TDSP

Why are electricity utilities important?

In deregulated energy markets, the difference between Texas utilities and Texas electricity providers can seem difficult to understand if you haven’t done a lot of research. However, it’s important to know what a utility is because utility charges will show up on your electricity bill every month.

What is an electricity utility / TDSP?

On a high level, a Transmission/Distribution Service Provider (TDSP) or electricity utility is a company that ensures that electricity gets from your electricity provider to your home. TDSPs cover territory, which means you can usually find your electricity utility by zipcode. If you’re looking up competitive electricity rates by zipcode, you’re functionally looking up a plan based on your TDSP.

Electricity service can basically be divided into two processes. There’s the process of choosing a plan and supplying the electricity, and then there’s the process of delivering that plan’s electricity to your home. In a regulated market, the utility would handle both of those processes, but in a deregulated energy market, electricity providers offer the plans to consumers, and electricity utilities or TDSPs deliver the electricity to your home. Electricity providers offer different plans in different TDSPs, so if you sign up for a plan in Houston, you won’t always be able to find the same plan in Dallas, or vice versa.

So, if you wanted to switch to a plan with renewable energy, you would choose a new plan with your electricity provider that offered renewable energy. However, if you experienced a loss of electricity at your address, you would want to call your electricity utility or TDSP to restore your power.

What are TDSP charges on my electricity bill?

Electricity distribution requires maintenance and upkeep, which is why on your electricity bills, you’ll typically see a TDSP charge, or a distribution fee. It can also be called a TDU charge, which stands for Transmission and Distribution Utility. That charge isn’t from your electricity provider, but it is from your electricity utility. It’s analogous to a shipping charge on an online purchase, or the delivery fee on a food delivery app. TDSP charges cover the cost of distributing your electricity to you over the month, as well as the cost of maintaining electricity lines and meters.