If you just moved to the Lone Star State, you probably have a lot on your plate. Relocating to a new state, especially one the size of Texas, brings with it plenty of things to learn.
If you’re interested in learning how to live like a local in Texas as soon as possible, we have you covered. We have moving guides for Houston, Dallas, Austin, and San Antonio. If you’re moving to somewhere outside these metro areas, don’t fret — we have you covered with this guide to moving to Texas.
But nearly every new Texan will at some point ask the same question: I just moved to Texas, so why do I need to select an energy provider?
The answer, in just a couple of words, is Texas’s electricity deregulation. We’ll walk you through everything you need to know about energy deregulation in Texas, and answer all of your questions about the deregulated Texas electricity market.
What Is So Special About Texas’s Electricity Market?
In a word: deregulation. Texas’s energy market underwent deregulation at the turn of the century, and while it isn’t the only deregulated electricity market in the United States (a number of states have undergone deregulation), Texas has the largest deregulated energy market.
In addition to deregulation, the Texas power grid is special because it comprises its own distinct electric grid. This grid is called the Texas Interconnection, and unlike every other state in the continental United States, the Texas power grid doesn’t connect to the grid of other states.
This lack of interstate connection means that the Texas Interconnection, operated by the Electric Reliability Council of Texas (commonly abbreviated to ERCOT), isn’t subject to the same oversight from the Federal Energy Regulatory Commission (also known as FERC) that other states’ electric grids have.
ERCOT oversees the day-to-day operation of the Texas power grid and its transmission lines, and helps coordinate the flow of power from power generation sources (like power plants) to end users, like businesses or residential customers.
ERCOT also oversees Texas’s wholesale market, which involves the buying and selling of wholesale electricity.
When Did Energy Deregulation in Texas Begin?
Back in 1999, the Texas Senate passed Senate Bill 7, which deregulated the state’s energy market. In 2002 that law went into effect, and energy deregulation in Texas officially began.
What Does Energy Deregulation in Texas Mean?
Let’s walk through what we mean when we talk about energy deregulation in Texas.
In most states, homeowners and businesses only have one choice for their electricity: their local utility company. If you live in one of these states, you probably don’t think much about choice when it comes to your electric company. You have one option, and you likely only think about it when it comes time to pay your monthly electric bill.
In deregulated Texas though, you have plenty of options: options for electricity plans, options for electricity rates, and most importantly, options for your electricity company. Energy deregulation in Texas means you have the power to choose where and how you get your electricity.
As a result, the Texas electric industry is a free market, with more than 100 retail electricity providers (sometimes referred to as REPs) all competing for business. The Public Utility Commission of Texas (also known as PUCT) oversees this competition, but thanks to energy deregulation in Texas, Texans have a lot more choice when it comes to their power than customers in regulated energy markets enjoy.
Why Is the Texas Electricity Market Deregulated?
Texas has a long history of preferring to operate with fewer regulations. We’ve all heard of the phrase “don’t mess with Texas,” and this sentiment can help us understand why the Texas legislature passed Senate Bill 7 and deregulated the Texas energy market.
Part of the thinking behind the energy deregulation in Texas was the idea that when you increase the number of choices for your electricity, you essentially force these electric utilities to compete for customers’ business.
You’ll notice this when you go to choose an energy provider: There are not only a variety of different power companies to choose from, but you’ll also find a mix of innovative electricity plans and competitive electric rates.
How Much of Texas Is Deregulated?
While the vast majority of the Texas electricity market is deregulated, there are still areas with municipal utilities or cooperatives that were not subject to the deregulation that gave many Texan’s the power to choose their energy providers.
Roughly 85% of the Texas power market is deregulated, which means that 15% of Texans won’t be able to choose among retail electric providers (REPs). But 85% of the state gets to enjoy energy deregulation in Texas, and the many choices for electricity service that come with it.
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Where Can I Get Electricity for My Texas Home?
If you’re an average Texas residential customer, then you’ll be interested in learning how to take advantage of Texas energy deregulation. We have all the tips you need to find the perfect electricity plan for you and your family.
