Houston – You will notice a significant increase in your next electric bill if you live in a deregulated electric market in Texas, even if you use the same amount of electricity as last month.
Why the increase in your electricity bill? The companies that own the lines and wires increased transmission and distribution fees (TDSP fees) on Sept. 1. This is a pass-through charge on your electric bill. The TDUs charge the retail electric providers, and they pass the fees along to you.
CenterPoint Energy is the company that owns the electric infrastructure in the greater Houston area. Texas New Mexico Power owns the lines, wires, and meters in the Galveston County area. Every year on March 1st, the TDSP fees typically decrease ahead of the summer season when electric usage goes up. On Sept. 1, the TDSP fee increase as electric usage goes down in the winter months.
The new electric rates compared to the old ones
CenterPoint’s new rate is 5.46/ kWh, an increase of 1.7 cents/ kWh over the rate customers have paid since March 1, 2023. For a customer using 3000 kWhs a month, you will pay an extra $51 after Sept. 1.
In Texas New Mexico Power’s service area, TDSP charges went up by 1.5 cents/ kWh. Customers in TNMP’s area will see an increase of $45 using 3000 kWh of electricity.
Why do TDSP rates change?
Each of the regulated utility companies is entitled to collect 100% of their costs from their ratepayers. And they are guaranteed to receive a rate of return. That’s because they provide a critical public service: delivering electricity, maintaining the infrastructure, and responding in case of an emergency.
The Public Utility Commission of Texas reviews and approves each utility’s rate case.
Energy Ogre’s Chief Operating Officer David Kinchen told KPRC 2 that TDUs like CenterPoint and TNMP have to explain to regulators why they need the extra money.
“They can’t just slap something in there when they feel like. These are all kind of justifiable costs,” Kinchen said. “As we’ve gone through and wanted a robust grid and you want it to be more winter-proof and all these things, they’ve been introducing charges that kind of cover those things.”
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