Texas Electricity Billing Terms

Texas Electricity Glossary

Texas electricity bills combine charges from your retail provider (energy) and your TDU (delivery), plus taxes and regulatory fees. Understanding each line item lets you verify accuracy, spot errors, and find plans with lower true costs. Key billing concepts include base charges, fuel adjustments, deposits, disconnection rules, and assistance programs.

See also: TDU Charge · EFL · Effective Rate · Bill Credit · Minimum Usage Fee

Base Charge (Monthly Customer Charge)

A fixed fee on your electricity bill charged every month regardless of how much electricity you use. It covers the REP's cost to maintain your account. Base charges typically range from $0–$9.95/month and significantly raise the effective rate for low-usage customers.

Fuel Charge (Fuel Cost Adjustment)

A variable surcharge on some Texas electricity plans that reflects the cost of fuel used to generate power. It can change month to month based on natural gas prices. Most fixed-rate plans bundle this into the stated per-kWh rate; some plans list it as a separate line item.

Transmission Charge

The portion of your TDU delivery fee that covers the high-voltage transmission lines used to move bulk electricity from generators to local distribution substations. Included in the overall TDU charge on your bill.

Distribution Charge

The portion of your TDU delivery fee that covers the local distribution lines, transformers, and poles that bring electricity from substations to your home. Together with the transmission charge and monthly customer charge, it makes up the total TDU delivery fee.

Franchise Fee

A small fee collected by your REP on behalf of the city or county where you live, in exchange for the TDU's right to use public rights-of-way for its power lines. Typically 1–4% of the energy portion of your bill, itemized on the bill.

Security Deposit

A refundable amount (typically $150–$300) that a REP may require from customers with poor or no credit history before starting service. PUCT rules limit deposit amounts and require refund after 12 months of on-time payments. Prepaid plans eliminate the deposit requirement.

Late Payment Fee

A penalty charged when your electricity bill is not paid by the due date. PUCT rules cap late fees and require written notice before disconnection. Typically $5–$15 or a small percentage of the overdue amount.

Reconnection Fee

A fee charged by your TDU to restore electrical service after disconnection for non-payment. Ranges from $20–$60 depending on the TDU and whether the reconnection is scheduled during normal business hours or as an emergency after-hours restoration.

Estimated Read

A meter reading estimated by your REP when your TDU's smart meter data is unavailable. With smart meters now near-universal in ERCOT territory, estimated reads are rare but can still occur during communication outages. If you receive an estimated bill, request a corrected actual-read bill.

Budget Billing (Average Monthly Billing)

A payment option offered by some REPs where your estimated annual electricity cost is spread evenly across 12 monthly payments, smoothing out seasonal swings. A true-up payment at year-end corrects any difference between estimated and actual costs.

True-Up

An annual reconciliation between estimated and actual electricity costs, common with budget billing and net metering plans. If you paid more than actual usage during the year, you receive a credit; if less, you owe the difference.

Deferred Payment Plan

A PUCT-mandated option that requires REPs to offer customers facing disconnection a structured payment arrangement — allowing them to pay overdue balances in installments rather than in one lump sum. Helps prevent service interruption.

Disconnect Notice (Disconnection Warning)

A written notice required by PUCT before a REP or TDU can disconnect service for non-payment. Must be provided at least 10 days before the scheduled disconnection date and must state the total amount owed and the date service will be cut.

Medical Baseline / Critical Care

A PUCT-protected status for customers with a life-threatening medical condition who depend on electricity-powered medical equipment. Critical care customers cannot be disconnected during certain periods and must receive additional notice before any service interruption.

Levelized Rate

A rate structure where all energy costs are blended into a single flat per-kWh charge with no separate base charge, bill credits, or tiered pricing. Levelized rates are easier to compare and calculate but are less common in the Texas deregulated market.

Net Usage (Billing Period Usage)

The total kilowatt-hours consumed during a billing period, as reported by your TDU's smart meter. For solar customers with net metering, net usage is imports minus exports. Your bill's energy charge is based on net usage multiplied by the plan's per-kWh rate.

Miscellaneous Utility Charges

Small pass-through fees on Texas electricity bills covering items like Nuclear Decommissioning Cost Recovery (NDCR), State of Texas Assessment (STAS), and other regulatory charges. Individually small (pennies per month) but itemized on detailed bills.

Over-Billing / Under-Billing

Occurs when a REP charges more or less than the correct amount based on actual meter data. PUCT requires REPs to issue corrected bills when billing errors are discovered and limits how far back a REP can back-bill for under-billing (typically 12 months).

LITE-UP Texas / CEAP

Texas low-income energy assistance programs. LITE-UP Texas (Low-Income Electric Customers) provides a percentage discount on electric bills; the Customer Energy Assistance Program (CEAP) offers one-time bill payment assistance. Both are income-qualified programs funded through utility surcharges.

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