Bundled vs Unbundled Electricity Rates in Texas — What You're Not Being Told
5 minute read · Texas electricity pricing
You've seen the ads: “Electricity as low as 5¢ per kWh!” You sign up, excited about the savings. Then your first bill arrives and the math doesn't add up. You used 1,000 kWh but your bill is $90, not the $50 you expected. What happened?
In most cases, you signed up for an unbundled rate — a price that only covers the energy itself, not the cost of delivering it to your home. This is one of the most common sources of confusion in the Texas electricity market, and understanding it can save you hundreds of dollars a year.
What is an unbundled rate?
In Texas, your electricity bill has two main components billed by different entities. Your Retail Electricity Provider (REP) charges you for the energy itself — the electrons. Your Transmission and Distribution Service Provider (TDSP) — also called the utility or wires company — charges separately for maintaining the poles, wires, and infrastructure that deliver electricity to your home.
An unbundled(or “energy-only”) rate covers only the REP's energy charge. The TDU delivery charge gets added on top and is listed as a separate line item on your bill. A bundled rate includes both, so the number you see is the number you pay.
The math that matters
TDU delivery charges in Texas typically range from 3¢ to 5¢ per kWh, plus a small monthly fixed charge. Here's what that does to an advertised rate:
That gap — $38 per month — adds up to $456 per year. Multiply that by a few years and you can see why understanding this distinction is so important.
TDU delivery charges by service area
The delivery charge varies depending on which of the five Texas TDSPs serves your home:
| TDSP | Service Area | Approx. Delivery Charge |
|---|---|---|
| Oncor | Dallas / Fort Worth | ~3.8¢/kWh |
| CenterPoint Energy | Houston | ~3.5¢/kWh |
| AEP Texas Central | Corpus Christi / RGV | ~4.2¢/kWh |
| AEP Texas North | Abilene / Midland / Lubbock | ~4.5¢/kWh |
| Texas-New Mexico Power | Galveston / Parts of North Texas | ~4.0¢/kWh |
Delivery charges are approximate and include both per-kWh and fixed monthly charges averaged at 1,000 kWh. Check your TDSP's current tariff for exact figures.
How to spot an unbundled rate
Every electricity plan in Texas is required by the PUCT to have an Electricity Facts Label (EFL) — a standardized one-page disclosure showing the true all-in rate at 500, 1,000, and 2,000 kWh of usage. The rate printed on the EFL is the bundled rate including TDU charges.
If a provider's advertised rate is significantly lower than what the EFL shows at 1,000 kWh, you're likely looking at an unbundled energy-only rate. Texas Energy Compare pulls rates directly from EFL documents where available, so the numbers you see on our site reflect your actual cost — not a marketing number.
The bottom line
When comparing electricity plans, always compare the all-in rate at your actual usage level — not the headline number in the ad. The EFL is your most reliable source, and using a comparison tool that surfaces EFL rates (rather than marketing rates) is the fastest way to find a genuinely good deal.
On Texas Energy Compare, we display rates at 500, 1,000, and 2,000 kWh so you can compare at the usage tier that matches your home. Enter your ZIP code below to see plans for your service area.