP?

Yes. Because delivery charges are regulated pass-through tariffs, every REP bills the exact same TDU charges for a given rate class and territory. A REP that advertises a lower delivery charge is either bundling it differently or being misleading — the underlying tariff is fixed by the PUCT. This is why comparing only the headline energy rate can be deceptive; the all-in cost per kWh is what matters.