How to Read a Texas Commercial Electricity Bill, Line by Line
A Texas commercial bill has four layers: the energy charge (set by your supplier, the only shoppable line), TDU delivery and demand charges (fixed by the utility, non-negotiable), riders (utility-set pass-throughs billed through your supplier), and state taxes. Divide total bill by total kWh to find your real all-in rate before comparing any quote.
Say a Dallas warehouse uses 38,000 kWh a month: its bill arrives with ten or eleven line items and one total due. Maybe three of those lines are things a competitive supplier can actually move. The rest is Oncor's delivery tariff, PUCT-mandated riders, and state taxes that stay exactly the same no matter which retail electric provider's logo sits at the top of the invoice. A warehouse manager who compares three quotes by looking at the bottom-line total, instead of isolating the energy charge, is comparing apples to submarines.
Who Controls Each Line: Supplier, TDU, or the State
Every Texas commercial bill breaks into three ownership buckets. Your retail electric provider sets the energy charge and negotiates contract terms with you directly. The TDU, Oncor in Dallas-Fort Worth, CenterPoint in Houston, AEP Texas Central and North across South and West Texas, or TNMP in pockets statewide, sets delivery and demand charges through rates the PUCT approves. Those numbers show up on every bill in that territory regardless of which supplier you pick. Riders are utility-set charges that your supplier collects and passes through on your behalf, and state and local taxes are set by law. None of that is up for negotiation with a sales rep, no matter how the pitch is framed.
- Energy charge (cents per kWh times usage): set by your REP. Fully negotiable, fully shoppable.
- TDU delivery charge (per-kWh distribution rate): set by the TDU's PUCT-approved tariff. Identical for every supplier operating in that territory.
- Demand charge (per-kW, based on your single highest 15-minute interval): set by the TDU. Not shoppable, but manageable through equipment scheduling and contract structure.
- Riders (transmission cost recovery, nuclear decommissioning, energy efficiency cost recovery, and similar line items): set by the TDU or PUCT, billed through your supplier.
- State and local taxes: set by law, identical across every supplier.
- PUCT assessment fee: a small statutory charge that funds the commission, identical across every supplier.
The Energy Charge and the Demand Charge Are Where the Real Fight Happens
The energy charge is the only line a supplier competes on, and it's easy to overlook when comparing quotes. It's usually quoted as a flat cents-per-kWh price on a fixed contract, or as an index formula tied to an ERCOT settlement point on larger accounts. The demand charge works differently. The rate itself is fixed by the TDU, but how much demand your account generates is something you control, and how your contract prices that demand is something your supplier controls. On IDR-metered accounts, the interval data recorder meters used on larger commercial customers, your single highest 15-minute kW spike in the billing cycle sets the demand charge for the entire month, even though that spike lasted 15 minutes out of roughly 43,200 in a 30-day cycle. In Houston, served by CenterPoint, demand charges can be a significant cost factor for energy-intensive operations like manufacturing or refrigeration-heavy restaurants.
A restaurant or warehouse can be especially exposed to this. A walk-in freezer compressor kicking on at the same moment as the lunch-rush HVAC load can spike a 15-minute demand reading high enough to add real money to a single month's bill, and that demand charge doesn't change no matter which supplier's name is on the invoice. Staggering equipment startup times is one of the few free fixes available to any business owner willing to look at the load.
The One Division That Tells You What You Really Pay
Take your total bill and divide it by your total kWh for the month. That number, your all-in rate, is the only honest way to compare two bills or two quotes. A quoted supply rate of 6.9 cents per kWh means nothing on its own if one supplier's contract carries heavier pass-through riders than another's. Here's a worked example, not a live quote: a Dallas warehouse on Oncor using 38,000 kWh in a month pays roughly $2,622 in energy charges at a 6.9 cents per kWh supply rate, $1,216 in Oncor delivery charges, $866 in demand charges off a 105 kW peak, and about $265 combined in riders and taxes. Total bill: $4,969. Divide that by 38,000 kWh and the all-in rate comes out to 13.08 cents per kWh, even though the quoted supply rate was 6.9 cents.
- Step 1: Find total kWh used for the billing cycle, usually printed near the top of the bill.
- Step 2: Find the total amount due.
- Step 3: Divide total amount due by total kWh. That's your all-in rate.
- Step 4: Separately locate the energy charge line item and divide it by kWh. That's the number to hand a competing supplier for an apples-to-apples comparison.
- Step 5: Compare that supply-only number, not the all-in rate, against any new quote you're given.
Before you sign anything, run the division on your last three bills. If your all-in rate is sitting well above the Texas commercial average of 8.66 cents per kWh (EIA, 06/2026), your energy charge or your demand charge is doing the damage, usually both. That EIA figure blends corner stores with hospitals, so treat it as a benchmark, not a quote. Ask any supplier for the energy charge alone, in cents per kWh, in writing, before comparing it to what you're paying now.
Ready to see what a supplier can actually compete on for your account? We'll pull your usage, isolate the shoppable energy charge, and get you real bids.
Get My QuoteFrequently asked questions
The energy charge is what your retail supplier charges for the electricity itself, and it's the only line you can shop. The delivery charge is what your TDU (Oncor, CenterPoint, AEP Texas, or TNMP depending on your service area) charges to move that power to your meter, and it's identical no matter which supplier you choose.
No. The demand charge rate itself is set by your TDU's PUCT-approved tariff and doesn't change with your supplier. What you can control is how much demand your equipment generates and whether your contract structure helps manage it.
Divide your total bill amount by your total kWh used for that billing cycle. That single number accounts for the energy charge, delivery charges, demand charges, riders, and taxes together, and it's the only fair way to compare two bills.
Texas's average commercial all-in rate was 8.66 cents per kWh as of June 2026 (EIA), but that blends every account size from a small retail shop to a large hospital. A business with heavy demand charges, like a restaurant or warehouse with significant HVAC and refrigeration loads, will usually run above that average even on a competitive supply rate.
Cities served by municipal utilities or utilities outside ERCOT, including Austin (Austin Energy), San Antonio (CPS Energy), El Paso (El Paso Electric), and Brownsville (BPUB), don't have retail choice. Businesses there buy on the utility's own commercial tariff. A company with locations in deregulated territory like Houston, Dallas, or Fort Worth can still shop those accounts.