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DELIVERY CHARGES 101 - SECONDARY SERVICES

HOW T&D INTERACTS WITH DIFFERENT ENTITIES

How T&D interacts

kW vs. kWh

For illustrative purposes, think of the speedometer in your car like an electric meter. The odometer measures how far you’ve driven over a given period of time. If you subtract the odometer reading at the beginning of the month from the odometer reading at the end of the month, you can determine how many miles you drove during the month. This is similar to how the electric meter works. If you subtract the register read at the beginning of the monthly billing cycle from the register read at the end of the billing cycle you can determine how much energy (kWhs) was consumed during that billing cycle. The needle on the speedometer measures how fast you are  driving. Consider if the needle left a mark at its highest speed each month which is reset at the end of the month. This is similar to how the demand register works on the electric meter. The demand register records the highest amount of electricity used during any given 15-minute interval during the monthly billing cycle (kW). It is reset at the end of the monthly billing cycle.

kW vs kWh

SECONDARY SERVICES OVERVIEW

Secondary Service Less Than or Equal to 10 kW charges are made up of several fixed monthly and variable charges as specified in the Tariff, section 6.1.1.1.2 Secondary Service Less Than or Equal to 10 kW:

 

Fixed Monthly Charges may include, but are not limited to, the following:
Customer Charge
Metering Charge

 

Variable Charges may include, but are not limited to, the following:
Distribution System Charge – Rate Factor * kWh
Transmission Cost Recovery Factor – Rate Factor * kWh
Distribution Cost Recovery Factor – Rate Factor * kWh
Energy Efficiency Cost Recovery Factor – Rate Factor * kWh
Nuclear Decommissioning Charge – Rate Factor * kWh

 

Secondary Service Greater Than 10 kW charges are made up of several fixed monthly and variable charges as specified in the Tariff, section 6.1.1.1.3 Secondary Service Greater Than 10 kW:

 

Fixed Monthly Charges may include, but are not limited to, the following:
Customer Charge
Metering Charge

 

Variable Charges may include, but are not limited to, the following:
Distribution System Charge – Rate Factor * Billing kW
Transmission Cost Recovery Factor – Rate Factor * NCP kW or 4CP kW
Distribution Cost Recovery Factor – Rate Factor * Billing kW
Energy Efficiency Cost Recovery Factor – Rate Factor * kWh
Nuclear Decommissioning Charge – Rate Factor * Billing kW

 

DISCLAIMER: Bills from Retail Electric Providers (REPs) may differ in how charges are displayed.

REP & T&D UTILITY

What is the difference between the REP (Retail Electric Provider) and the TDSP (Transmission and Distribution Service Providers)?

 

Retail Electric Providers (REPs): In the Texas competitive retail electric market, these are companies that market electricity and bill customers.  They buy power from the electric generation companies and resell it to homeowners, renters, and businesses.  They’re sometimes referred to as retail energy providers, competitive retailers, and electricity suppliers. They bill you for your monthly energy usage.

 

Transmission and Distribution Service Providers (TDSPs): These are regulated entities that deliver and meter electricity; TDSPs may also be called Transmission and Distribution Utilities (TDUs.) These companies maintain the transmission and distribution power lines, correct power outages and read your meter to determine your kW demand and how much energy (kWh) you used during a billing month.  TDSPs are required by law to offer you the same service regardless of which REP with whom you have enrolled.  TDSPs use advanced meter technology so you can access your home’s historic energy usage at Smart Meter Texas and Oncor Power Tool. Four TDSPs operate in the deregulated zones of Texas including Oncor Electric Delivery Company LLC, CenterPoint Energy Houston Electric, LLC, Texas-New Mexico Power Co., and AEP Texas Inc.. The TDSP bills the Retail Electric Providers (REPs) for delivering and metering that electricity, which is then bundled into what the REPs charge customers. The total amount of a customer’s bill will ultimately depend on what provider and plan you signed up for. 

TOP BILLING QUESTIONS

How can we help you? Find answers to all your questions.

Charges depend on the rates contained in the different rate schedules listed in Oncor's Tariff for Retail Delivery Service, which are approved by the Public Utility Commission of Texas. The most common rate schedules are Residential Service, Secondary Service less than or equal to 10 kW, and Secondary Service greater than 10 kW. See Oncor's Retail Tariff for Delivery Service for further details. (link to Oncor's Tariff page)  TDU delivery charges are revised from time to time, but often when charges seem to be high, it is due to periods of high usage, such as during the summer when the air conditioning is running or in the winter when electric space heating may be warming your house.

In the Texas deregulated market, REPs are companies that sell electricity to retail customers.  REPs buy electric energy from electric generation companies and resell it to homeowners, renters, businesses, and other customers. Your REP typically bills you for your electric energy usage based on your monthly metered kWhs.  In addition to the electric energy charges, REPs also bill customers for the delivery of the electricity from the generator to the customer.  Oncor owns the poles, wires and meters that deliver electricity. The TDU/delivery charges that you see on your bill from your REP reflect the cost of delivering electricity. Oncor charges the REP for delivering electricity on behalf of the REP, and the REPs includes these charges on the bill to their customers at a rate structure agreed to by the customer when they enroll with the REP. Oncor’s delivery rates are regulated and approved by the Public Utility Commission of Texas

Represents the instantaneous demand of how a customer consumes electricity. Oncor records the highest demand over a 15-minute period during the billing month to determine the kW Demand. 

