What Is a TDSP? Understanding Texas Electricity Delivery Charges
Everything Texas consumers need to know about the utility companies that deliver your electricity—and why they’re separate from your electric provider.
Key Takeaways
- TDSP = Transmission and Distribution Service Provider = the company that owns the poles, wires, and meters that deliver your electricity
- Your TDSP is assigned by your address—you cannot choose or switch to a different one
- TDSP charges appear as “delivery charges” on your bill and are identical regardless of which retail electricity provider you choose
- Texas has 5 major TDSPs: Oncor, CenterPoint, AEP Texas North, AEP Texas Central, and Texas-New Mexico Power (TNMP)
- Power outage? Call your TDSP, not your retail electricity provider—they handle the physical infrastructure
The “Behind the Scenes” Companies Powering Your Home
A TDSP (Transmission and Distribution Service Provider) is the utility company that owns and maintains the physical infrastructure delivering electricity to Texas homes and businesses—power lines, utility poles, transformers, and meters. Also called TDUs (Transmission and Distribution Utilities), these companies are assigned by location, not chosen by consumers.
If you’ve ever looked at your Texas electricity bill and wondered why there are two separate sets of charges, you’ve already encountered the work of your TDSP. While your retail electricity provider (like TXU Energy, Reliant, or Green Mountain Energy) sells you electricity and sends your bill, there’s another company working behind the scenes: your TDSP.
Think of your TDSP as the highway system for electricity. Your retail provider sells you the electricity; your TDSP makes sure it actually gets to your house. They own every utility pole you see on the street, every transformer on your block, and the meter attached to your home. When a storm knocks down a power line, it’s TDSP crews who show up to fix it.
“Your REP is like your cell phone carrier—you choose them, they bill you, and you can switch whenever you want. Your TDSP is like the cell tower network—you don’t choose it, but you absolutely need it for your service to work.”
This separation exists because Texas operates one of the most unique electricity markets in the United States. It’s designed to give you choice where competition makes sense (who you buy electricity from) while keeping the delivery infrastructure stable and regulated.
Here’s the Quick Backstory: Why Texas Split Things Up
In 1999, Texas passed Senate Bill 7, fundamentally restructuring how electricity works in the state. By 2002, the market opened—one of the largest electricity restructurings in U.S. history. The goal? Bring competition to drive down prices while keeping the infrastructure stable.
The reasoning was straightforward: competition for generation and retail (where multiple companies can compete to sell you electricity, driving prices down) paired with a regulated monopoly for delivery (because building multiple competing networks of power lines would be wasteful and expensive).
This is why TDSP rates are regulated by the Public Utility Commission of Texas (PUCT). You can’t choose your TDSP, but you’re protected from price gouging because their rates require state approval. It’s a trade-off: no choice in delivery, but guaranteed fair pricing.
The 5 Major TDSPs in Texas
Your TDSP depends on where you live
Oncor
The largest TDSP in Texas. Oncor serves the Dallas-Fort Worth metroplex and surrounding areas, plus parts of West Texas—over 10 million customers across 400+ cities and communities.
CenterPoint Energy
Serves the Greater Houston metropolitan area with approximately 2.8 million metered customers. If you’re in Houston or its suburbs, CenterPoint is your TDSP.
AEP Texas North
Serves Abilene, Wichita Falls, and surrounding West Texas communities. One of two AEP utilities operating in the state’s deregulated market.
AEP Texas Central
Serves Corpus Christi, Laredo, McAllen, and the Rio Grande Valley. Covers much of South Texas’s deregulated electricity territory.
Texas-New Mexico Power (TNMP)
Serves various scattered communities including parts of Central Texas. TNMP’s service territory is more fragmented than other TDSPs.
Not sure who your TDSP is? Check your electricity bill—it’s listed in the delivery charges section. You can also enter your address on powertochoose.org to find your TDSP.
TDSP vs. REP: What’s the Difference?
Your REP (Retail Electric Provider)
- You CHOOSE them when shopping for electricity
- Sets your energy rate (price per kWh)
- Sends your monthly bill
- Handles billing questions and customer service
- You can switch anytime (check contract terms)
Examples: TXU Energy, Reliant, Green Mountain Energy, Direct Energy
Your TDSP
- ASSIGNED by your address—no choice
- Owns poles, wires, transformers, your meter
- Physically delivers electricity to your home
- Handles power outages and restoration
- Reads your meter each month
Examples: Oncor, CenterPoint, AEP Texas, TNMP
When your power goes out, call your TDSP—not your REP. Your retail provider can’t fix a downed power line. Save your TDSP’s outage number in your phone.
Understanding TDSP Charges on Your Bill
Here’s what you’re actually paying for
A fixed monthly fee for being connected to the grid, regardless of how much electricity you use. Think of it as the “membership fee” for having power available.
A per-kilowatt-hour charge for the electricity delivered to your home. Covers the cost of transmission and distribution infrastructure maintenance.
Covers your electric meter and the monthly meter reading services. Most TDSPs now use smart meters that transmit usage data automatically.
A state-mandated charge that funds low-income energy assistance programs and energy efficiency initiatives across Texas.
Here’s What Most People Don’t Realize
TDSP charges are pass-through costs. Every retail provider in your area pays the exact same TDSP rates—they can’t mark them up or discount them. When shopping for electricity, don’t get distracted by delivery charges—they’re identical across all plans. Focus on comparing energy rates instead. That’s where the real difference is.
Frequently Asked Questions
Can I choose my TDSP?
+No—your TDSP is determined by your physical address. Unlike your electricity provider, you can’t shop around or switch to a different TDSP. Everyone at your address, regardless of which retail provider they choose, uses the same TDSP.
Why can’t I choose my TDSP?
+Because transmission and distribution is what economists call a “natural monopoly.” It would be incredibly wasteful and expensive to have competing companies building duplicate networks of power lines, poles, and transformers throughout the same neighborhoods. Instead, TDSPs are regulated by the state to ensure fair pricing—you can’t choose them, but you’re protected from price gouging.
Do TDSP charges vary by electricity provider?
+No. TDSP charges are identical regardless of which retail provider you choose. They’re pass-through costs—your REP simply collects them and passes them along to your TDSP. That’s why comparing energy rates (not delivery charges) is what matters when shopping for electricity.
Who do I call when my power goes out?
+Your TDSP, not your retail provider. Your REP handles billing and customer service, but they can’t dispatch a crew to fix a downed power line. Save your TDSP’s outage number in your phone now—you’ll thank yourself during the next storm. (See the TDSP list above for outage phone numbers.)
Is TDSP the same as TDU?
+Yes—TDSP (Transmission and Distribution Service Provider) and TDU (Transmission and Distribution Utility) are used interchangeably in Texas. Same companies, same function, different acronym. You might see either term on your bill or when reading about Texas electricity.
Sources
- Public Utility Commission of Texas (PUCT)
- Electric Reliability Council of Texas (ERCOT)
- Oncor Electric Delivery
- CenterPoint Energy
- AEP Texas
- Texas-New Mexico Power