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[Signal, Switch] Update to Tariff Modeling in Texas
August 22nd, 2025 by Mika Tal
Texas Transmission and Distribution Utility (TDU) rates will be updated September 1, 2025 with the following changes:
- Contracted supply rates (Typical Retail Energy Rate lookup) will be remodeled to reflect a more accurate value by including only the generation costs from the Energy Fact Label published on the Power to Choose site.
- Transmission and Distribution rates will be updated to transaction type = IMPORT, as generation cannot be credited against them.
The changes will result in a rate drop for the following TDU tariffs:
- AEP Texas Central Company
- AEP Texas North Company
- CenterPoint Energy Houston Electric, LLC
- Oncor Electric Delivery Company, LLC
- Texas-New Mexico Power Co
Background Terminology:
- Typical Energy Retail Rate: A large majority of Texas operates as a deregulated energy market, where consumers choose their Retail Electric Provider (REP) while delivery is managed by a handful of Transmission and Distribution Utilities (TDUs). Given the number of REPs and the frequency at which they offer new, custom contracts, Signal does not capture a single Supply rate for the tariffs associated with the Texas TDUs. Instead, we calculate a Typical Energy Retail Rate based on zip codes. This Typical Retail Rate is updated monthly and acts as a proxy for the supply cost in a given region. It is, however, important to note that typical rates are an average and will not reflect the supply price for any specific contract. For more information about how to model contracted rates in Signal please visit Arcadia’s docs site (Contracted Rates How-to-Guide) or contact your account manager to discuss private tariffs.
- Transaction Type: The Arcadia tariff model uses Transaction Types to govern the rules by which power flow (consumption and generation) is credited and debited in the rate engine calculator. Updating the T&D rates on Texas TDU tariffs to IMPORT, ensures we do not incorrectly offset transmission and distribution costs with generation credits.
- BUY: Charges based on net usage within a charge period, not allowing for excess generation.
- SELL: Credits based on net usage within a charge period, not allowing for excess generation.
- NET (NM): Charges or credits based on net usage within a charge period, allowing for excess generation.
- IMPORT/EXPORT (API view: BUY_IMPORT/SELL/EXPORT): Charges or credits based on instantaneous netting, relevant for dual registered meters.