Your premise must maintain a load equal to or below 10kW for twelve months for the account to transition to the Less Than or Equal to 10kW rate schedule (6.1.1.1.2). 

You can review the Powered by Oncor tool or Smart Meter Texas to monitor the daily and monthly kW. Powered by Oncor  and Smart Meter Texas.

On many larger accounts the meter’s registering capacity may only represent a small fraction of the actual load. This is due to the use of current transformers and voltage transformers (VTs) which are used for safety reasons to reduce the current and voltage before it enters the meter. Transformer ratios are then used to determine the multiplier.  Therefore, to compute the precise amount of energy consumption (kWh) and demand (kW), the meter reading must be multiplied by a factor based on the CT and VT ratios.

As an example, although the actual distance between two cities may be 400 miles, it would be represented by only 4 inches on a map. The meter multiplier is similar to a map scale in that it relates to the meter's scaled down reading of the actual consumption.

Glossary

  • Customer Charge: Monthly charge, based on rate class, for customer service expenses. Includes customer care and billing functions. (Flat Rate per month).
  • Metering Charge: Monthly charge, based on rate class, for meter property and meter reading activities.
  • Distribution System Charge (DSC): Charge for all distribution related facilities and expenses required to operate the Oncor distribution system for the delivery of energy to the end-use customer. (Per kWh, actual or Billing kW).
  • Transmission Cost Recovery Factor (TCRF): Charge to reimburse Oncor for their customers' access to and load on the ERCOT Transmission system.
  • Distribution Cost Recovery Factor (DCRF): Interim rate adjustment which recovers incremental Distribution investment, such as distribution lines, substations, transformers, and meters, between rate cases. These interim adjustments help smooth out customer rates over time as opposed to larger cost impacts that may occur if changes were only made in rate cases.
  • Energy Efficiency Cost Recovery Factor (EECRF): Recovers expenses associated with providing energy efficiency incentive programs to all eligible customers in a market-neutral nondiscriminatory manner.
  • Nuclear Decommissioning Charge (NDC): A fee that covers the cost of safely removing a nuclear generation facility from service.
  • Rate Case Expense Surcharge: A charge to recover the costs associated with the regulatory proceedings.
  • Mobile Generation Rider: The Mobile Generation Rider recovers costs associated with temporary facilities leased by Oncor to provide temporary power during significant power outages. Outages supported by mobile generation deployment are primarily related to critical infrastructure facilities.
  • kWh: Represents the amount of electricity consumed over a period of time. 
  • Delivery Charges: The term used to describe the compilation of Commission authorized rates and charges for the use of Company’s Delivery System. Delivery Charges are comprised of Delivery System Charges and Discretionary Charges.  A customer's electric bill may have a line item that says "TDU Delivery Charges" or something similar.
  • Tariff: The document filed with, and approved by, the PUC pursuant to which Company provides Delivery Service. It is comprised of Rate Schedules, Riders, and service rules and regulations. The service rules and regulations include definitions, terms and conditions, policies, and Service Agreements.
  • kW Demand: May be applicable to non-residential customers. Represents the instantaneous rate at which a customer consumes electricity. Oncor records the highest demand over a 15-minute period during the billing month to determine the kW Demand.
  • Billing kW: May be applicable to non-residential customers. Demand used for billing purposes as stated in the applicable section of Oncor's Tariff.  In many cases, the Billing kW is the higher of the NCP kW or 80% of the highest monthly NCP kW established in the 11 months preceding the current billing month. See applicable section of the Tariff for your specific circumstances.
  • Annual Load Factor: May be applicable to non-residential customers. The Annual Load Factor (ALF) is the ratio, usually stated as a percentage, of actual kWh used during a year to the maximum kWh that could have been used during the year based on the customer's peak demand. 

The Annual Load Factor is calculated for most non-residential customers following each December cycle read and this factor will be used for subsequent billing months. 

Formula:
ALF = (Total annual kWhs) / (Peak kW x 8760 hours/yr)

  1. NCP kW: May be applicable to non-residential customers. The NCP kW applicable under the Monthly Rate section shall be the kW supplied during the 15-minute period of maximum use during the billing month.
  2. 4CP kW: The 4CP kW applicable under the Monthly Rate section shall be the average of the Retail Customer’s integrated 15-minute demands at the time of the monthly ERCOT system 15-minute peak demand for the months of June, July, August and September of the previous calendar year. The Retail Customer’s average 4CP demand will be updated effective on January 1 of each calendar year and remain fixed throughout the calendar year. Retail Customers without previous history on which to determine their 4CP kW will be billed at the applicable NCP rate under the “Transmission System Charge” using the Retail Customer’s NCP kW.
  3. Demand: See kW Demand
  4. Demand Ratchet: May be applicable to non-residential customers.  Eighty percent of the highest monthly NCP kW established in the 11 months preceding the current billing month.
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