June 5, 2009 admin

TDSP Pole and Wires Charges, Have You Been Scammed?

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Comparing Texas Electricity Rates in a Clear Apples to Apples Comparison Chart

Read the article below about deceptive trade practices regarding advertising a low Texas residential electric rate that does not include all charges such as TDSP charges, pole charges, and pass through charges. After your done reading come back here to this residential electric rate comparison chart that shows all charges in a total bundled rate in a clear apples to apples comparison. You can be confident that the rate you sign up on will be a total bundled electric rate with no surprise charges.

What is at The Root of the Confusion Involving Unbundled Residential Electric Rates?

In Texas you have commercial electricity rates and you have residential electricity rates. These electric rates and charges are all together different animals. Don’t be confused by assuming one is the other and don’t let a retail electric provider convince you that your wrong about a confusion involving TDSP charges added onto your electric bill. Texas commercial electric rates are usually quoted to a energy consumer as an “unbundled rate”. This means that the quoted commercial electric rate does not have the TDSP charges (pole charges) added into the rate. The reason the charges are not quoted initially when receiving a commercial rate quote is because the electric company does not know what they are for that specific business. TDSP charges are figured based on actual or historical usage and differ from one company to the next.

TDSP charges for commercial businesses are not a fixed charge because they are based on the amount of electricity you use on any given month. The charges are past through by the monopoly utility that owns the poles and wires and so the provider isn’t even in control of what these charges will be but only passes them through on their electric bill to the consumer. A  fitness studio gym might spend on average about 7 cents per kWh for TDSP charges on top of their “energy only” rate. A large chemical or manufacturing plant might spend 1 – 2 cents per kWh on average for TDSP charges. Generally the larger the commercial or industrial business the smaller on average per kWh the TDSP charges will be.

How TDSP Charges Work for Residential Energy Prices

Now lets consider residential electric rates and TDSP charges. Most Texas electric providers will quote you an all in electric rate that includes the TDSP charges in the rate. You may wonder how a residential electric provider can quote the TDSP charges as a part of the electric rate if they vary from one customer to the next? The answer to this question is that most Texas electric companies will bundle the two charges together before ever knowing what the residential energy consumer uses because they know on average what the historical average is for most residential customers. Since most home owners average about 1,300 kWh a month a Texas electric company can fix the TDSP charges and go ahead and bundle those charges in their advertised residential electric rate. Now even though we say that most residential electric companies in Texas bundle these pole and wires charges in their advertised rate does not mean that all do. The fact that not all residential electric companies include the TDSP charges in their rate is the issue many Texas energy consumers are facing and it has defrauded them out of hundreds of dollars.

Why do Residential Electric Service Customers Sign up for Unbundled Energy Service Products?

By signing up for an unbundled electric rate you are kind of flying blind with no real knowledge of what the final rate will be. You are not to blame as you probably had no idea that there would be additional pole and wires charges added on to the rate. The confusion comes in when a Texas residential energy consumer compares electric rates from several electric companies and finds a rate that is much much cheaper than all the other companies they have looked at. The rate says that it is a fixed electric rate and the company seems to be a large company in several states so the customer feels reassured that they are signing up on a legit rate. So lets say that the customer finds a 1 year fixed electric rate at 7 cents a kWh. This sounds amazing right now and is several cents cheaper than all the other electric companies. They wait and get their first months Texas electric bill only to find that the actual rate they are paying is 13 cents a kWh. Somewhere along the way they must have missed something when signing up with the electric company so they call to find out what the problem is. The customer calls and the sales agent tells the customer that their rate is 7 cents a kWh but the “pass through charges” also known as TDSP or pole and wires charges are an additional 3 – 6 cents per kWh on top of the “energy only” rate you agreed to. The funny thing is you were never notified about these additional charges and so you argue towards that direction only to hear the provider say, “We are not the TDSP company and only pass through those charges from the pole and wires company that owns the wires. Our charges are the “energy only” charges which is the rate you agreed to.” So all of the sudden the blame goes to the pole and wires company which is Centerpoint Energy in the Houston area and Oncor Electric Delivery in the Dallas Area. The electric provider even encourages you to call the pole and wire company if you want to complain about the charges.

