Texas TDU Rate Hike 2026: What Commercial Buyers Should Do

The News

Two cost increases are hitting Texas commercial electricity bills simultaneously this summer. The Public Utility Commission of Texas (PUCT) approved delivery rate increases from Oncor and CenterPoint, the state's two largest wires companies, and ERCOT is forecasting a record summer peak of 92,211 MW. For commercial buyers, the Texas commercial electricity TDU rate hike 2026 is the part of the story that usually gets missed: TDU delivery charges are non-bypassable, set by regulators, and unaffected by switching retail providers. The only real protection is understanding your pass-through exposure and planning for peak demand events before July. This article connects the rate hike, the record peak forecast, and your contract structure into one cost picture, because they all land on the same bill in the same quarter.

What Happened: Two Cost Pressures in One Quarter

The rate hike and the demand forecast are separate events with one shared destination, your invoice. The PUCT approved Oncor's base rate increase in spring 2026, with new delivery rates taking effect on billing cycles starting June 1, 2026. Oncor estimates the change adds roughly 3 percent to a typical residential bill, about $7 per month at 1,000 kWh. CenterPoint received a parallel increase, approximately $5 per month on the same residential basis, per the Q2 2026 market update. Those residential figures understate the commercial impact. TDU charges for commercial accounts are billed on a combined demand and energy structure, and Oncor's filings note that customer cost allocations are being updated to reflect growth among large commercial and industrial (LC&I) customers, which shifts a larger share of delivery cost recovery onto bigger loads.

Separately, ERCOT's summer 2026 forecast projects peak demand of 92,211 MW, roughly 8 percent above the 2023 all-time record of 85,464 MW and well above the 83,679 MW reached in 2025. The primary driver is data center and industrial load growth. ERCOT's planning reserve margin sits near 18 percent, with about 18.9 GW of battery storage now connected to the grid, according to EIA grid data. The timeline matters: the delivery rate hike reaches bills in May and June cycles, while the ERCOT peak window runs July through August.

What the Texas Commercial Electricity TDU Rate Hike 2026 Means for Your Bill

The rate hike reaches you through the delivery side of your bill, and there is no way to shop it away. In Texas retail choice, you negotiate your supply rate with a retail electric provider (REP), but TDU delivery charges are set by tariff and PUCT rate case. If your contract carries TDU pass-through language, the increase already flowed through automatically, with no separate notice.

On pricing, a fixed supply rate is not a fixed bill. Only an all-in bundled contract that locks both the supply and delivery components shields you from a TDU increase. A fixed-supply-only contract signed before April 2026 does not. On demand charges, the record peak forecast is what raises the stakes. A hotter, higher-load summer increases the odds that ERCOT's four coincident peak (4CP) intervals land on extreme July and August weekday afternoons, and your facility's demand during those intervals sets your transmission charges for the following year. The exposure is not evenly spread: offices and retail running afternoon HVAC, warehouses and cold storage cycling compressors through the heat, and light manufacturing on weekday shifts all peak when the grid does. Data centers are the structural driver pushing the entire curve higher, the same cost-shift dynamic we covered in our analysis of Abbott's data center grid cost order. The 18.9 GW of ERCOT battery storage, about 37 percent of US capacity, improves reliability and may blunt the most extreme wholesale price spikes, but it does nothing to lower your TDU delivery charges. For context on how fast Texas is adding capacity, see this review of the state's power buildout.

The Commercial Buyer's Q2 2026 Bill Review Checklist

Before you renew or sign, run these five line items against your current invoice and a bill from twelve months ago. Together they tell you how much of the rate hike you are already paying and how exposed you are to the summer peak.

1. TDU delivery line items. Locate your Oncor or CenterPoint distribution and transmission charges, then compare them to the same lines on a bill from twelve months ago to quantify the delivery increase at your actual usage.
2. TDU territory. Confirm whether you sit in Oncor territory (North and Central Texas, DFW, West Texas) or CenterPoint territory (greater Houston). The hike amounts and rate structures differ by wires company.
3. Contract type. Determine whether you hold a fixed-supply-only contract or an all-in bundled contract. Only the all-in version locks delivery charges.
4. Pass-through language. Check whether your contract passes PUCT-approved TDU changes through automatically, and identify the date that language took effect.
5. 4CP exposure. Identify whether your load peaks between 3 PM and 7 PM on summer weekdays. If it does, model a scenario where ERCOT sets a new record and your demand charge resets higher for a full year.

