Energy deregulation is a hot topic in Texas. I’m here to give you 10 things that you might not have known about the subject.
The Energy Deregulation Act was passed by the Texas Legislature and signed into law by then-Governor George W. Bush on June 12, 1999. Its intent was to provide energy consumers with energy choices by allowing customers the opportunity to choose between energy providers.
Energy deregulation allows energy customers to select an energy provider other than their regulated utility company, and still receive delivery of electricity directly from the transmission system. Consumers are able to decide if they want retail energy service, or if they continue receiving power from their local utility. Energy Choice is one way that Texas is addressing electricity rates on a state-wide basis through deregulation and market-based pricing. This competition encourages utilities to be efficient and keep prices low, benefiting both residential and commercial energy users alike.
In Texas you have two options when choosing your energy plans; fixed-rate plans where you pay a set price each month regardless of energy usage, or variable rate plans that can fluctuate month to month.
Local utilities will continue to deliver energy. They will be regulated by the Public Utility Commission of Texas (PUCT). The retail energy providers are the companies who deal directly with energy consumers and purchase energy wholesale to then resell.
Before deregulation began in 2002, there were over 40 individual state franchises across Texas. Today there are nine official electricity service areas throughout much of Texas with a total of 48 retail energy providers. All these companies are vying for your business!
There are now 16 electric utilities operating in Texas with retail customers, most of which are investor-owned companies, but some are cooperatives or municipals such as 2 coops and 3 munis).
Energy deregulation is not a new concept. There are energy markets in Europe that have been deregulated for decades and energy customers there enjoy energy choice, competitive prices, and reliability of service.
The process of energy deregulation was an extensive undertaking by the Texas Legislature and PUCT to ensure fair competition between electricity providers while providing energy consumers with energy choices.
Over 80% of Texans have chosen to shop for energy through a Retail Electric Provider (REP). In fact, about 1/3rd of all customers in the state (over 6 million people) will be served by a REP in 2017.
Texas REPs often have the cheapest energy rates in their areas… but not always! So it’s important to shop around – explore the Energy Outlet platform and enter your zip code to find the top REPS in your city and the lowest electricity rates at your address, then compare with the rates available from your current electric utility.
In conclusion, energy choice is a big deal. In Texas, energy deregulation has created energy markets that allow energy customers to shop for energy rates and change energy providers at any time. Energy deregulation in Texas has resulted in energy competition, creating price decreases and more options for energy consumers – this isn’t the case in all states though!