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How Consumers Benefit from Texas’ Deregulated Energy Market

May 20th, 2025 By Casey Thornton | Fact Checked By EO Test Reviewer

On this page:

  • What is Energy Deregulation?
  • Texas’ Energy Market
  • Consumer Benefits of Texas’ Deregulated Energy Market

What is Energy Deregulation?

Energy deregulation is the process of removing government control over the energy industry. This can be done on a state or federal level. In the United States, deregulation occurred on a state-by-state basis. The goal of deregulation is to create a competitive market in which energy providers must compete for business. Previously these markets were heavily controlled, with the government deciding which providers could provide energy to consumers.

Since energy deregulation, Texans have had the ability to choose an electricity provider based on price, customer service reputation, or other factors that matter most to them. The available providers offer a variety of products – everything from standard, stable rate plans to more dynamic pricing plans.

Before deregulation, Texans received service from a single provider that had monopolistic control of the market and set rates accordingly. Now you have the power to choose! Who doesn’t love that?

Texas’ Energy Market

From 2002 to 2017, Texas has been ranked as the best-performing state for energy in 41 out of 56 years. In 2016 alone, Texans saved $22 billion on electricity bills by using competitive markets rather than older monopolistic regimes. In 2002, Texas created a law that requires citizens to choose an electricity provider from registered retail providers.

Consumer Benefits of Texas’ Deregulated Energy Market

Energy deregulation aimed to create competition and put power back into the hands of consumers. The program worked, and still continues to work, as evidenced by the many consumer benefits gained from deregulation. Here are a few benefits that Texans have gained from the ability to choose their own electricity provider:

Cheaper Energy Bills

Because of deregulation, Texas’s energy market is one of the most competitive in the country. That means more providers battling for your business and providing you with cheaper electricity rates. It also means more options available at lower prices.

Customer Choice

Before deregulation, there were a few select energy companies that provided electricity to Texans. Now you have the ability to choose from a variety of providers! You can also gain access to exclusive benefits from each provider. In addition, these providers must compete for your business. That means they’re more likely to provide you with higher customer service standards.

Small Business Owners Save Money

If you own a small business in Texas, you’ve got options under deregulation. Your company has the ability to choose from a variety of electricity providers and energy plans. In addition, your rates will be lower because of the competition between providers offering cheaper rates to consumers. There are even small business owners that have saved up to 20% on their entire energy bill by making the switch!

Knowledge is Power

Prior to deregulation, you had limited information about electricity providers and prices. Now consumers can research each provider and find plans that best fit their needs. You even have the option of evaluating the market as a whole and deciding whether deregulation is best for your situation.

Now that you know how energy deregulation benefits consumers, it’s time to find an energy plan that’s right for you! It’s easier than you might think. You can check out some of the top providers now that you understand why Texas chose to deregulate markets.

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