Located in the high plains of the West Texas panhandle, the city of Lubbock, Texas is known as a hub of live music, Texan wines, and various industries like education, health care, and construction. As such a hub of activity, it’s no wonder that Lubbock is known as the “Hub City.”
But beyond its attractions and inviting lifestyle, Lubbock, Texas, is now set to join the ranks of deregulated energy markets in the Lone Star State as of mid-2023. That means residents will be able to choose their own electricity provider.
But with this power to choose comes responsibility. It requires time, research, and know-how to sift through the information and get a solid understanding of energy deregulation.
To help you through the process, we’re sharing what you need to know about Lubbock energy deregulation and how to ensure you make the best choice possible when it comes to selecting an electric company.
What Is Energy Market Deregulation?
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Broadly speaking, deregulation refers to a process by which controls and restrictions are lifted on a given industry. Today, many energy markets in the United States are regulated and it helps to understand what this means.
In a regulated energy market, the price of electricity will be set by an entity such as a local government body or a public utility commission. Consumers are required to buy their power from a local utility company instead of being offered the choice to shop among competing electricity service suppliers for the best price.
This local utility may even own the power plant where electricity is generated as well as the transmission lines it travels down on its way to your home or business. This means that if there’s a power outage or other problem, you’ll have to contact the local utility.
Deregulated energy markets, by contrast, are where retail electricity providers (REPs) compete to offer the lowest prices on electricity. For instance, in the state of Texas, there are more than 130 REPs. Ultimately, prices are not set not by the government but by retail energy providers that will compete for your business.
This electric competition is an important part of how markets operate and tends to lead to more affordable power.
Are There Benefits to a Deregulated Electricity Market?
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When retail energy providers have to compete in an open market, the result tends to be lower prices, more options, and better service. In a bid to attract customers and make a profit, REPs might experiment with different contract structures, fee arrangements, and incentives.
For example, as clean energy has become such a hot topic over the past few decades, competitors in deregulated energy markets have worked out discounts, tax breaks, and various other ways of helping customers who want more of their energy to come from renewable energy sources like wind and solar.
Switching to Deregulated Electricity
Up until now, electricity in Lubbock, Texas has been provided by Lubbock Power & Light (LP&L), but that’s changing soon. On February 15, 2022, LP&L’s Electric Utility Board voted to voluntarily switch to a deregulated market, the first time a municipally-owned utility company has done so since Texans began deregulating electricity markets in 1999.
This means that customers will soon be able to choose which retail energy provider they purchase their electricity from in a competitive electricity market (rather than having no option but to use LP&L).
Historically, this wouldn’t be the first time residents of Lubbock could choose among retail energy providers. There were once two Lubbock electricity providers — LP&L and the Southwestern Public Service Company (SPS). LP&L bought SPS’s distribution infrastructure in 2010 and has been the sole energy provider ever since.
When Does the Energy Market Open to Residents of Lubbock, Texas?
If everything goes according to plan, by the summer of 2023, the energy market in Lubbock should be deregulated. Once this happens, customers will have the option to choose from a variety of different retail energy providers.
Why Is Lubbock Switching to ERCOT?
The Electric Reliability Council of Texas (ERCOT) operates an electric grid responsible for some 90% of the electric load in the Lone Star State. It handles power scheduling, financial settlement, and much of the responsibilities involved in making sure electricity reliably makes it to where it’s needed.
Moving to ERCOT would mean all Lubbock residents are on the same power grid, where they can avail themselves of competitive prices for electricity.
Is Lubbock on the ERCOT Grid?
Yes and no. Back in 2021, Lubbock moved 70% of its citizenry onto the ERCOT grid, with the other 30% being served by SPS. As of 2022, there were ongoing negotiations to end the SPS contract and finally move everyone in Lubbock to ERCOT.
When Did Lubbock Switch to ERCOT?
The majority (70%) of Lubbock’s residents switched to ERCOT in 2021, with the rest planned to be moved over by late 2023 before full deregulation occurs.
What Area Does ERCOT Cover in Texas?
