Texas · Oncor
Oncor delivery charges, and the rules that set them
Oncor’s delivery charge is what it bills to carry electricity over its wires to your premises — separate from the electricity itself, which your retailer sells you. You cannot shop it: Oncor owns the only wires in its territory. Rates changed on June 1, 2026, and for a commercial account the headline rate matters less than three rules in the filed tariff that almost nobody publishes.
Every figure on this page is read from the Oncor Tariff for Retail Delivery Service, §6.1.1.1, effective June 1, 2026. Reviewed at the start of each month.
What changed in June 2026
Two things moved in opposite directions. The fixed monthly charge went down, from $4.23 to $4.06. The per-kilowatt-hour charge went up, from $0.056183 to $0.036043 — a rise of -35.8%.
Most coverage quoted the residential case at 1,000 kWh, where it comes to a few dollars. But the cut is a flat $0.17 that never grows, and the increase applies to every kilowatt-hour, so it does.
| Monthly usage | Change per month | Change per year |
|---|---|---|
| 1,000 kWh | +$-20.31 | +$-243.72 |
| 5,000 kWh | +$-100.87 | +$-1210.44 |
| 20,000 kWh | +$-402.97 | +$-4835.64 |
The break-even is about 34 kWh a month — less than an empty apartment uses. In practice nobody came out ahead on this change.
The three service classes
Oncor bills residential, secondary service at or below 10 kW, and secondary service above 10 kW. The first two are billed on kilowatt-hours. The third is not, and that is the single most consequential fact on this page.
| Class | Fixed per month | Distribution charge | Billed on |
|---|---|---|---|
| Residential | $4.06 | $0.036043 | kWh |
| Secondary, 10 kW or less | $6.70 | $0.031236 | kWh |
| Secondary, above 10 kW | $44.99 | $6.931363 – $9.831092 | Billing kW |
Crossing 10 kW multiplies the fixed charge by 6.7 and changes what the bill is computed from. A business that grows past the threshold gets a bill calculated a different way, and nothing on the bill says so.
Rule one: your rate depends on how evenly you use power
Above 20 kW, Oncor sets the distribution charge by annual load factor — your yearly consumption divided by what you would have used running at your peak the whole time. A steady operation scores high. One with a few busy hours scores low.
| Annual load factor | Per billing kW | Against the best band |
|---|---|---|
| 0% – 10% | $9.831092 | +41.8% |
| 11% – 15% | $8.924995 | +28.8% |
| 16% – 20% | $8.590196 | +23.9% |
| 21% – 25% | $8.318122 | +20.0% |
| 26% and above | $6.931363 | — |
Two businesses on the same street, both peaking at 40 kW, can therefore pay materially different delivery bills:
| Profile | Annual kWh | Load factor | Distribution per year |
|---|---|---|---|
| Spiky — a warehouse with a few busy hours | 45,000 | 12.8% | $4284 |
| Steady — a shop open predictable hours | 100,000 | 28.5% | $3327 |
The load factor is computed once, from the twelve billing months ending in December, and then applies for the following twelve months. It is not something you can improve mid-year, and it uses your highest peak across those twelve months as the denominator — so one bad month sets the figure for the year that follows.
Rule two: the class is sticky
Once a premises is assigned to the over-10 kW rate it stays there until it has completed 12 consecutive billing months with no recorded demand above 10 kW. Not twelve months on average — twelve consecutive, with the counter resetting on any single month that goes over.
A business that briefly ran extra equipment, or had one unusually hot month, is on the more expensive basis for at least the next year, and pays the $44.99 fixed charge every month of it.
Rule three: the ratchet, which punishes improvement
Above 20 kW with a load factor over 25%, the kilowatts you are billed for are not this month’s peak. They are the greater of this month’s peak and 80% of your highest peak in the previous eleven months. A single busy month keeps being charged for almost a year.
