Bundled Rate Electricity Plans

What is a bundled rate electricity plan?

A bundled rate electricity plan combines the TDU delivery charges and the electricity provider energy charge into a single electricity rate.  In other words, the two charges are bundled into one.

TDU delivery charges

In Texas, the transmission & distribution utilities (TDUs) are charged with delivering electricity to end users.  The TDUs are different from the retail electricity providers.  The TDUs are regional monopolies and deliver power to everyone in their area of operation regardless of what electric company customers pay their bills to.

The TDUs have a set rate that is charged to every electricity customer regardless of who the retail electricity provider is for that address.  There are two different TDU delivery charges.  One is a fixed dollar amount monthly charge and the other is a per kWh charge.

These charges are passed through to the end customer.  With most electricity plans in Texas, these charges are broken out separately and added on to what the retail electricity provider charges the customer.

Here is an example of the pricing structure of a typical (non-bundled) plan.

Frontier pass through not bundled

This is an Electricity Facts label from the Frontier Power Saver 14 by Frontier Energy.  This plan is priced for the CenterPoint delivery area.  CenterPoint is the TDU that delivers power to Houston and the surrounding area.   There are three pricing components that account for the final electricity rate: TDU delivery charge flat rate, TDU delivery charge per kWh, and the Energy Rate.

The two TDU delivery charges are standard charges for anyone who gets electricity delivered by CenterPoint.  The Energy Rate is what Frontier Utilities charges you for the electricity they are selling you.  The combination of these charges is what makes up your total electricity rate.

Here is an example of what a bundled rate plan looks like

This is the Express Energy Flash Bundled 12 plan.  This also shows the pricing for the CenterPoint delivery area.  Notice that the CenterPoint Energy TDU charges are listed as $0.  But the Energy Charge is much higher to compensate.

Express Energy Bundled Plan

Notice also near the bottom in the Disclosure area that, even though this is a bundled rate plan, your price can change during the contract if the TDU fees change.  TDU rate changes are rare though and they must be approved in advance by state regulators.

Incidentally, this plan is also an example of a bill credit plan.

Is a bundled rate a better deal?

Bundled rates aren’t necessarily any better than non-bundled rates.  It’s really just two different ways of representing the same thing.  The energy charge may appear higher on a bundled plan but that’s just because the rate incorporates the TDU delivery charges rather than having them broken out separately.  To know which plan has best rates you will need to look at final impact to your electricity bill regardless of whether the TDU charges are bundled or passed through as separate line items.