A Texas Co-op Raises Fixed and Demand Charges While Holding Its Energy Rate Flat

CoServ, the electric distribution cooperative serving Denton and Collin counties north of Dallas, has posted a rate change that takes effect on December 1, 2026. The commercial customer charge rises from $30.00 to $40.00 a month. The Time-of-Use Demand customer charge rises from $35.00 to $40.00. The industrial customer charge rises from $55.00 to $70.00. Every industrial rate schedule picks up an additional $0.84 per kilowatt on demand. Public Buildings schedules converge on a $70.00 customer charge.

The price per kilowatt-hour does not change. The cooperative expects the package to lift total electric revenues by about 3 percent.

The structure. Three variables determine a commercial electric bill: the fixed charge that arrives regardless of use, the volumetric charge that scales with kilowatt-hours consumed, and the demand charge that scales with the highest short-interval draw in the billing period. CoServ has raised the first and the third and left the second alone. A customer who reduces consumption by 10 percent in December will see the savings that reduction has always produced, and will absorb the full increase anyway, because none of the new dollars sit on the kilowatt-hour.

That is unusual only in its purity. Utilities across the United States have been shifting revenue toward fixed and demand components for a decade, generally while also raising volumetric rates. Holding the energy rate exactly flat and taking the entire increase in the other two components states the preference without ambiguity.

Who absorbs what. The distribution of the increase depends on which schedule a customer sits on. For a commercial account billed on customer charge and energy alone, the change is $10 a month, or $120 a year, and there is no operational response available. Consumption reduction does not touch it. The charge is a condition of having a meter.

For an industrial account, the arithmetic runs differently. The customer charge contributes $15 a month, or $180 a year. The demand adder of $0.84 per kilowatt scales with the account’s billed peak, and at commercial and industrial scale the billed peak is the larger number by a wide margin. An account with a sustained peak in the hundreds of kilowatts pays the demand adder many times over relative to the fixed increase. The cooperative has therefore concentrated the increase on the accounts with the most capacity to manage it, and on the one bill component those accounts can manage through dispatch rather than through curtailment of output.

What the notice does not resolve. The published notice states the industrial increase as a single $0.84 per kilowatt figure applied across industrial rate schedules. It does not break that figure out by component for schedules that carry more than one demand charge. Customers on time-of-use industrial service will see the component-level allocation on the December statement. The notice also does not disclose the underlying rate levels against which the $0.84 is measured, so the percentage effect on any individual demand charge is not derivable from the notice itself. Those figures sit in CoServ’s published rate schedules and should be read directly by any customer modeling the change.

The cooperative’s regulatory position. CoServ is a member-owned distribution cooperative operating in the ERCOT footprint. Its rate changes reach customers through a notice posted to its tariffs and filings page rather than through a contested proceeding with a public record. The cooperative has scheduled a member meeting on the increase for November 19 at CoServ headquarters, twelve days before the new rates apply.

Why North Texas. Denton and Collin counties sit directly in the path of the Dallas-Fort Worth commercial build-out. Warehouse, light industrial, retail and office construction in that corridor has added connected load at a pace that drives distribution capital spending, and distribution capital is the cost category that fixed and demand charges are designed to recover. A cooperative adding customers and circuits faster than it is adding kilowatt-hours per customer has a structural reason to move revenue off the volumetric rate: the costs it is incurring do not scale with consumption.

That logic is not specific to CoServ. It describes the position of most utilities serving fast-growing commercial corridors, which is why the rate design question generalizes well beyond one cooperative’s December filing.

The signal for load management. When a utility raises the volumetric rate, efficiency investment and load reduction both earn a return. When a utility raises the demand charge and holds the volumetric rate flat, efficiency investment earns exactly what it earned before, and only peak reduction captures any part of the new money. The two measures are not substitutes under that structure. A lighting retrofit, a motor replacement or a controls upgrade that cuts total consumption without changing the shape of the load curve will not respond to this increase at all.

The $0.84 per kilowatt adder is, in isolation, a small number. For a 300 kilowatt account it is $252 a month before considering anything else on the bill. The figure matters less than the direction. CoServ has told its commercial and industrial members, in the plainest available form, which number on their bill it intends to charge them for going forward.

The calendar. The member meeting is November 19 at CoServ headquarters. The rates take effect December 1, 2026. Customers who want to understand the component-level effect on their own service will need the applicable rate schedule alongside twelve months of billing demand history, neither of which the summary notice supplies.

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