This creates a trap that runs against every piece of energy advice a business is normally given. Pushing load factor above 25% earns the cheapest rate per kilowatt — and switches the account onto the ratchet at the same time. For a premises with a 100 kW summer peak, billing a quiet 40 kW month:
| Annual load factor | Billed on | Rate per kW | Distribution charge |
|---|---|---|---|
| 25% | 40 kW | $8.318122 | $332.72 |
| 26% | 80 kW | $6.931363 | $554.51 |
One percentage point of load factor raises this bill by 67%, even though the rate per kilowatt fell 17%. The ratchet doubled the quantity being billed. Whether you are better off either side of that line depends on the shape of your year, and nothing on the bill tells you the trade exists.
One more detail worth knowing: riders NDC, DCRF, RCE, ISR and MG carry the 80% ratchet regardless of load factor. The exemption below 25% shelters the distribution charge only.
What to check on your own bill
- Find the TDU or delivery section — it is separate from your retailer's energy charge, and it is the half no supplier quote can change.
- Check whether you are billed per kWh or per kW. Per kW means you are on the over-10 kW class, and the rules above apply to you.
- Work out your annual load factor: last year's kWh divided by your highest peak kW times the hours in the year. That tells you which band you should be in.
- Compare the billing kW on your bill against your actual metered peak. If the billed figure is higher, the ratchet is running.
- If you crossed 10 kW once and have been under it since, count the months. Twelve consecutive puts you back on the cheaper class — but only if someone asks.
We price Oncor from the filed tariff. CenterPoint, AEP Texas and Texas-New Mexico Power we do not price yet, and we would rather say so than imply coverage we do not have.
Send us an Oncor bill and we’ll check the class, the band and the ratchetCommon questions
What is an Oncor delivery charge?
It is what Oncor bills for carrying electricity over its poles, wires and meters to your premises. Oncor does not sell you electricity — your retail provider does that, and then passes Oncor's delivery charge through on the same bill. Delivery is approved by the Public Utility Commission of Texas and is the same whichever retailer you use.
Why did my Oncor delivery charge go up in June 2026?
Oncor's rates were revised effective June 1, 2026. The fixed monthly charge fell from $4.23 to $4.06, and the per-kWh charge rose from $0.056183 to $0.036043 — a rise of -35.8%. Because the cut is a flat $0.17 and the increase applies to every kilowatt-hour, anyone using more than about 34 kWh a month pays more.
Can I switch away from Oncor?
No. Oncor owns the wires in its service area and there is no competing set. You can change your retail electric provider, which changes the energy half of the bill, but the delivery half stays with Oncor regardless.
What happens when my business goes over 10 kW?
The basis of the bill changes, not just the amount. Below 10 kW everything is billed per kilowatt-hour. Above it, the distribution charge and several riders are billed per kilowatt of demand instead, and the fixed monthly charges go from $6.70 to $44.99. Nothing on the bill announces the change.
Why do two businesses with the same peak demand pay different rates?
Because above 20 kW Oncor bands the distribution charge by annual load factor — how evenly you use power across the year. The worst band pays $9.831092 per kW and the best pays $6.931363, a spread of 42%. Two premises with identical peaks can sit in different bands purely because one runs steadily and the other runs in bursts.
What is the 80% ratchet?
For accounts above 20 kW with an annual load factor over 25%, the kilowatts you are billed for are the greater of this month's peak or 80% of your highest peak in the previous eleven months. A single busy month therefore keeps being charged for almost a year, even through months when you barely used anything.
Does improving my load factor lower my bill?
Not always, and this is the part that surprises people. Crossing 25% earns the cheapest per-kW rate but simultaneously switches the account onto the 80% ratchet. For a premises with a 100 kW summer peak billing a quiet 40 kW month, moving from 25% to 26% load factor takes the distribution charge from $332.72 to $554.51 — up 67%, because the ratchet doubled the kilowatts being billed.
If I drop below 10 kW, do I go back to the cheaper rate?
Not immediately. A premises assigned to the over-10 kW rate stays there until it completes 12 consecutive billing months with no recorded demand above 10 kW. One busy month can therefore cost a full year on the more expensive basis.
What is the Nuclear Decommissioning Charge on my bill?
It funds retiring nuclear generation facilities safely. It appears in Oncor's tariff for every rate class, but the current factor is $0.000000 — it is billing nothing at present, despite being listed as a charge in most explainers.