FAQs for Texas

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What is Deregulation in Texas?

What is Deregulation in Texas?

In the olden days (ya know – last century), only one company took care of your home’s electricity needs, including generation, transmission, distribution, billing, and more. When deregulation (also called energy choice) came to Texas in 2002, the companies responsible for generation, transmission, and retail sales were separated. Now that lots of companies compete for your electricity service, you have the power to choose the company that’s right for you and your home.

A Retail Electric Provider (REP) is any company the Texas Public Utility Commission (PUCT) has authorized to sell electric services to consumers (whether residential or business). For example, if you presently receive an electricity bill from First Choice Power, then we are your REP. A REP is different from the Transmission & Distribution Service Provider (TDSP, also known as the utility company) for your area. The TDSP owns, maintains, and reads the lines, poles, and meters for a given geographic area, as regulated by the PUCT. The REP secures the power you use, the TDSP gets the power to your home. In other words, you can’t choose your TDSP, but you can choose your REP.

5 different TDSPs service the 85% of Texas that is deregulated: Oncor, CenterPoint, Texas-New Mexico Power, AEP North, and AEP Central. This is the company you should contact if there is a power outage in your home.

The Public Utility Commission of Texas is the state agency responsible for regulating and overseeing electric services across Texas. The PUCT regulates the delivery of electricity to make sure your electricity service is safe and reliable. The PUCT protects customers, competition, and electricity infrastructure. We work with the PUCT and TDSP for your area to provide power to your home or business.

But wait! There’s more!

The Electric Reliability Council of Texas (also known as ERCOT) is the corporation comprised and governed by a board of directors from investor and municipally owned electric utilities, generators, independent members, and consumers. ERCOT takes care of the Texas electricity grid. They make sure the TDSP for your area can get the electricity from your REP to your home or business. ERCOT is a membership-based nonprofit corporation subject to oversight by the PUCT.

While most Texans can select the REP they want for their home or business, some locales are served exclusively by either an electric cooperative (also called a co-op) or municipally owned electric utilities.

  • A municipally or city-owned utility is the non-profit electricity provider owned and operated by the municipality it serves. A city-owned utility in Texas may decide whether or not its citizen-customers will enjoy the energy choice provided by deregulation.
  • An Electric Cooperative (also known as a Co-Op) is an electric utility that distributes electricity to its member-owners. If your area is serviced by a Co-Op, that company is the only electricity provider for electricity in that area.

To learn more information about how municipally owned electric utilities and/or co-ops operate, please contact your electricity company (the company that generates your electricity bills) or your city government. They are the people to talk to if you want to bring Texas deregulation to your area.

To determine if you live in a deregulated part of Texas, please contact the company that creates your electricity bill each month.

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