ERCOT’s 52,700 miles of transmission lines cover three-quarters (75%) of the total area of Texas. This includes major cities, like Austin and Forth Worth, and parts of the panhandle.
What Are the Deregulated Areas of Texas?
Though most of the deregulated areas of Texas are covered by ERCOT, the two maps aren’t identical. The city of Austin, for example, uses the ERCOT grid but it still has a regulated energy market overseen by Austin Energy, a publicly-owned utility.
A list of the deregulated parts of Texas would include prominent cities like Dallas, Houston, San Antonio, and Corpus Christi.
What Can I Do to Switch Energy Providers in Lubbock, Texas?
When it’s time to make the switch, LP&L will let its customers know. If you live in Lubbock and are waiting for an announcement, be sure to monitor local news sources and the LP&L website directly.
You’ll have a chance to pick a new electricity provider by the given deadline. However, if you don’t choose an energy provider, you’ll be placed with a Provider of Last Resort (POLR).
You can think of a Provider of Last Resort as being akin to an energy grid safety net meant to serve customers who don’t have a retail energy provider or who otherwise need emergency access to power. Like other kinds of safety nets, it’s meant to be used rarely and only for a short period of time. It’s not a substitute for establishing a relationship with a REP.
Also, bear in mind that service from a Provider of Last Resort tends to be comparatively more expensive. Planning around the needs of an unknown number of emergency clients whose electricity loads are hard to forecast is a real challenge, and that’s reflected in the price.
You can still switch providers after deregulation, but you might have to pay an early cancelation fee if you had a long-term contract. Be sure to check the terms of your existing electricity plan to see how this works and whether it applies to your situation.
What Happens If I Don’t Want to Switch Electricity Providers?
The beauty of electric competition is that you have the ability to choose between different electricity suppliers. Besides the benefit of potentially lower energy bills, this electricity choice also means that you have more options and a better chance to find an energy plan that’s right for you.
That said, there’s no rule saying that you must switch providers after electricity deregulation occurs. If you like your retail electricity provider, you can keep them. But you do have to make sure that they’re going to continue offering service after the switch occurs. Check their website or contact them directly to see whether they’ll continue providing electricity to your area after deregulation takes effect.
How Do I Choose an Electricity Plan Once Lubbock Deregulation Happens?
While deregulation will bring competition to the electricity market in Lubbock, Texas, the basic procedure for choosing an electricity plan remains the same. Ultimately, you need to assess your electricity needs and find a plan that meets them at a price that’s comfortable for you.
Some plans will be relatively simple and easy to understand, others will have tiered pricing that charges much less for power used during low-demand times (such as late at night or early in the morning), and some will involve a commitment to provide power from renewable energy sources.
The key to success will be spending the time to compare the different options offered by REPs in your area. You’ll also need to know about the different types of energy rates so you can make an informed decision.
What Are the Different Types of Energy Rates?
There are many different ways to structure an electricity plan, but there are two broad types of energy rates that it’s worth knowing about.
- Fixed-rate: As its name implies, a fixed-rate plan has a single, consistent rate charged for each kilowatt-hour (kWh) you use. The benefit of a fixed-rate plan is that it’s easy to budget around and you know exactly what to expect with your electricity bill.
- Variable-rate plan: A variable-rate plan will have a price-per-kWh that could fluctuate up or down depending on a variety of different factors. This means that you might have an unusually low energy bill some months, and conversely, you could have an unusually high energy bill other months.
What’s an Electricity Facts Label?
An Electricity Facts Label (EFL) is a summary of the electricity rates and contract terms offered by a particular retail energy provider. If the REP you’re considering does not have an EFL, do not sign a contract with them.
It’s Time to Find Good Electricity Rates in Lubbock, Texas
With a major bid for energy market deregulation in the works, residents of Lubbock will soon be able to avail themselves of the same benefits to energy choice that many other Texans (and Americans) enjoy.
You might want to learn more about topics, like the Texas power grid, as part of your research. With more choices being offered in the open market than ever before, you have a great chance of finding a plan that suits your needs.
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