In deregulated electricity markets, suppliers compete to deliver the lowest energy prices. However, they still depend on utilities to deliver electricity from power plants to your home. In fact, even though you receive one power bill each month, you’re really paying two companies. You pay your supplier for the electricity you consume and pay TDU charges to your utility for the cost of delivering it.
TDU stands for Transmission and Delivery Utility. It pays for the upkeep of the wires, poles, transformers, electric meters, and other equipment needed to maintain the electrical grid that powers your home. But because not every consumer places the same demand on the grid, TDU charges are not the same for everyone. The amount you’re charged is based on your “peak demand”: the maximum amount of electricity you consume at one time.
For instance, a family home and a busy nightclub might consume the same amount of electricity over the course of a week. But family homes consume electricity almost continuously, while the nightclub consumes most of its electricity over the course of a few hours.
Consequently, when the nightclub is open, it creates a huge spike in demand. To prevent it from overloading the grid, the utility has to build and maintain more infrastructure and the nightclub pays higher TDU charges as a result.
How to Lower TDU Charges
Because utilities have a monopoly in the region where they operate, you can’t shop around for lower rates. Changing energy suppliers won’t lower your TDU charges either. Suppliers have to contract with your local utility to deliver electricity, so TDU charges are mostly fixed.
They change, but not quickly. They might spike after a natural disaster or slowly decrease if the utility upgrades its equipment, but there is no way to lower them other than reducing your rate of electricity consumption or moving to a new location.
Help Lowering Your Electricity Costs
Agway provides its customers access to the most affordable energy on the market. What’s more, we help you save on repairs to your home’s electrical system. Every Agway customer is automatically enrolled in our EnergyGuardTM program.
When their furnace, air conditioner, or wiring malfunctions, our customers don’t waste time searching for a qualified repairman or worrying about costs. Instead, they call us. We schedule repairs with a local technician, pay for the visit, and provide the new parts. You don’t even pay a service fee! Contact us today and find out how much you can save.
