34.6 Percent: CenterPoint's September 30 Delivery Rider Increase Hits Houston Commercial Classes Harder Than Residential
The Public Utility Commission of Texas approved CenterPoint's Rider DCRF increase as final in Docket 59981 on November 5, 2026, at the same rates charged on an interim basis for meters read on and after September 30, 2026. Primary Service rose 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 went up for every Houston rate class on September 30, 2026, and the increase was not spread evenly. Primary Service, the class serving larger commercial and industrial sites, rose 34.6 percent. Residential Service rose 24.1 percent. The Public Utility Commission of Texas approved those rates as final in Docket 59981 on November 5, 2026, at the same figures charged on an interim basis since September 30, so no true-up of the interim period is coming.
Key takeaways
- The Public Utility Commission of Texas issued its final order on CenterPoint's Distribution Cost Recovery Factor, known as Rider DCRF, on November 5, 2026, effective for meters read on and after September 30, 2026. An administrative law judge had first approved the rates on an interim basis on August 14, 2026.
- Primary Service rose 34.6 percent and Secondary Service above 10 kVA rose 26.7 percent, against 24.1 percent for Residential Service. The smallest commercial class, Secondary Service at or below 10 kVA, rose 21.8 percent.
- The larger 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 above 10 kVA, or roughly 15 percent on Primary Service. Below those thresholds a commercial account absorbs more per kWh than a house does.
- The final rates are identical to the interim rates, so the order finds no true-up of the interim period is necessary. CenterPoint filed the compliance tariff on November 9, 2026.
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 14, 2026, a Texas PUC administrative law judge issued Order No. 6, approving CenterPoint Energy Houston Electric's unopposed motion to implement its proposed DCRF increase on an interim basis. The rates took effect for meters read on and after September 30, 2026, under Public Utility Commission of Texas Docket 59981.
On November 5, 2026, the Commission issued its final order and approved the rates CenterPoint proposed as final, effective for scheduled meter read dates on and after September 30, 2026. The order approves an annual DCRF revenue requirement of about $352.3 million, an incremental $72.3 million over the rates approved in CenterPoint's previous DCRF case, Docket 59424, after adjusting for load growth. CenterPoint filed the clean compliance tariff on November 9, 2026.
How much does each CenterPoint rate class go up?
The table below shows the rate in effect before September 30 and the final rate for each class, taken from CenterPoint's rate transparency filing and the November 9, 2026 compliance tariff in Docket 59981. Note that the billing unit changes by class, which is the detail that drives everything downstream.
| Rate class | Billing unit | Before 9/30/26 | Final, on and after 9/30/26 | Increase | Percent |
|---|---|---|---|---|---|
| Residential Service | per kWh | $0.004944 | $0.006137 | $0.001193 | 24.1% |
| Secondary Service at or below 10 kVA | per kWh | $0.004508 | $0.005490 | $0.000982 | 21.8% |
| 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 six 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.
The one commercial class that rose less than residential is the smallest. Secondary Service at or below 10 kVA, the class for the smallest commercial accounts, rose 21.8 percent, or $0.000982 per kWh.
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 some commercial classes rise more than residential?
Because the rider is not applied evenly. The tariff formula spreads CenterPoint's added distribution revenue requirement across classes using allocation factors fixed in its last base-rate case, Docket 56211: 57.7950 percent to Residential Service, 31.7602 percent to Secondary Service above 10 kVA, 6.4661 percent to street lighting, 2.3438 percent to Primary Service and wholesale distribution, 1.4407 percent to Secondary Service at or below 10 kVA, and 0.1942 percent to Transmission Service. Each class's share is then divided by that class's own billing determinants.
Under that formula, with the allocation factors unchanged since Docket 56211, the differences between classes come from how each class's billing determinants changed between DCRF filings. This cycle Primary Service came out highest at 34.6 percent, Lighting Service and Secondary Service above 10 kVA followed, Residential Service and Transmission Service landed near 24 percent, and Secondary Service at or below 10 kVA rose the least at 21.8 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 at or below 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. A small commercial account at or below 10 kVA needs no conversion: its increase is a flat $0.000982 per kWh, about 18 percent less than the residential increase.
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 was about $0.065 per kWh when this analysis was first published on September 25, 2026. A Secondary Service account above 10 kVA at 25 percent load factor absorbs roughly 1.8 percent of that median in new delivery cost. The same account at 70 percent load factor absorbs 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 pre-September 30 DCRF figures can legitimately be adjusted for the September 30 change.
Are these rates final?
Yes. The Commission's November 5, 2026 order finds that the final rates are identical to the rates approved on an interim basis in Order No. 6, concludes that no true-up of the interim rates is necessary, and approves the Rider DCRF tariff for scheduled meter read dates on and after September 30, 2026. Because nothing changed, the order also finds that no further notice to retail electric providers is required.
The order carries one refund item, and it belongs to the previous DCRF case. About $1.1 million in system resiliency costs that were inadvertently included in the interim rates approved in Docket 59424 is deferred as a regulatory liability, with carrying charges at 6.606 percent, to be returned to customers in CenterPoint's next full base-rate case. It does not change the September 30 figures.
The order also leaves one question open by design. It does not decide whether the underlying distribution investments were prudent. The Commission reserves that for the DCRF reconciliation under 16 TAC 25.243(f) and notes that the opportunity for a hearing comes in CenterPoint's next base-rate proceeding. For a buyer modeling 2027 delivery costs, the September 30 figures are now a settled input. The order identifies this as CenterPoint's second DCRF application of 2026, and PURA 36.210 allows two per calendar year, so CenterPoint's next DCRF application cannot come before 2027.
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.
- Budget 2027 delivery costs on the final September 30 figures. Docket 59981 is decided, so the next movement in this rider comes from a new DCRF application or CenterPoint's next base-rate case.
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, the Order No. 6 interim approval, the rate transparency filing, the administrative law judge's proposal for decision, the Commission's November 5, 2026 final order and the November 9, 2026 compliance tariff 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 interim 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?
Yes. The Public Utility Commission of Texas approved them as final in Docket 59981 on November 5, 2026, at the same figures charged on an interim basis since September 30, and the order says no true-up of the interim rates is necessary. CenterPoint filed the compliance tariff on November 9, 2026.
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