The Pizza Guy on the Phone Gets You Into a Never Ending Circular Argument

Do you see what the electric provider has done? They have shifted the blame over to the pole and wires company for their misleading advertised electric rate. So even though you were under the impression that your total bundled rate was 7 cents per kWh the electric company is blaming you for not understanding that there was an additional pole and wires charge. If you complain to Johnny Pizza Guy that you were not notified about the charge the Texas energy provider may even shift the blame over to the pole and wires company so they get you off the phone and continue signing up more suckers for their misleading electric rate. Do you really think Johnny who gets paid $9 an hour really cares about your plight over your higher electric rate? He probably doesn’t and needs to keep his calls under 15 minutes so that he keeps his job and the energy provider meets their call center metrics.

You Take the Bait and Call the TDSP Company Which Gets You No Where

So you call the pole and wires company and they are no help at all as they don’t even deal with the retail side of the market. They handle disconnects, turn on’s, move in’s, new construction and such. These TDSP companies do not sell electricity and so when you call complaining that you were charged a very high TDSP charge they direct you back to the retail electric company that did not properly notify you of the charge. So you call the retail electric provider that sold you the misleading residential electric rate and the argument starts all over again. You complain that you were told the rate would be 7 cents per kWh but the bill states the rate is 13 cents per kWh. They explain that “their rate” is 7 cents per kWh but the “TDSP Charges” are 6 cents per kWh and come from a different company. You explain that you just called the TDSP company and they told you to call back your retail electric provider to complain. The electric provider blames the pole and wires company for requesting you call them back and explains again that they only pass through the TDSP charges but have no control over what those charges will be.

Only a Handful of Electric Companies in Texas Advertise an Unbundled Residential Electric Rate

So what is really going on here? There are only a handful of Texas electric companies that do this practice of misleading the customer into an electricity rate that seems several cents cheaper than it really is. If we were to name some of these energy companies in this article we could potentially get into some legal trouble as we have made some rather troubling statements that may not be within the necessary realm of legal accuracy. For the time we will refrain from naming names of exactly which electic companies in Texas participate in offering a rate that only appears low but is really much higher. Instead we encourage any customer that has been defrauded to post a comment with your exact experience in order to warn other consumers to stay away from the electricity providers who practice this slimeball advertising tactic.

Challenge the Electric Company With a Sound Argument About Pole and Wires Charges

If you engage in an argument with a Texas electricity provider that operates in this manner you will go round and round in a circular argument about how their rate is accurate and is the “energy only” rate and that the TDSP charge is something they are not responsible for. You might want to ask this provider, “why do most Texas electric companies go ahead and bundle the TDSP charge into their advertised fixed residential electric rate so that Texas energy consumers know exactly what they will be charged?” Who knows what the pizza guy will tell you on the other side of the phone from here but you get my point. They really won’t have a good answer for you. If you want to compare residential electricity rates that have all fees and charges, TDSP, and pole and wires charges disclosed without the hidden fees and unquoted pass through charges then please use the comparison chart at the top of this page. We have all fees and charges included in the electric rates in the chart and the companies in the comparison chart are reputable quality energy companies to do business with. By comparing Texas electric rates in an apples to apples comparison with multiple other energy providers you can make a clear informed decision and truly go with the cheapest electric provider in Texas. Again we promise you will not experience the surprises that you may have had with a disreputable electric company that did not disclose your TDSP charges in their advertised energy price.

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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 (21)

  1. Ha

    Same thing happened to me with Mega Energy. They charged us $73 TDSP this month. I am planning to file a complaint to PUC. below are the info I found online. I hope we all file complaint to PUC. We can’t allow those companies to do whatever they want to do with us while we can’t do nothing about it!

    Don’t Be Fooled. If an electric company in Texas tries to tell you that the reason your residential fixed electric rate has gone up so much is because of TDSP charge increases you need to quickly write a detailed complaint and send it in along with the electric bill in question via fax to the Public Utility Commission of Texas.

    You can fax your issue to the PUCT at fax number: 512-936-7003


  2. Liz

    I have been having a lot of trouble with Reliant energy in that they keep changing the pass through charges for my business and for what its worth they never even told me about the pass through charges when I called to find out info about electricity for a business. I know that I should of probably investigated more but when your trying to start a business you have so much on your mind. Any how I do not recommend that anyone sign up for anything with RELIANT energy. They do not conduct business properly, they do not explain and worst of all they do not care!

