Umair Gaines
If you're a Texas resident, you may have noticed that you're paying two separate entities for your electricity: your Retail Electric Provider (REP) and Oncor. Oncor is a Transmission and Distribution Utility (TDU) company that is responsible for maintaining the physical infrastructure that delivers electricity to your home, such as power lines, meters, and poles. Oncor does not generate power or bill customers directly. Instead, it charges the REP for delivering electricity, and this charge is passed on to the customer by the REP and often referred to as delivery, wires, or transmission and distribution charges on an electric bill. These delivery charges typically include a fixed monthly fee and a variable charge based on electricity usage, and they remain the same regardless of which REP you choose.
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What You'll Learn
- Oncor is a utility company, not an electric company
- Oncor is responsible for maintaining the infrastructure that delivers electricity to your home
- You pay Oncor for delivering electricity
- Oncor's charges are referred to as delivery, wires, or transmission and distribution charges
- You can choose your electric company, but not your utility company
Oncor is a utility company, not an electric company
In a deregulated energy market, consumers have a choice of energy providers, who compete to offer the best rates and plans. Energy providers, or Retail Electric Providers (REPs), purchase electricity at wholesale rates and then sell it directly to consumers. REPs are responsible for billing and customer service, and they compete for your business.
In contrast, utility companies like Oncor are responsible for the infrastructure that delivers electricity to your home. This includes the maintenance and operation of power lines, meters, and power grids. Utility companies ensure that electricity is transmitted reliably and safely to consumers. They also play a crucial role in restoring power during outages.
In some cases, you may still receive a bill from your utility company, even if you have chosen an alternative energy provider. This is because the utility company is still responsible for delivering the electricity to your home and ensuring there are no interruptions in your energy supply.
It is important to understand the difference between your utility company and your energy provider, as you may need to contact them for different issues. For example, you would contact your energy provider for billing inquiries, but your utility company for power outages or emergencies.
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Oncor is responsible for maintaining the infrastructure that delivers electricity to your home
Oncor is a Texas utility company that is responsible for maintaining the infrastructure that delivers electricity to your home. It is one of the largest utilities in Texas, serving more than 420 Texas cities and delivering power to over 10 million Texans.
Oncor's core function is to maintain the power grids in its service areas, ensuring that electricity is transmitted reliably from power plants to end consumers. This includes repairing power lines and transformers and installing new infrastructure to support how energy is generated in growing communities. Oncor also plays a crucial role in the state's energy landscape by delivering electricity to homes and businesses across Texas.
The company does not generate power or bill customers directly. Instead, it charges the Retail Electric Provider (REP) for delivering electricity, and these charges are passed on to the customer by the REP. Oncor's charges are often referred to as "delivery," "wires," or "transmission and distribution" charges on an electric bill. These charges include a fixed monthly amount and a variable charge based on electricity usage.
In addition to its core function, Oncor offers incentive programs to help Texans save money on their electric bills. These programs include savings for solar energy, insulation, ENERGY STAR® appliances, LED lighting, and solar power. Oncor also provides educational initiatives, such as Super Safe Kids, to teach children about safety around power lines and equipment.
Oncor is committed to delivering safe, reliable, and clean energy to its customers and plays a vital role in maintaining the infrastructure that delivers electricity to homes in Texas.
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You pay Oncor for delivering electricity
Oncor is not an electricity provider and does not generate power or bill customers directly. Instead, it charges the Retail Electric Provider (REP) for delivering electricity, and the REP then bills the customer for the total cost of the electricity used, including the Oncor charges. Oncor's charges are often referred to as "delivery," "wires," or "transmission and distribution" charges on an electric bill.
For residential customers, Oncor's charges to the REP include a fixed monthly amount and a charge based on the amount of electricity used. These fees are set by Oncor and approved by the Public Utility Commission of Texas (PUCT) to cover the costs of transmitting and distributing electricity. Oncor's distribution charges per month consist of a customer charge and a charge per kWh used.
As one of the largest utilities in Texas, Oncor plays a crucial role in the state's energy landscape. It serves more than 420 Texas cities and delivers power to over 10 million Texans, covering part or all of 120 Texas counties. Oncor is responsible for maintaining the poles, wires, and substations that transmit power to homes and businesses.
In addition to its core function of delivering electricity, Oncor also offers incentive programs to help customers save money on their electric bills. These programs include incentives for solar energy, insulation, energy-efficient appliances, and LED lighting. Oncor also provides educational resources to teach children about safety around power lines and equipment.
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Oncor's charges are referred to as delivery, wires, or transmission and distribution charges
Oncor is a Transmission and Distribution Utility (TDU) in Texas, responsible for maintaining and operating the electrical infrastructure that delivers electricity to homes and businesses across the state. Oncor does not generate power or bill customers directly. Instead, it charges the Retail Electric Provider (REP) for delivering electricity, and the REP then bills the customers for the total cost of the electricity used, including the Oncor charges.
Oncor's charges are referred to as "delivery," "wires," or "transmission and distribution" charges. These fees are set by Oncor and approved by the Public Utility Commission of Texas (PUCT). They are included in the electric bill you receive from your REP. The delivery charges consist of two components: a fixed monthly fee of $4.23 and a variable charge based on the amount of electricity consumed, measured in kilowatt-hours (kWh).
The fixed monthly fee covers the cost of maintaining the power grids, power lines, and transformers in Oncor's service areas. It also includes the cost of installing new infrastructure to support growing communities and enhancing the state's renewable energy capacity. Oncor is responsible for constructing transmission infrastructure that connects wind farms to high-demand areas, reducing grid congestion and promoting renewable energy.
The variable charge is based on the number of kWhs used by the customer, multiplied by a rate set by Oncor. This rate is typically around 5 cents per kWh. The variable charge reflects the cost of transmitting electricity specifically to each customer's home or business. It also covers the cost of restoring power during outages and ensuring safe and reliable interconnections.
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You can choose your electric company, but not your utility company
In some states, you can choose your electric company, but not your utility company. This is because the utility company is subject to government oversight and is responsible for maintaining and managing the power grid.
In Texas, for example, Oncor is the utility company that delivers electricity to homes and businesses across the state. Oncor does not generate power or bill customers directly. Instead, customers buy electricity from their chosen Retail Electric Provider (REP) and receive their bill from that REP. The REP then pays Oncor for delivering that electricity, and this charge is passed on to the customer as a "delivery" or "transmission and distribution" fee.
Similarly, in Pennsylvania, you can choose the company that generates your electricity, but it is then fed into the same grid and delivered by Penelec. This means that while you can choose a supplier based on your preferences, such as renewable energy, you cannot guarantee that the electricity that reaches your house is from that specific supplier.
If you live in a deregulated area, you have the power to choose your electric provider. As of 2023, 13 states and the District of Columbia have completely deregulated their electricity utilities, and another five states have partially deregulated their markets. In these areas, consumers can benefit from competitive pricing and more innovative services. However, it is important to note that deregulation may also lead to price manipulation issues.
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Frequently asked questions
You pay the electrical company for the electricity you consume. The electrical company sells electricity plans to consumers.
Oncor is a Transmission and Distribution Utility (TDU) company. You pay Oncor for delivering electricity to your home or business. Oncor's charges are referred to as "delivery," "wires," or "transmission and distribution" charges on an electric bill.
The only way for residential customers to reduce their monthly Oncor charges is to reduce their electricity consumption.
