34.6 Percent: CenterPoint's September 30 Delivery Rider Increase Hits Houston Commercial Classes Harder Than Residential
A Texas PUC administrative law judge approved CenterPoint's interim Rider DCRF increase in Docket 59981, effective for meters read on and after September 30, 2026. Primary Service rises 34.6 percent against 24.1 percent for residential, but the real per-kWh impact depends almost entirely on load factor.
CenterPoint Energy Houston Electric's distribution delivery charge rises for every Houston rate class on September 30, 2026, and the increase is not spread evenly. Primary Service, the class serving larger commercial and industrial sites, goes up 34.6 percent. Residential Service goes up 24.1 percent. A Texas PUC administrative law judge approved the interim rates in Docket 59981 on August 17, and they apply to meters read on and after September 30.
Key takeaways
- A Texas PUC administrative law judge approved CenterPoint's unopposed motion to raise its Distribution Cost Recovery Factor, known as Rider DCRF, on an interim basis for meters read on and after September 30, 2026.
- Primary Service rises 34.6 percent and Secondary Service above 10 kVA rises 26.7 percent, against 24.1 percent for Residential Service.
- The commercial classes are billed per kVA of monthly demand rather than per kWh, so a larger percentage increase does not automatically mean a larger cents-per-kWh increase.
- Converted to cents per kWh, the added delivery cost falls below the residential increase for any account above roughly 24 percent load factor on Secondary Service, or roughly 15 percent on Primary Service. Below those thresholds a commercial account absorbs more per kWh than a house does.
- The rates are interim and subject to reconciliation against the final approved tariff, so the September 30 figures can still be trued up in either direction.
What is Rider DCRF, and what changes on September 30, 2026?
Rider DCRF is the Distribution Cost Recovery Factor, the tariff mechanism that lets a Texas transmission and distribution utility recover distribution plant investment between full rate cases. It is a delivery charge, not an energy charge. CenterPoint bills it to the retail electric provider, and the provider passes it through to the end customer.
On August 17, 2026, a Texas PUC administrative law judge approved CenterPoint Energy Houston Electric's unopposed motion to implement its proposed DCRF increase on an interim basis. The interim rates become effective for meters read on and after September 30, 2026, under Public Utility Commission of Texas Docket 59981.
Interim is the operative word. The approved figures are charged until a final tariff resulting from CenterPoint's DCRF application takes effect, and they are subject to reconciliation to the extent the interim rates differ from the final tariff rates.
How much does each CenterPoint rate class go up?
The table below shows the current rate and the interim rate for each class, taken from the Docket 59981 filing. Note that the billing unit changes by class, which is the detail that drives everything downstream.
| Rate class | Billing unit | Current | Interim, on and after 9/30/26 | Increase | Percent |
|---|---|---|---|---|---|
| Residential Service | per kWh | $0.004944 | $0.006137 | $0.001193 | 24.1% |
| Secondary Service above 10 kVA | per billing kVA | $0.796213 | $1.008963 | $0.212750 | 26.7% |
| Primary Service | per billing kVA | $0.371995 | $0.500784 | $0.128789 | 34.6% |
| Transmission Service | per 4CP kVA | $0.009819 | $0.012172 | $0.002353 | 24.0% |
| Lighting Service | per kWh | $0.084803 | $0.108003 | $0.023200 | 27.4% |
Primary Service takes the largest percentage increase of the five at 34.6 percent. Lighting Service, which covers the unmetered outdoor and parking-area lighting that many commercial properties carry as a separate account, rises 27.4 percent and tends to go unnoticed because it is a small line on a secondary bill.
One caution before reading too much into those percentages. This is a percentage increase on one rider, not on a whole bill. Rider DCRF is a single line inside the delivery portion of a commercial invoice, and the delivery portion itself is only part of the total.
Why do the commercial classes rise more than residential?
Because the rider is allocated across rate classes rather than applied evenly, and this cycle the demand-billed classes drew a larger proportional share than the energy-billed classes.
The allocation follows the cost study set out in CenterPoint's filing. Primary Service and Secondary Service above 10 kVA both rise faster than Residential Service, while Transmission Service, billed on four coincident peak kVA, rises the least at 24.0 percent.
