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Understanding the World of Texas Power

If you're interested in understanding what the world of Texas power is all about, there are several things to consider. First, the unique extent of the state's power grid makes Texas an interesting area within the larger United States power structure. Second, if you want to understand Texas power, you have to examine all the types of Texas power companies. Lastly, there's a lot to learn about how elements of the Texas power system operate on a daily basis.

Over the past few years there has been some controversy over the regularity at which elements of the grid go down - called rolling blackouts. Electric rates have also seen some of their highest levels in history during the past few years. Many people blame this situation on an aging power grid and greedy officials, but there's not just one way to explain the world of Texas power.

In short, the full story of Texas power is a complex one.

Wait. There are different types of Texas power companies?

Yes, there are. Texas has a deregulated electricity market, meaning that Texas power companies are broken into several categories: Generation companies, utility companies and Texas power suppliers. Prior to deregulation, all of these companies were rolled into one - the utility. Beginning in the 1970s, American politicians began looking at deregulation of major industries as a catalyst for generating increased competition. As a result, many states across the country have now embraced deregulation in the energy industry, though Texas was one of the first to make it mandatory for customers to choose a supplier.

What does each type of Texas power company do?

Each category of Texas power company contributes in a different way to delivering electricity to your home or business. Generation companies produce electricity, Texas power suppliers sell retail electricity to consumers, and utility companies deliver electricity to individual homes and businesses.

Texas is famous for the oil industry, but the climate of the state has also led to an ever-increasing number of generation companies that harness renewable resources to generate electricity. All over West Texas, wind farms have been popping up like wildflowers over the past decade, and likewise the prevalence of sunny days makes many areas of Texas ideal for solar array installations.

Today there are dozens of retail Texas power suppliers serving customers in various utility service territories. These Texas power suppliers are the competition arm of deregulation, and in that sense they are the crux of why deregulation was instituted in the first place. By giving consumers more choice, in theory the price of everyone's electricity supply comes down as companies compete against one another for customers. In practice, that has not always been the case in Texas.

Once a customer has purchased energy from a retailer, he also has a relationship with a utility. Utilities have preset service territories, and consumers do not have a choice between them. Wherever you live or conduct business, you have a designated utility that owns the means of delivering power to you. As with any other energy industry, deregulated or not, the utility is the company that you call in Texas if you experience an outage or have an electrical emergency.

Together, these Texas power companies make up the operational end of the power grid for the vast majority of Texas. But understanding the world of Texas power is more than just understanding what each type of Texas power company adds to the mix.

Taking a closer look at the Texas power grid

Getting a true understanding of what Texas power is all about requires taking a closer look at how each Texas power company is able to provide electricity to its customers: the grid. When describing the Texas power grid, it's important to examine the national power grid as a whole to see just how Texas factors in to the system. In fact, there is not a unified power grid system that serves the entire United States, in part because of the sheer immensity of the territory and equally as a result of different areas being electrified at different times.

In the United States there are three major power grids that when taken as a whole span the entirety of the continental 48 states with some overflow into neighboring Canada and Mexico. These zones are known as the Eastern Interconnected System, the Western Interconnected System and the Texas Interconnected system. From the names of the zones alone it's easy to see why the Texas power grid is unique. Rather than being a network spanning several states, the Texas power grid serves only the electricity needs of the Texas territory, although its area does not precisely follow state lines.

Texas power on the grid is controlled by the Electric Reliability Council of Texas. ERCOT is in charge of setting the Texas market's standard variable pricing as well as approving the development of power generation facilities. ERCOT is also in charge of determining the price cap for electricity to prevent pricing from getting out of control during times of peak demand.

Of all the institutions that catch the most heat from problems within the power grid for Texas, it's ERCOT. Because of the fact that the organization is the head of all regulation in the deregulated market, it makes sense that if there's an issue with the supply of electricity or pricing, people will turn against the governing body that established the rules.

No matter what your opinion on ERCOT, the Texas power system is an amazing example of the different ways the electricity industry can be ordered and maintained. If you're interested in learning more about how you can choose a retail provider for your home or business in Texas, just spend some time here on You'll find all sorts of information that can help you locate the plan you've been looking for. No matter what plan you choose, be sure to shop around before you sign up with any particular company to ensure you're getting the best deal.