Texas Electricity Companies
Since 2002, electricity in Texas has been deregulated. This means that a
majority of Texans can shop around for an electricity provider like they can for
insurance and other services. They have the power to choose the company that
fits their needs best-whether that means the company with the lowest rates, the
one with the best service, or one whose contracts afford them some added
flexibility. So how does it all work? And what does it mean for Texans?
Before deregulation, the utilities dominated Texas electricity services. They
were responsible for the generation, sale, transmission, and distribution of the
electricity that found its way into homes and businesses. Post-deregulation,
competing Texas electricity companies are responsible for purchasing and selling
the electricity to consumers. Retail electric providers (or REPs) are the
companies that you deal with. They sell you electricity and provide for most of
your customer service needs. The way that the power actually gets to you is the
same no matter which REP you choose. Transmission and distribution service
providers are local companies that maintain the poles and wires that deliver
your electricity. These providers also check your meter and are responsible for
electrical emergencies and restoring power during outages.
Breaking the electricity business down into these smaller pieces is
beneficial to you, the consumer, you now have the power to choose. It means that
your specific needs can possibly be met better than they were in the regulated
days. Say, for instance, using renewable energy is really important to you. In
the old days, there would be nothing you could do about it if your utility did
not provide such an option. You would be stuck using the same provider as
everyone else in your area. But with deregulation, you can search for a company
that shares your beliefs. You can find a provider that uses wind, solar, or some
other renewable energy source. Multiple providers result in many more options
i.e. your power to choose.
Picking the right REP for you is an important decision. Before you even start
calling around, you should sit down and figure out your specific needs. What
kind of contract would work best for you? Some providers have month-to-month
contracts, while others have contracts that last years. Some REPs offer fixed
rates while others only have variable prices. This can be a tricky decision.
While fixed rates sound great-especially since you'll be paying the same unit
rate in the hot summer months as you are during the winter-but they can work
against you if rates drop. On the other side of the coin, variable prices are
great when electricity rates are low, but your price is likely to go up when
market prices rise which is typically occurs in the summer when your usage is
also the highest.
Once you know your needs, there are specific questions you should have ready
for the providers you look into. You will probably want to know whether or not
they require a deposit. You also should ask about payment options and about what
happens if you miss a payment. You may also want to ask about what penalties
they have if you break your contract and whether there are any other monthly
fees you should take into consideration.
With choices you have the responsibility to make decisions for yourself.
While it can be frustrating and a bit confusing at times, more choices are
better than no choice at all. The deregulation of electricity in Texas has
certainly given you and many other Texans the power to choose.