That allocation outcome is genuine, and it is also where most coverage of a rate change stops. For a buyer, the percentage is not the number that matters. The number that matters is what the change adds per kWh consumed, and that depends on how the class is billed.
What is billing kVA, and why does it change the math?
Billing kVA is a measure of apparent power demand, the peak draw an account places on the distribution system during a billing period. Residential accounts and the smallest commercial accounts, those under 10 kVA of demand, are billed on energy, meaning per kWh. Accounts above 10 kVA are billed on demand, meaning per kVA of billing demand. Transmission-level accounts are billed on four coincident peak kVA.
That distinction decides who actually feels this increase. A per-kWh increase scales with consumption, so every kWh costs the same amount more. A per-kVA increase is fixed against peak demand, so the more kWh an account buys against the same peak, the smaller the increase becomes per kWh.
What does the increase actually cost per kWh?
Between roughly $0.00025 and $0.00194 per kWh for the demand-billed commercial classes, depending almost entirely on load factor.
Converting a demand charge into a per-kWh figure requires one input: how many kWh the account buys per unit of billing demand each month. An average month holds about 730 hours, so monthly kWh per billing kVA is roughly 730 multiplied by load factor.
Load factor is average demand divided by peak demand over the period. A warehouse that runs two shifts has a high load factor. A church, an events venue, or a seasonal retailer with a big air-conditioning spike has a low one.
| Monthly kWh per billing kVA | Approximate load factor | Secondary above 10 kVA adds | Primary adds |
|---|---|---|---|
| 109.5 | 15% | $0.001943 per kWh | $0.001176 per kWh |
| 182.5 | 25% | $0.001166 per kWh | $0.000706 per kWh |
| 292.0 | 40% | $0.000729 per kWh | $0.000441 per kWh |
| 401.5 | 55% | $0.000530 per kWh | $0.000321 per kWh |
| 511.0 | 70% | $0.000416 per kWh | $0.000252 per kWh |
The residential increase is a flat $0.001193 per kWh, which gives a reference line to compare against. Two crossover points follow from it:
- A Secondary Service account above 10 kVA absorbs more per kWh than a residential customer below about 178 kWh per billing kVA per month, which is roughly 24 percent load factor.
- A Primary Service account absorbs more per kWh than a residential customer below about 108 kWh per billing kVA per month, which is roughly 15 percent load factor.
Above those thresholds the arithmetic inverts. A Primary Service site running at 40 percent load factor picks up about $0.000441 per kWh, roughly a third of the residential increase, despite carrying the 34.6 percent headline.
One caveat makes the table conservative. Billing kVA exceeds kW whenever power factor is below unity, so an account with a 0.90 power factor buys fewer kWh per billing kVA than its load factor alone implies. Poor power factor pushes the real per-kWh impact above the figures shown.
For scale, the median commercial rate across the 2,096 active CenterPoint-area plans in the texascommercialplans.com catalog is about $0.065 per kWh. A Secondary Service account at 25 percent load factor will absorb roughly 1.8 percent of that median in new delivery cost. The same account at 70 percent load factor will absorb about 0.6 percent.
The TxCP Rider Conversion Test
Three steps turn any TDU rider change into a number a buyer can act on.
- Find the billing determinant. Read the delivery section of a recent invoice and identify whether the account bills on kWh, on billing kVA, or on 4CP kVA. This is printed on the bill, and it sets which row of the rate table applies.
- Divide consumption by demand. Take twelve months of kWh and billing kVA from past invoices. Divide monthly kWh by monthly billing kVA to get kWh per unit of demand. Use the worst month, not the average, because that is the month that hurts.
- Divide the rider increase by that figure. The result is the added cost per kWh. Compare it against the energy rate under contract to size it honestly.
An account that lands above the residential reference line has a demand problem, not a procurement problem. Shopping the energy rate will not fix a low load factor, and the next rider increase will land the same way.
Does a fixed-rate contract protect you from this?
No, and this is the most common misreading of a delivery rider change.
