Texas Deregulation Means Electricity Choice

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The Texas energy market has been deregulated since 2002, and that means that consumers have a choice when it comes to picking an energy plan for their home or business. Prior to 2002, utilities determined the price of electricity, but now retail energy providers (REPs) purchase shares of electricity and sell it to you. This allows you to choose what provider you want, based on what they offer.

Before deregulation, prices were pretty well fixed and relatively high priced. After, competing REPs try to beat each others’ prices, resulting in cheaper electricity. There is also a wider variety of plans available to choose from, including plans that are based on green energy. This power to choose has invigorated the market and allows for more rapid expansion of service. Since they are no longer tied down by a single option, people can choose plans with a lower rate, green energy, or different contract lengths.

Though they no longer determine the cost of energy, utilities still play an important role in the energy industry. The REPs purchase shares of energy from generation facilities such as coal power plants or wind farms. You pay the REP for your energy, based on your plan. Part of that money goes to the utility as they are the ones that actually send the energy to you, whether it be electricity or natural gas. The utility also maintains the power lines that transmit electricity to you, and you should contact them if you experience an outage.

Ultimately, deregulation brings freedom of choice to the citizens of deregulated states, including Texas. It allows consumers to determine what amount of service they require and pay for that amount. All REPs offer different plans with varying rates, electricity content (renewable or nonrenewable energy), contract length, and other factors. The Electricity Facts Label (EFL) is required for every plan offered by a REP and it gives you a breakdown of cost, including utility costs, taxes, fees, and credits, as well as other information like how much of your electricity comes from renewable energy sources. With this knowledge, a consumer can make an informed decision as to what electricity plan they need.

 

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