To start enjoying Texas electricity deregulation, you’ll first need to assess your options. By far the best tool for comparing electric companies and their different electricity plans and energy rates is the website PowertoChoose.org.
Power to Choose is a non-biased website run by the Public Utility Commission (PUCT) of Texas, and its purpose is to help customers like you compare the options in their local service area.
To get started, navigate to the site and enter in your zip code. You’ll then be provided with a comprehensive list of the different electricity companies available to you, along with the energy rates they charge and the different electricity plans they offer.
How Do I Choose My Power Company in the Deregulated Texas Energy Market?
Let’s quickly recap everything we’ve learned. Texas chose to deregulate its electricity market at the turn of the 21st century, and this has given most Texans many more options for their power than might be found in a more typical, regulated power market.
You can quickly compare your options for deregulated Texas electricity by using the website PowertoChoose.org, simply by entering your zip code. But how do you choose between different power companies? What makes one electricity plan different from another? How can you find the best electricity rate?
Don’t worry, we’ve got you covered. Let’s take those questions one at a time.
Electricity Plans
Electricity plans in the deregulated Texas power market can come in a variety of shapes and sizes. Generally speaking, there are two distinctions to which you’ll want to pay attention.
Fixed rate plans charge a single rate for electricity for the duration of your plan’s contract. This variety of plans is great for the customer who wants to know what they’re going to pay upfront. You’ll be able to more easily budget for your monthly power bill with a fixed rate plan, because you’ll know what you’ll be charged for the duration of your contract.
Variable rate plans involve a bit more risk, because they charge an electricity rate that will vary according to the fluctuations of supply and demand. On the plus side, this can mean that at times of peak supply or low demand, you’ll pay a bargain rate for your energy, and end up saving money. However, if supply decreases due to outages or blackouts, or if demand spikes due to an especially hot or cold day, you’ll end up paying a premium for your power, which is where the risk comes in.
You’ll likely come across some other innovative electricity plans in the deregulated Texas energy market, including some plans that give customers free nights or weekends. Under these plans, you won’t be charged for energy you use during a specific time of the day or week.
Finally, if you’re concerned about climate change and are interested in powering your home with renewable energy, keep an eye out for green energy plans offered by various Texas energy companies. Typically offered at a premium, these plans help Texans power their homes or businesses with low-carbon renewable energy.
Learn more about the nuances separating different Texaselectricity plans.
Electricity Rates
Electricity rates are easier to compare. Generally speaking, you’ll want to pay the lowest electricity price you can for your energy rate. The lower that electricity price, the lower your monthly bill.
Texas Power Companies
Comparing deregulated Texas power companies can be tricky, especially because you likely live in an area with a wide variety of electricity companies to choose from.
There are a number of ways to go about comparing power companies in Texas’s deregulated energy market. Check out the company’s website to get an idea of the kinds of rates and plans on offer. Read online reviews to see what others are saying about the service the company provides.
Talk to your friends and neighbors to see what their experiences have been like. Finally, pay attention to how long the Texas power companies in your area of the deregulated Texas electricity market have been operating.
What Are the Best Deregulated Texas Energy Companies?
By this point, we’ve learned a lot about Texas deregulation: We know the how, the what, the when, and the why. But now it’s time for the who: Who is the best Texas energy company operating in Texas?
You’ll find a lot of different answers from a lot of different people, in large part because there are so many retail electric providers (REPs) competing for your business in the Lone Star State. Keep in mind that your options for REPs will vary widely, depending on where you live.
That said, three companies stand out among the more than 100 REPs operating in Texas’s deregulated power market. Tara Energy, Just Energy, and Amigo Energy all have years of experience providing reliable electricity at competitive rates, alongside customer service that goes above and beyond to make sure you’re happy with your energy.
Tara Energy in particular has more than 20 years of experience providing Texans with reliable electricity, with energy rates and electricity plans to fit every need.
Find out more about Tara Energy’s services. And if you’d like to learn more about all things energy related, visit the Tara Energy blog.
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