While we never enjoy sharing this news, it's, unfortunately, a decision that's agreed upon between your utility company and the PUCT and completely out of your electricity provider's (Rhythm's) control.
Here are three things you need to know:
Effective September 1, 2024, all utility companies in Texas (CenterPoint Energy, Oncor, Texas-New Mexico Power, AEP Texas Central Company and AEP Texas North Company) increased certain energy delivery rates. This is listed as "Delivery charges per kwh" on your monthly bill.
If you are on a fixed-rate plan, your energy charge with Rhythm Energy does not change. However, since the charges from your utility company are passed through to you, this may impact your overall electricity bill.
Additionally, the new rates are to be applied to all bills issued on or after September 1, 2024, regardless of when the electricity was used. Meaning, even if most of your energy usage occurred in August, the new September 1st rate is applied for the entire billing period.
Each utility company charges the same delivery fees in their respective service territory, regardless of the retail electricity provider serving you. Fees may change if you move to a new utility company territory. The Public Utility Commission of Texas (PUCT) reviews and approves all delivery rate changes.
Here is a more detailed explanation of the different charges on your bill.
Your bill is made up of two basic charges: your energy charge (from Rhythm Energy) and your delivery charges (from your local utility).
Energy Charge: If you are on a fixed-rate contract with Rhythm, this should match your contract rate and does not change throughout the term of your contract. The amount you’ll be billed is based on the amount of electricity used in kWh multiplied by the energy rate on your contract.
Delivery Charges: These charges pay for the maintenance of the poles and wires that deliver electricity to your home and for the meters that measure it. The delivery rates are regulated by the Public Utility Commission of Texas (PUCT).
It's important to note that while your Energy Charge rate is fixed based on your contract, the TDU charges may vary month to month, because there's a fixed component and variable component.
Delivery charge per month (fixed amount): Regardless of how much electricity you consume during your billing period, the same, flat monthly cost will be charged. Usually between $3 and $10 a month.Regardless of how much electricity you consume during your billing period, the same, flat monthly cost will be charged. Usually between $3 and $10 a month.
Delivery charge per kWh (variable based on usage): This is a cents-per-kilowatt-hour rate (determined by your utility company) that is multiplied by how much energy you use during your billing period. This rate varies, depending on which utility company services your home. Usually between 3¢ - 6¢ a month.
On your bill, you see these charges broken out as different line items to show REP (Rhythm Energy) and utility charges:
These utility companies change these rates twice a year—March 1 and September 1 of every year. Each of the regulated utility companies is entitled to collect 100% of their costs from their rate payers because they provide a critical public service: delivering electricity and maintaining the infrastructure. The Public Utility Commission of Texas reviews and approves each utility's rate case. On September 1, 2024, they increased the rates. These delivery rates are passed through to the customer without markup by retail electricity providers like Rhythm.
The new rates are to be applied to all bills issued on or after September 1, regardless of when the electricity was consumed. So, even if most of your energy usage occurred in August, the new September 1 rate is applied for the entire billing period. Given the state's record high usage, the timing couldn't have been more challenging for Texans.
Utility Company | Prior Rate ($/kWh) | New Rate ($/kWh) | % Change |
|---|---|---|---|
CenterPoint | 3.8264 | 5.3500 | 40% |
Oncor | 4.6384 | 5.1893 | 12% |
TNMP | 5.2992 | 6.2927 | 19% |
AEP North | 4.5254 | 5.4758 | 21% |
AEP Central | 4.9027 | 5.8156 | 19% |
This means that if you live in CenterPoint’s service area and used 1,000 kWh, your total bill amount will be ~$15 higher in September 2024 than what it would have been with the previous CenterPoint delivery charge rate even though you used the same amount of energy.
There are currently five utility companies across the deregulated markets in Texas.
CenterPoint Energy – serves the Houston and surrounding area. For more information, or to report a power outage, call 1-800-332-7143. Outage Map
Oncor Electric Delivery – serves the Dallas/Ft Worth and surrounding area. For more information, or to report a power outage, call 1-888-313-4747. Outage Map
American Electric Power (AEP) Texas Central – serves markets including Corpus Christi, McAllen, Laredo and Victoria. For more information, or to report a power outage, call 1-866-223-8508. Outage Map
American Electric Power (AEP) Texas North – serves markets including Abilene, and San Angelo. For more information, or to report a power outage, call 1-866-223-8508. Outage Map
Texas New Mexico Power (TNMP) – serves markets across all of Texas, from Lewisville in north-central TX to League City south of Houston to Fort Stockton in West Texas. For more information, or to report a power outage, call 1-888-866-7456. Outage Map
In our opinion, the best thing you can do as a customer is take steps to improve your home's energy efficiency. After all, if you use less power, delivery rate changes will affect you less. Here is what you can do to help reduce bill shock in the future:
Reduce usage: Of course, there is no substitute for reducing your electricity use. Small changes can help, without you having to sweat and suffer in your own home. Want some ideas for how to use less? Check out our blog post here!
Flatten your bills: To get stability in your monthly bills, we highly recommend our Average Billing program. It's like having your own crystal ball for electric bills and that really helps during the summer. It doesn't decrease your usage, or annual electric costs, but by averaging out your usage over the year, it spares you from any seasonal spikes in your bill. To learn more, read here or sign up with a few clicks by logging into your online Rhythm account.
Pay less by shifting when you use your energy: If you have the ability to adjust when you use energy, our new PowerShift time-of-use plans, can be a game-changer. By aligning energy-intensive activities like running the dishwasher or laundry with these lower-cost hours, you have the potential to make substantial savings. Learn more here.
Read about changes that happened September 2023 here. If you have any questions, feel free to contact us.