  3. Mark

    I can relate to Liz.. same problem with reliant.. I started my business in 2004…Automotive custom shop..my kw usage has always been 1200+- since day one.. and have signed up for there business plans to save money and commit to there terms..now they expired or no longer available, the thing is one day i get a bill and notice 50 extra bucks for something i was not told about.. centerpoint pass through charge.. And my previous bills had tdsp charge of like no more then 3 to 5 dollars.. and i was cool with that…. but now that charge is gone and centerpoint pass through replaced it.. My bill was between 110 to 130.. never went pass that.. now its 180 220 for some crappy charge.. I called to investigate and im told just like the article says above word for word… They say its a unbundle charges and i say well why is there a extra chare for 40 buck on the pass through charge? SHOULDNT that be taken out of the 110- 130 engergy charge? wtf.. Did I really think that reliant was going to care that i have been a customer for 6 years and they would atleast give a care about small business….now i forced to pay a charge that is someone elses cost of doing business…… its like me charging some one to fix there car and charging them for lunch, drinks and what ever mess i make to fix there car.. that stupid.. Im sure people reading this will relate….. but i just had to speak my mind after reading liz’s comment.. cuz thats how i felt when i was trying to figure out why the utility commission would alow this….

  4. Steve

    My pass thru charge from Center Point has been about $15.00 a month. This month it went over $100.00. I can not get a stright awnser from Reliant, other than the standard company line, ie we don`t control that blaa, blaa….Look out boys the fix is in.

  5. Same here … I use about 500 kwh per month in a part-time business and I have Reliant energy…My kwh rate is .9 cents , however the pass through-charges sometimes appear on my monthly statement from $59.00-$165.00 ! outrageous… And its always a different amount. my energy usage is between $20-$75 month but the additional charges brings my totals over $250… whats up with this ?

  6. cam

    This is EXCATLY what happend to me. I chose YEP ( Youe Energy Provider) energy on a variable plan for about 7.25 cents per kWh. Then when i got my first bill there were huge (about 30% of total bill) charges for “Total Deliver Charges”. When I called, the rep said “that isn;t our fee, it’s ONCOR”. YEP is baout the 5th electric compnay I have used and the ONLY one that did not quote me a bundled number. They are VERY deceiving. DO not use YEP.

  7. Kambiz

    I recently renewed with Reliant energy business service. I was quoted 7.4cents per kwH and pass thorugh for TDSP. My previous plan had a TSDP charge of about 13 dollars /month.My expiring 2 year contract had a 13 cent rate with 10/month fee and TDSP charges of about 13/month. I specifically went line item through my incoice with the sales rep and asked them if TDSP charges would remin about the same.He said they would. Low and behold the charge increased from 13 to $122 dollars.Roughly sme kwh use between the 2 months. The average price comming in at 23.8 cents/kwh. Much higher than the 12.6 cents on the enrgy fact label and 10X higher than the previous tensmission charges. Furthermore they say that Oncor energy has not changed rates since 10/2009. Explain then why my TDSP charge went up. What crooks

  8. almost scammed

    Dynowatt is doing the same thing. They were advertising a much lower rate. I went into a live chat to ask a rep why that was, and asked if there were other fees that would be on the bill. They said your usage*rate, taxes, and transmission and distribution charges. I said what are transmission and distribution charges? They said, those are made by the utility company. Hehe, nice try. I’m glad I avoided Dynowatt, and a potentially large bill with hidden fees.

  9. Rod

    I wish Republicans in power would do something. I had power turned on in a house while I painted and remodeled to fix it up. My electric usage from MX Energy for one day – January 6 to January 7th was fifteen cents. My Pass through charges were $54.00 The next month I used a little over five dollars in electricity and got hit with a pass through charge of $57.00. Deregulation has done nothing for consumers. The electric lobby really bought a good deal for themselves as allowing the electric provider network to rape consumers worse than any credit card company ever thought of doing.

  10. catie

    can anyone tell me of an electric company where this WONT happen to me??? is there any GOOD electric companys out there???

