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Exploring Texas Electricity

From the sandy beaches on the Gulf coast to the star-filled skies of the west, people all across Texas, have the ability to choose among electricity rates offered by competing retailers. In 2002, the Texas Senate passed deregulation laws designed to separate the electric industry into a model intended to enhance competition, and give Texans like you the power to choose among electricity suppliers.

By now you've heard a little about how the Texas electricity market functions, but if you're looking for more information, you've come to the right place. Take a few minutes to explore deregulation and how it affects your electricity rates. With just a little research you're sure to come away with a better understanding of the industry surrounding Texas electric service.

What Does Deregulation Mean for Texas Electricity?

Essentially, when lawmakers deregulated the Texas electricity market the industry was broken into three separate parts. Rather than utility companies controlling all aspects of the Texas electricity system, multiple companies contribute to providing your electricity.

Power generation companies own the power plants that produce electricity for Texas residents and businesses. Texas power plants come in various shapes and sizes, depending on which type of energy source they use to create electricity. Once electricity is created, the generation companies sell it to retail electricity companies.

Retail electricity supply companies set electricity rates and design the plans that you have the option to sign up for. If you're interested in a particular retail supplier, they will sell your energy supply directly to you.

Utility companies are responsible for the delivery and transmission of your energy supply. Each area of Texas has a specific utility that transports energy to its residents. Utilities own the infrastructure in their service territory, including the power lines, transformers and meters. You'll still pay your utility company a fee for distribution, but your electricity rates will be determined by the Texas electricity retailer you choose to purchase your supply from.

Texas electric deregulation doesn't actually change anything about how you experience access to electricity. It's still going to be available every time you flip on a switch. The only difference you will see is the electricity rates you'll pay. Deregulation allows you the opportunity to not only shop for a new retail electricity supplier but the best Texas electric rates as well.

Deregulation of Texas Electricity Affects Everyone

After Texas deregulated its energy market, residents were required to choose a retail energy supplier. In other deregulated states, utilities are still allowed to sell energy supply and residents can continue paying its rates. But the Texas government separated the local utility companies from the supply industry completely. Now the utility is solely responsible for the delivery of electricity and maintaining the power lines that get it to you and retail energy providers sell you electricity supply directly.

The major benefit of this type of energy market is the choice it gives to Texas residents. Instead of forcing consumers to settle for one electricity plan, residents get to choose from the electricity rates offered by retailers licensed to operate in their area. This leads to competitive pricing, a wider range of customer service options and new types of electricity plans.

The power to choose affects more than just households. Businesses are also required to choose commercial electricity rates from a market full of competitive retail electricity providers. Some retailers specialize in plans for commercial customers and can even customize an electricity plan to fit the needs of your company. It's easy to find competitive electricity rates for commercial customers – all you have to do is start comparison shopping. The point of deregulating Texas' energy market was to create market conditions that allow everyone the opportunity to find the best electricity rates in Texas. Residential and commercial customers alike can now find great electricity plans!

How to Get the Best Texas Electricity Plan

The key to getting the best Texas electricity plan for your needs is to shop around before you sign on with a retailer. There are so many plans and perks available that comparison shopping is truly an important step to ensure that you find the right Texas electricity plan. It doesn’t matter whether you are a residential or commercial customer, shopping is your best bet at a low electricity rate.

When you start doing your research, make sure you do a quick search for Texas electricity news. New electricity retailers enter the Texas market all the time, and it's always good to see the fresh offers in your area. Compare new companies to the suppliers you're already familiar with to find the best electricity rate in Texas. Make your decision carefully. While new retailers often offer exciting options, they are often designed to help build a large customer base. The start-ups are often hard-pressed to offer the customer service quality that many established companies have accumulated through years of experience.

The important thing to remember when choosing a Texas electricity plan is that your decision should be based solely on what retailer will serve your needs best. Are you looking for the security of a fixed-rate plan or would you rather have a plan that doesn't require an extended contract? Perhaps you're more interested in finding a retailer that offers online account management than one that doesn't require a deposit. No matter what you're searching for, with the right amount of due diligence you're sure to find a retailer that offers your ideal plan.

Common Rate Structures

When you begin shopping around for Texas electricity plans, it's important that you understand a few basic rate structures to help you navigate the options available to you.

Fixed-rate: An electricity plan with a fixed-rate is designed to offer price security. You will pay the same rate for each kilowatt hour of electricity you use for your entire contract term. Your rate is never affected by the season, time of day or overall market demand.

Variable-rate: Electricity plans with variable rates are the opposite of fixed-rate plans. Instead of charging the same rate per kilowatt hour, variable-rate plan charges can fluctuate based on overall market conditions. Variable rates may allow customers to take advantage of market lows when they occur, but they also leave customers susceptible to price spikes if the energy market is less than ideal.

Choosing the right type of electricity plan in Texas is all about personal preference. Do the research, and no matter what, you'll find a solution that works for you!