May 26, 2007 admin

Transmission and Distribution Service Provider Charges

Transmission and Distribution Service Provider Charges (TDSP)

Texas electricity consumers often go out and receive quotes from several retail electric providers and notice that there is an additional charge that is not quoted with the energy rate. The TDSP charges or what are sometimes known as pass thru charges are left off of the rate. This can appear a little shady as if the energy supplier is purposefully trying to make their electric rate look better then it actually is.

TDSP charges are not your electric rate?

What is actually going on when the electricity provider leaves the TDSP charges from the energy quote? They are not trying to trick the customer. Texas deregulated the energy market in Texas back in 2002 and when they did this they unbundled the energy rate. The energy provider prior to 2002 was also the pole and wires company. That means the TDSP charges and energy rate were owned and charged by one company prior to 2002. When deregulation occurred the Texas government with the oversight of the Public Utility Commission split up the former monopolies such as TXU Energy, First Choice Power, Reliant and others and created seperate companies. Now you have over 40 Retail Electric Providers to choose from and only a few pole and wires companies. In fact for your region you only have one choice for who you pay your TDSP charges to. In the Dallas area you would pay TXU now known as Oncor http://www.oncorgroup.com. This TDSP charge will show up on your energy bill the same regardless of which Retail Electric Provider you choose. This TDSP charge is simply past on to you from Oncor directly to your energy bill. The TDSP charge can be anywhere from 1 – 8 cents a kilowatt hour and sometimes more. In order to find out exactly how much you pay the pole and wires company you would need to call them and ask for your historical usage. This data will show you exactly how much you pay in TDSP charges for each month along with the corresponding kwh usage for the month.

Electric Providers are showing several different estimates for my TDSP charges

The reason electric providers are giving you an energy quote with an estimate that is not the same as another providers estimate is because they can only guess as to what exactly you may pay for next year. The TDSP charges are figured based on a Public Utility Commission of Texas Rule that is complex and changing. The TDSP charge also changes based on the amount of usage used. Because of these variables you may see several different Transmission and Distribution estimates. The important thing to remember is that these are not quotes but only a helpful estimate to consider so you will know what the total charges would look like. In the end you will pay the same TDSP charges regardless of which electricity provider you choose. Note: It is still not illegal for Texas electricity providers to secretly mark up the TDSP charges with their profit margin and hide this fact in the fine details of the contract. Electricity Bid does not work with any Texas electric companies that do this practice although they are still out there.

For more information about these charges please speak to a Texas energy consultant to learn more. You can speak with a consultant from Electricity Bid by calling 1-800-971-4020

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About the Author

admin Donny started ElectricityBid.com back in 2007 from his parents basement and has since married his wife Melody and had three sons, John Adam (7) and Noah (4) and our new 20 month old son. He enjoys tech related things, softball, kickboxing, going to the gym, excursions and activities together with his wife Melody. Our service allows you to shop and compare commercial and residential electric rates and providers. Would you take the time today to try our service and see how you like it. Thank you! and God Bless You!

Comments (12)

  1. Are you familiar with how different Utilities handle T&D charges after the installation of solar systems such as

    – if T&D is charged for PV power that is beck fed onto the grid and
    – if the T&D charges for the power that are removed from the bill via Net metering are somehow recouped?

  2. Diane

    I've notices this particular charge under TDSP Charges. Its called "OUT OF CY SWITCH SPEC RD" any idea what this could be, it's a flat rate and never changes.

  3. tx4life

    I’ve heard that Reliant doesn’t charge the customer all of their TDSP charges. For example Reliant will fix the demand rate and the energy charge. Are you aware of this?
    Thanks!

  4. Janet Baucom

    StarTex left out this information and this SHOULD NOT BE LEGAL:
    Again, corporations are protected, and US citizens are not!

    Last July I requested information from a salesman from StarTex at a Food Service exposition in Dallas, TX. I told him I was very dissatisfied with the high rate at which my current energy company charged me just 1 month after a fixed rate guarantee had ended with them. I also told him I wanted to know if they had special rates for little businesses and he told me they did. The rate was at .0914 which seemed very reasonable. Additionally, I requested if there were any additional charges. He told me just a 7.99 service fee charge each month and also sales tax. NEVER did he mention the Texas Utility Commission charge which is added each month at the sum of about $180.00 – and this is not dependent on kw usage, only on supposed electric surges used to power appliances in the home and bakery. This fee was not mentioned and prior to switching to their company under a corporate account, I never had such a fee. It is robbery! Although they claim it is not, because this is a pass through fee that goes directly to the Texas Utility Commission. Even if they do not keep the money, they charge me for it every month and it is included in my utility bill. I found out that it is legal for them to not tell you about this fee even though it is deceitful (see this website for further details about our government giving them the right to lie to consumers prior to purchasing their service: http://www.electricitybid.com/electricity/index.p

    When I asked today how much it would cost for me to discontinue this 2 year contract with them, the service woman told me over $1,000. Again, if my service was regarded as a residential account the break in contract would amount to no more than 200 – and many only cost 100. The electric company should have never ordered my service as a corporate account without letting me know the full impact of such a switch. In fact, perhaps larger corporations get much larger kw usage charges and the fees may even themselves out, but for me it has amounted to so much it is devastating to me.

    They took advantage of me, a small business owner, and delight in the fact that they were not legally bound to be up front to me about the exorbitant $180 monthly fee that adds no value to the service, and though it doesn’t add to their bottom line, they did not disclose this fee for a reason. Perhaps they get some sort of reward from the TUC (Texas Utility Commission) for signing up new corporate accounts. There must be some financial reason that this trickery is done.

    If you know of other people with the same issue, I would appreciate getting in contact with them so that we may proceed with a class action law suit against StarTex and the TUC.

    I would appreciate you not backing up their deceitful, unethical procedures in luring small business owners into 2 year contracts with exorbitantly high hidden fees that are approved and encouraged by TUC. I am so very angered.

    Thanks for your time.

    Sincerely,

    Janet Baucom

    • Tori Pablo

      This very issue with StarTex is why I’m researching this charge at 4am. I just recvd my second bill with them and this charge is $160 and my usage is $161! This is ridiculous! My small business elec bill w/ direct Energy started going up after I was outside of my 2 year contract so I started shopping for other plans. I was contacted by a rep at StarTex who told me the exact same thing that was told to you. I was doing better with my variable rate. I never noticed this fee from DirectEnergy…it may have been there but not significant enough to bring about notice.

    • SANDRA

      Hi, I live in texas and have a small business, This has happened to me on about 3 different occasions. I only use about 30 dollars of energy and the distribution charge is about $100 to $200 a month extra just depending on them. They really do not tell you what this extra charge is for. Very disappointed in this system.

  5. PUC of Texas should

    If PUC of Texas requires these additional fees to be collected on certain accounts, they should make it legally binding that all energy companies make clear to consumers these added fees, even if the electric company does not profit from the fees and "passes thru" to the Public Utility Commission. It is not fair that people are not properly forewarned.

    • I believe the PUCT made it mandatory this year that advertisements must bundle all fees and charges including TDSP charges. I would complain to the PUCT after you are done complaining to the electric provider that you were advertised a rate that did not bundle in the TDSP charges which made the rate look misleading.

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