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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