Index
Consumer ProtectionTexas, USA

Texas Deregulated Electricity Market

Summary

Most of Texas operates on a deregulated energy grid (ERCOT). This means consumers are legally required to choose their own private retail electricity provider, rather than having a single government-assigned utility company.

Rights & Rules

  • 01.
    If you live in a deregulated area (like Houston or Dallas), you MUST shop around and pick a Retail Electric Provider (REP) to buy your electricity from.
  • 02.
    You have the right to choose between fixed-rate plans (where the price per kWh stays the same for your contract) or variable-rate plans (where the price fluctuates with the market).
  • 03.
    The physical power lines are still maintained by a single local utility company (like CenterPoint or Oncor), so you cannot switch the company that actually delivers the power, only the company that bills you.
  • 04.
    Some areas of Texas (like Austin and San Antonio) are EXEMPT from this law and still use traditional city-owned monopolies.

Penalties

  • 01.
    If you fail to choose a provider when moving into a new home, you will be placed on a default 'Provider of Last Resort' plan, which is usually much more expensive.

Verified Citations

Texas Utilities Code Chapter 39 (Restructuring of Electric Utility Industry)

Source
"The legislature finds that the production and sale of electricity is not a monopoly warranting regulation of rates, operations, and services... retail customers should be given the option of choosing their provider of electricity..."