  11. rachel

    Beware of POTENTIA Energy . I could not believe how much the TDSP charge is !!!!this month has been the lowest and is $93.00 .They never told me about these fees I’m new to houston TX and many things are very different here from other states. They quoted me way below market average and I thought I was getting a great deal, but here i’m stuck in this contract for a year and paying a lot of money.

  12. Joanne

    I just started with Mega Energy, and I have the same issues as described above. They promised me .085 kWh fixed rate for 2 years. The first bill came 2 weeks late in the mail, so they hit me with a late fee which they still haven’t taken off my bill, and the pass through rate made my .085 turn into a .148.

    How can I get out of my contract?

  13. Jason

    Don’t know about the others, but with MegaEnergy you can change your plan to a bundled plan (instead of energy only plan) that will include the TDSP charges and come out lower per kWh. Can’t get out of the contract but can at least save some money until it expires. Also, be sure to file a complaint with the PUC about their practices.

  14. kenneth

    I just got my first bill from Mega Energy to and have this issue. Yes they offer to switch you to a bundled plan that is more expensive that Reliant. The Residential Reliant plan includes all the pass through charges, correct?

    I was on StarTex Power before and never had this issue.

    • Hi Kenneth. You say you were using StarTex before. Did you pay attention to those “fees” on your statement every month? How much did they run you, about? Did they go up and down or stay the same? I was thinking of changing to StarTex after my current contract with Champion expires. Reason being also, is that with Champion I would be locked into another 12 mos. and by the time it renews next year at this same time, of course, I could “look forward” (yea right..WRONG!) to once again, some higher “summer” rates. I was going to change to go with a 9 mo. StarTex contract so that if I don’t like them by the end of the year or early next year, I could start back with Champion, and getting in at the right time of the year, my rates would be lower (hoping). Right now, Champion is getting too high, it appears. But they are being audited and having to “go back” and re-bill folks for TDSP fees they missed. I got it on my current bill and there was a posting for $3.60, .01cents, .07cents, and another .07cents. They are too general on the bill calling it “Debit on 03/21/11 Adj for Unbilled TDU Surcharges from Oct 2010 – Feb 2011”. They use this description on every singe entry charge I just mentioned. So the total amount comes to $3.75. Anyway, I think we as consumers should ban together and start complaining to someone in Washington or Austin about this! It’s outrageous that the Pimps (Oncor, Centerpoint) have the Whores (Champion, Reliant, TXU, ) all in line where they want them. And we, my dear are the “Johns” (customers) and thye have us by the you-know-what(s). It’s a friggin’ shame!! Sorry for my analogy folks, but it is what it is!!

  15. josie r.

    I am goin thru a similar experience with Entrust Energy…nothg abt unbundled billing was disclosed when agent approached me abt making a switch from my previouselectric provider only thing said was that "a few homes from my neighborhood qualified". What a joke!! DEFINITELY FILING A COMPLAINT W PUCT.

  16. Ana Weaver


    • electricitybid

      If you live in Texas your TDSP company is likely Oncor, or Centerpoint Energy. They may have hired some contractors to come and cut down the trees in your yard away from the power lines. I would start by calling their outage number and ask to be transferred to the person that can help you. You can also file a complaint with the Public Utility Commission of Texas here: https://www.puc.state.tx.us/consumer/complaint/Co

  17. Wendy - Houston, TX

    Ive been screwed over. I have my energy from Cirro Energy. I transferred to them for the low rate. I just got my bill and my TDU charge is $150.91. My energy bill is only $195.61. Almost half of my bill of $335.64 is the TDU charge. I am very upset. How was I supposed to know they did this kind of fraud. All I know is I shopped around for the cheapest rate and boy did I get it. I guess as they say you get what you pay for. I chose them to save money and now I am spending MORE. How can they get away with this. I will fax this to the PUC but really, are they going to do anything about it. My budget does not allow for such extra charges. If I can't pay it they will just cut off my electricity. What is one supposed to do.

  18. electricitybid


    I would ask them for the electricity facts label that comes with your rate and see if your bill total makes sense with what they listed on the facts label. If there is a major difference you should first try and work it out with Cirro. If they are unresponsive I would complain to the PUCT.

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