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Texas Electricity Deregulation: What Does That Mean?

deregulation

Even though you might have lived in Texas for your entire life, that doesn't mean you pay much attention to the electricity, oil, and gas markets. This is especially true when it comes to understanding what Texas electricity deregulation really means and how it affects you. So, we're happy to explain!

Before Texas Electricity Deregulation

Before Texas electricity became deregulated, it was regulated by the state government. The electricity rates were set by the Public Utility Commission of Texas (PUCT), and there was only one provider of the electricity service in each market - the utility company. That single company was responsible for generating, transmitting, distributing and selling to the consumer. With there being only one company that provided electricity for each city, this basically created a monopoly.

Ending Regulation

Why change what had been "working" for many years? Well, back in 1999, the Texas Legislature thought that by passing a deregulation law, they could get rid of electric company monopolies and reduce government control of electricity rates. The idea was that multiple Retail Electricity Providers (REPs) would create competition, and competition would drive energy prices down. And the bill passed!

Living with Texas Electricity Deregulation

Since then, the majority of Texas has become deregulated. Passage of the law allows consumers to choose who they buy their power from - just like they can choose your cell phone or cable provider. This allowed for competition for the retail component of your electricity service and spurred the creation of multiple REPs.

You can find a current list of providers on a website called PowerToChoose.org or Electricity Choice Texas. These website will help you conduct price comparisons between various retail electricity providers in your area to find what's right for you.

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