A fixed-rate commercial contract fixes the energy component. Delivery charges set by the utility and approved by the Public Utility Commission of Texas are a regulated pass-through. Two contract structures behave differently, and both leave the buyer exposed:
- An energy-only quote excludes TDU delivery charges entirely. They arrive as separate line items and move whenever the tariff moves.
- A bundled or all-in quote folds an estimate of delivery charges into a single rate, but these almost always carry a change-in-law or regulatory pass-through clause that lets the provider adjust when a tariff changes.
The practical step is to read the pass-through language before assuming a fixed rate is fixed. A contract signed in August at a bundled rate built on the current DCRF figures can legitimately be adjusted for the September 30 change.
Are these rates final?
No. They are interim rates, approved so CenterPoint can begin collecting while the docket proceeds, and they are explicitly subject to reconciliation against the final approved tariff.
That cuts both ways. If the final tariff lands below the interim figures, the difference is reconciled. If it lands above them, the same mechanism applies. A buyer modeling 2027 delivery costs should treat the September 30 numbers as the current best estimate rather than a settled input, and should expect a further adjustment when the final tariff takes effect.
What should a Houston commercial buyer do now?
- Identify the rate class and billing determinant on the most recent invoice before estimating any impact. The class decides which increase applies, and guessing it wrong changes the answer by a factor of three.
- Run the conversion test on the worst month of the last twelve. A single bad demand month sets the billing kVA that the rider multiplies against.
- Read the delivery pass-through clause in any contract signed recently or currently under negotiation, and confirm whether the quoted rate was built on pre-September 30 delivery figures.
- Treat a low load factor as the actionable finding. Demand management, staging equipment starts, and correcting power factor all reduce the billing determinant the rider is applied to, which is the only lever a buyer controls here.
- Compare delivery exposure across utilities when siting or expanding. Houston delivery charges and rate design differ from those in the Oncor territory, a gap covered in the CenterPoint versus Oncor TDU spread analysis.
- Watch the docket for the final tariff, since the reconciliation will change the number again.
Rider DCRF is a reminder that the delivery side of a Texas commercial electricity bill moves on a regulatory calendar that has nothing to do with when a supply contract was signed. The energy rate is the part a buyer negotiates. The delivery rate is the part a buyer has to measure.
Source documents: the Docket 59981 DCRF application and the interim rate filing on the PUCT interchange, the Public Utility Commission of Texas electric rates and tariffs resource, the DCRF rule itself at 16 TAC 25.243, ERCOT load profiling documentation for load-factor methodology, trade coverage of the approval from EnergyChoiceMatters, and national price context from the EIA Electric Power Monthly. Further market coverage is collected in the daily market news archive.
Frequently Asked Questions
Does Rider DCRF apply to my energy rate or my delivery charge?
It applies to the delivery charge. Rider DCRF is a Distribution Cost Recovery Factor billed by CenterPoint Energy Houston Electric to the retail electric provider, which passes it through to the end customer. It is separate from the energy rate negotiated in a supply contract.
Will my fixed-rate contract change on September 30, 2026?
The energy component stays fixed, but the delivery component can move. An energy-only quote excludes TDU delivery charges entirely, and a bundled or all-in quote almost always carries a change-in-law or regulatory pass-through clause that lets the provider adjust when a tariff changes.
How do I find my billing kVA?
It is printed in the delivery section of the monthly invoice. Accounts above 10 kVA of demand bill on billing kVA rather than kWh, and transmission-level accounts bill on four coincident peak kVA. The billing unit determines which row of the DCRF rate table applies.
How much does the increase actually cost per kWh?
For the demand-billed commercial classes it runs from roughly $0.00025 to $0.00194 per kWh depending on load factor. The residential increase is a flat $0.001193 per kWh. A Secondary Service account above 10 kVA absorbs more per kWh than a residential customer only below roughly 24 percent load factor.
Are the September 30 rates final?
No. They are interim rates, approved so CenterPoint can begin collecting while Docket 59981 proceeds, and they are subject to reconciliation against the final approved tariff. The figures can be trued up in either direction once the final tariff takes effect.