For Electricity, Texas Residents Finally Have the Power to Choose
As many of you already know, the introduction of Texas Senate Bill 7 in 2002 effectively deregulated electricity in Texas. Electricity rates are now determined by the free market, and as a result consumers in many areas have an increased freedom to choose between electricity providers in Texas.
Before choosing between the many electricity providers in Texas, an electricity comparison is in your best interest. There are a number of different entities that supply consumers with electricity in Texas, and it’s important to understand how each approaches the market.
Texas electricity rates vary between providers
By fostering competition, electricity deregulation allows consumers to choose between Texas electricity rates. Before electricity in Texas was deregulated, the system in place was the same as it is in many places: one utility company held a virtual, if not an actual, monopoly on the energy market.
Today, electricity providers in Texas take the form of many retail electric providers. REPs purchase electricity for Texas from power generation companies at wholesale rates. These generation companies produce electricity for Texas in a number of ways, from coal-fired plants to wind farms.
It breaks down like this:
- In Texas, electricity rates are negotiated between the consumer and an REP.
- Each customer chooses between the electricity providers in Texas that each purchase power in bulk from a generation company.
- Once a deal is struck, traditional utilities deliver electricity to Texas homes via existing infrastructure.
By separating the entities of the production of electricity in Texas, consumers are able to benefit from increased competition. This setup also allows for new structures for determining Texas electricity rates. Rather than Texas electricity rates fluctuating from month to month, certain REPs allow customers to enjoy a fixed supply rate.
In Texas, an electricity comparison could result in the freedom to choose your rates
Each REP has a different structure for determining its rates because of the contracts that each has with generation companies in Texas. An electricity comparison allows consumers to explore the options available to them, in order to choose the REP that suits their needs best.
Choosing the right REP often comes down to the options each presents to residents in Texas. Electricity rates are available in several forms, but how are they different?
Variable rates: These are similar to the rates that consumers were subjected to prior to deregulation. As one would expect, these rates change over time based on the fluctuations of the energy market. Even if you choose a variable-rate plan, some REPs offer additional incentives to help limit severe ups and downs on your Texas electricity rates.
Fixed rates: One of the primary benefits of allowing REPs to purchase electricity for Texas residents in bulk is the energy can be sold at fixed rates. Rather than depending on a volatile market to determine their rates, consumers who take advantage of these rates can choose a plan that guarantees them the same charge per kilowatt hour for the duration of an agreement.
Neither of these approaches is necessarily better than the other. There’s always the possibility that one of the rate options will yield better savings on electricity in Texas than the other, but the freedom to choose is what makes the biggest difference in Texas. An electricity comparison is the first step, and from there it’s hard to say how much you could save on your electricity in Texas.
What happens if I lose electricity in Texas?
Despite the efforts of scores of engineers, power outages are inevitable in particularly severe storms. In the deregulated markets of Texas, any problems that residents have with their access to electricity are handled by the existing utility companies.
That’s because the utility companies still own the infrastructure that delivers electricity to Texas homes. From the power lines to crews that know how to repair them in an emergency, utilities still operate as an important part of the energy system in Texas.
Take your time and choose the provider that’s right for you in Texas
Your head might be spinning from all the details that are now part of choosing an energy provider, but the benefits of deregulation far outweigh any fleeting confusion. That’s because it’s finally possible to choose where you purchase your electricity in Texas.
If you are passionate about reducing your carbon footprint, there are REPs out there that place an emphasis on using as many renewable energy sources as possible. If you’re more concerned with saving money on your electricity in Texas, there are plenty of opportunities for you to let REPs compete for your business.
Start exploring the options that are available to you in Texas today and take full advantage of living in one of the most competitive places for energy production in the nation.