If you want an independent benchmark to check your delivery-adjusted rate against, pull the current published commercial rate data for your TDU territory before the summer peak.

What You Should Do Before the July Peak

The checklist tells you where you stand. These steps tell you what to do about it, and the timing is the point: the rate hike is already on bills while the peak window is still ahead, so the decisions you make in June are cheaper than the ones you scramble to make in August.

1. Quantify the delivery increase per site. Use the twelve-month bill comparison to put a dollar figure on the TDU hike at one location, then multiply across every Texas site you operate.
2. Get pass-through terms in writing. Ask your REP whether your contract includes TDU pass-through language and when it took effect, and request the answer in writing rather than over the phone.
3. Budget for the hike if you are fixed-supply-only. If your contract locks supply but not delivery, your total bill is not fixed. Build the increase into your summer forecast now.
4. Model 4CP exposure before July, not during it. Run a record-peak scenario against your interval data while you still have time to plan curtailment for the actual peak days.
5. Evaluate curtailment and demand response now. Enrollment windows for this summer are closing. Our ERCOT demand response checklist for summer 2026 walks through the options.
6. Compare an all-in quote at renewal. If your contract renews in 2026, weigh an all-in fixed quote against your current fixed-supply-plus-pass-through structure before the summer peak adds upward pricing pressure.

Questions to Ask Your REP or Broker

The right questions move the regulatory and weather risk onto your provider's side of the table instead of leaving it on yours. Bring these to your next renewal or mid-term review:

• Does my current contract include pass-through language for TDU delivery rate changes approved by the PUCT, and when did that language take effect?
• Am I on a rate structure that includes 4CP demand charges, and what was my peak interval during ERCOT's highest demand hours last summer?
• What is the all-in delivered price per kWh on my current contract versus a new all-in fixed quote today?
• With ERCOT projecting a record summer peak, is there a demand response or interruptible service program that could offset demand charges at my facility?
• If ERCOT sets a new all-time peak and wholesale prices spike, am I exposed or hedged under my current contract structure?

Frequently Asked Questions

What is a TDU delivery charge, and can I avoid it by switching REPs?

No. TDU (transmission and distribution utility) charges are set by the PUCT and collected by the wires company that owns the poles and lines in your area, such as Oncor or CenterPoint. Switching retail providers changes your supply rate, not your delivery charges. Every commercial bill in a given territory carries the same TDU rates regardless of which REP you choose.

How much did Oncor and CenterPoint raise rates in 2026?

The PUCT approved the increases in spring 2026, effective on billing cycles starting around June 1. Oncor's change adds roughly $7 per month on a 1,000 kWh residential basis, about 3 percent. CenterPoint's is approximately $5 per month on the same basis. Commercial customers pay on a separate demand-and-energy structure, so the per-site dollar impact is typically larger than the residential figure suggests.

What is the 4CP demand charge, and why does the ERCOT summer peak forecast matter?

Four coincident peak (4CP) refers to the four 15-minute intervals with the highest ERCOT-wide demand across June, July, August, and September. Your facility's usage during those intervals determines your transmission demand charge for the following year, a mechanism explained in this overview of commercial demand charges. When ERCOT forecasts a record summer peak, the odds rise that those intervals occur at extreme demand levels on hot weekday afternoons, which can lock in a higher demand charge for twelve months.

Does a fixed-rate contract protect me from the TDU rate hike?

Only if it is an all-in bundled fixed rate. A fixed-supply-only contract locks the energy component but lets TDU delivery charges pass through separately, so your total bill still rises when the PUCT approves a delivery increase. Confirm which type you hold before assuming you are protected, and review the trade-offs in our guide to fixed versus variable contract structures.