Phone 1.877.544.4857
Hours (CST) 9:00AM - 1:00PM

What are TDU Delivery Charges?

low fixed rate & sign-up bonus! Compare Now!

TDSP stands for Transmission/Distribution Service Provider. Another term you might see that refers to the same thing is TDU (Transmission/Distribution Utility). These are the companies that are responsible for getting the electricity from the generators to your home or office. All the poles and wires that you see along the roads and highways are operated and maintained by the TDSPs.    

TDSPs are also responsible for maintaining the meter that records how much energy is being used at any moment and adding it up over time. Your TDSP is responsible for making the necessary repairs and restoring power to consumers when your power goes out due to something as large as a natural disaster, or as simple as a small animal climbing on sensitive equipment. 

What are TDSP Charges?

Clearly, there are a lot of costs associated with maintaining such a large system of millions of miles of electrical lines and millions of meters. 

When you pay TDSP charges, it is like paying for shipping charges for an online purchase. If you purchase some shoes at your favorite online retailer, there is a cost associated with getting the shoes delivered from the manufacturer to your home that usually shows up as a ‘Shipping’ or ‘Delivery’ line item on your bill. Just as with shoes in this example, there is a cost associated with the delivery of electricity to your home, and TDSP charges are just that. You can find the TDSP Charges line item on your electricity bill.

Important note about TDSP charges…

TDSP charges are based on rates that are set forth by each TDSP in a rate case and approved by the Public Utility Commission (PUC). It is important to understand that TDSP Charges apply to all customers, but they are typically structured differently based on the customer size. Residential customers often have a structure with both a fixed rate charge per month and a per unit energy charge; whereas larger customers also typically get a charge based on their peak demand.  It is also the case that your TDSP Charges are going to be the same amount regardless of who you have as your Retail Electricity Provider.

How are TDSP charges applied?

To better understand how TDSP charges are applied it would be helpful to use an example of two homes that are on the same street.

House A typically uses 1,000kWh per month. House B typically uses more energy on a monthly basis, averaging 1,500kWh.

TDSP charges are billed to customers in two parts. 

First, there is a fixed charge amount per month that covers cost of metering. This component of the TDSP charges is going to be the same for all homes within a utility company's service area because everyone will have the same metering device (smart meter) installed. The two homes in the example above will both pay the same fixed charge each month. The fixed component of the TDSP charge is usually the smaller of the two components.

The other, often larger, part of TDSP charges are the delivery charges for transmission and distribution. These charges will vary from customer to customer because it is a function of how much energy a customer uses during the month. Referring to our example above, House B will be charged 50% more than House A for their delivery charges because they consumed 50% more kilowatt-hours over the course of the month.

How can I lower my TDSP charges?

 Understanding how TDSP charges are applied helps customers put together an action plan to lower this part of their electricity bill. Unfortunately, nothing can be done about the fixed charge. However, a customer does have control over the delivery charge because it grows as electricity usage grows. House B can lower the TDSP charges on their bill by lowering their consumption.

Are you like House B above and want to consume fewer kilowatt-hours each month. Here are some room-by-room tips that you can use to ensure you end up paying less in TDSP charges.


Laundry Room


Lighting and Electronics

What about TDSP charges for small businesses?

While TDU delivery charges for residential customers are straight forward, commercial customers usually have many more factors to consider, like Peak Demand which are beyond the scope of this article. If you are a business owner and you want to reduce your TDSP delivery charges, you will need to consider how you can control the amount and timing of your peak consumption as this can play a major role in how much you pay in TDSP charges over time.

For more great information about your electricity bill, check out our guide. Your Electricity Bill - 6 Questions You Should Ask?

low fixed rate & sign-up bonus!