Electric bill breakdown: what every charge on your bill means

By the kWhCompare Editorial Team · Updated October 2, 2026 · 5 min read

An electric bill breakdown has four basic parts: the energy (supply) charge for the power you used, the delivery or TDU charge to move it to your home, a fixed base fee, and any taxes or regulatory fees. In deregulated states like Texas, a retailer bills for energy while a separate utility bills for delivery on the same invoice.

The four parts of every electric bill

No matter which state you live in or who sends your bill, you're almost always paying for the same four things. They just get grouped and labeled differently depending on whether you live in a deregulated or regulated state.

• Energy (supply) charge — the cost of the actual electricity you used, usually billed per kilowatt-hour (kWh).
• Delivery charge — the cost of moving that electricity through poles, wires, substations and meters to your house.
• Base or customer charge — a flat monthly fee charged no matter how much electricity you use.
• Taxes and regulatory fees — state, local or utility-specific charges added on top.

Once you can spot these four pieces, a confusing bill turns into a simple math problem. Here's what each one actually covers.

The energy charge: what you're paying for the electricity itself

This is usually the biggest line on your bill. It reflects the price per kWh in your plan or rate, multiplied by how much electricity you used that month. If your plan charges 15 cents per kWh and you used 1,100 kWh, your energy charge is about $165 before anything else is added.

In deregulated states, this is the charge your retail electricity provider sets, and it's the main thing that changes when you switch plans. In regulated states, it's set or approved by the state utility commission and bundled with delivery into one rate. If you're comparing offers, what counts as a good price per kWh depends heavily on your state and usage level.

The delivery charge: what the wires and poles cost

Delivery charges (sometimes called transmission and distribution, or TDU charges in Texas) pay for the physical grid: the lines, transformers, meters and crews who fix outages. This part of your bill doesn't change when you switch energy suppliers, because the same utility owns the wires no matter who sells you electricity.

Delivery charges typically have two pieces: a small fixed monthly amount and a per-kWh rate that scales with usage. In Texas, these rates are set by the Public Utility Commission of Texas and update twice a year, on March 1 and September 1.

Texas TDU delivery charges by utility

Here's what the five Texas utilities (TDUs) currently charge for delivery, shown as a fixed monthly fee plus a per-kWh rate, with the total delivery cost at 1,000 kWh of usage.

For a full rundown of how these charges are calculated and when they change, see our guide to Texas TDU delivery charges.

The base charge: your flat monthly fee

This is a set dollar amount you pay just for having an active account, regardless of how much electricity you use. It typically shows up twice on a Texas bill: once from your TDU (shown in the table above) and once from your retail electricity provider as a plan's base fee, if it has one. Some plans skip the retail base fee entirely and build everything into the per-kWh price instead, which is one reason two plans with the same advertised rate can cost differently at your actual usage.

Taxes and regulatory fees

Depending on where you live, your bill may include state sales tax, local franchise fees, or small regulatory assessments that fund the state utility commission or energy assistance programs. These vary by city and state, so there's no single national number to point to. If your bill suddenly jumped and you can't explain it with usage alone, check whether a new tax or fee line appeared, and see our guide on why your electric bill is so high for other common causes.

Deregulated vs. regulated bills: how the breakdown differs

In regulated states, one utility handles generation, delivery and billing, so your bill usually shows a single blended rate per kWh with delivery and energy combined. You can't shop around because there's only one provider.

In deregulated states, the energy charge and delivery charge come from two different companies, even though they appear on one bill. Texas, Pennsylvania, Ohio, Illinois, New York, New Jersey, Maryland, Massachusetts, Connecticut, Delaware, Maine, New Hampshire, Rhode Island and Washington, D.C. all allow residential customers to choose their energy supplier, while the local utility still owns the wires and bills for delivery. A handful of states, including Michigan, Virginia, California, Oregon and Nevada, offer limited choice programs rather than full deregulation.

If you're in Texas, every plan is required to publish an Electricity Facts Label (EFL) that shows the average price at 500, 1,000 and 2,000 kWh, which makes it much easier to compare the energy portion of different offers. Learn more in our guide on how to read an Electricity Facts Label.

Worked example: reading a 1,000 kWh Texas bill

Let's break down a typical Texas bill for a home that used 1,000 kWh in a month, served by CenterPoint Energy's delivery area.

1. Start with the all-in average rate. The Texas average residential rate is 15.94 cents per kWh, so a 1,000 kWh bill averages 1,000 × $0.1594 = $159.40 total.
2. Pull out the delivery charge. CenterPoint's delivery cost at 1,000 kWh is a $4.99 fixed fee plus 1,000 × $0.04972 = $49.72, for a total of $54.71.
3. Subtract delivery from the total. $159.40 − $54.71 = $104.69. This remainder covers your retail provider's energy charge, any plan base fee, and applicable taxes.
4. Check the math makes sense. $104.69 ÷ 1,000 kWh works out to about 10.5 cents per kWh for energy, base fee and taxes combined, which is a realistic range for a competitively priced Texas plan.

This same method works for any utility or usage level: take the total bill, subtract the known delivery charge for your TDU, and what's left is the energy, base and tax portion controlled by your retail plan. If your usage runs higher or lower than 1,000 kWh in a typical month, compare against our guide on how many kWh a house uses per month to see where you stand.

What to do next

Once you know which part of your bill is energy and which is delivery, you can focus your effort where it actually moves the needle. Delivery charges are fixed by regulation and won't change no matter who you buy electricity from. The energy charge is where switching plans, timing your contract, or adjusting usage habits can save real money.

• Pull your last bill and separate the delivery line from the energy and base charges using the steps above.
• Compare your current energy price against current offers for your area using the rate comparison tool on kWhCompare.
• If you're on a Texas fixed plan, check whether you're inside the window to switch without an early termination fee using our guide on the best time to switch electricity providers in Texas.
• If your bill still looks unusually high after accounting for delivery and taxes, work through our checklist on why your electric bill is so high.

Frequently asked questions

Sources

• Public Utility Commission of Texas (puc.texas.gov)
• U.S. Energy Information Administration, Electric Power Monthly (eia.gov)

Figures are checked against these sources when each guide is updated. See how we research and calculate. This guide is for general information and isn't financial advice.