Texas is unique in the U.S. electricity landscape. Rather than being locked into a vertically integrated utility, most Texans can choose their electricity supplier. Deregulation has spurred competition among dozens of retail electric providers (REPs), encouraged green-energy innovation and kept prices below the national average.
However, the state’s power market can be confusing because it contains a mixture of deregulated and regulated territories. This guide breaks down how the market works in 2025, where deregulation applies, recent changes such as Lubbock joining the competitive market, and how to choose the right electricity plan.
The map below illustrates the split between deregulated and regulated territories. Counties highlighted in color represent deregulated service areas and show which TDU serves that county. Areas shown in grey are regulated. Because municipalities can vote to opt in to deregulation—Lubbock being the most recent example—residents should check their ZIP code on a comparison site or with the PUCT to confirm their status.
Electricity deregulation separates the generation, transmission and distribution functions of a vertically integrated utility. In Texas, Transmission and Distribution Utilities (TDUs) maintain the poles and wires that deliver power to your home, while REPs sell the electricity and handle billing and customer service. TDUs are regulated by the Public Utility Commission of Texas (PUCT) and charge a fixed monthly (base) fee and a per‑kilowatt‑hour delivery fee. Those charges appear on your bill as “TDU Delivery Charges” and are the same no matter which REP you choose (the fees change based on the TDU). The REPs (who are also regulated by the PUCT) set your energy rate and plan structure.
This separation allows competition among REPs, giving consumers more options and the freedom to choose plans that fit their lifestyle. According to the PUCT, Texas’s deregulated market is now the largest mandatory retail‑choice program in the country; roughly 85–90 % of Texans can shop for electricity
The history behind Texas’ switch to a competitive retail electricity market is long, full of politics, corporate bureaucracy, and varied claims of what was best for the consumer. Those pushing for deregulation of the retail electricity market believed that large investor-owned utilities had a monopoly on the market.
There was no competition in the pricing of rates per kWh. The utility companies set the price, and the consumer paid it.
Supporters of deregulation argued that consumers would pay a lower price for electricity if individual providers were allowed to purchase electricity at a wholesale price and then sell it to consumers for a profit. Ultimately, the argument was: that multiple providers competing for the same customers would drive prices down.
Below is a timeline of how things played out.
Although several states have active retail choice programs, no other state has adopted as large or widespread a program like Texas. Unlike other deregulated states, “electrical retail choice is mandated in Texas.” Because of this, close to 90% of residential customer sales are provided by competitive suppliers.
Compare this number to the three states with the next highest levels of participation in a retail choice program:
Texas is served by six TDUs:
These companies manage the delivery infrastructure across deregulated zones. In total, 173 counties are fully or partially deregulated, meaning residents in those counties can choose from a large pool of REPs. More than 800 cities fall under these TDUs. Examples include large cities such as Houston, Dallas, Fort Worth, Corpus Christi and Waco, as well as smaller towns like Abilene, Brenham and Laredo. Because TDU boundaries do not follow county or city limits, some municipalities (e.g., Garland or Bryan) are partially deregulated; most of the time, specific ZIP codes determine whether you can choose your provider, but to be 100% sure, you would need search your full address. Below you can find a list of deregulated cities under their own TDU.
Keep in mind, that some locations in Texas are only partially-deregulated. Zip codes or full addresses are very important when researching deregulated areas of Texas.
Abbott | Ackerly | Addison | Aledo | Allen |
Alto | Alvarado | Alvord | Andrews | Anna |
Annona | Archer City | Argyle | Arlington | Arp |
Arthur City | Athens | Austin | Avalon | Avery |
Axtell | Azle | Bangs | Bardwell | Barry |
Bartlett | Bedford | Bellevue | Belton | Ben Franklin |
Ben Wheeler | Big Spring | Blanket | Blooming Grove | Bonham |
Boyd | Brady | Brandon | Brashear | Breckenridge |
Bridgeport | Briggs | Brookesmith | Brookston | Brownsboro |
Brownwood | Bruceville | Buckholts | Buffalo | Bullard |
Burkburnett | Burleson | Burlington | Bynum | Caddo |
Caddo Mills | Cameron | Campbell | Canton | Carbon |
Carrollton | Cayuga | Cedar hill | Celeste | Celina |
Centerville | Chandler | Chico | Chilton | China Spring |
Chireno | Clarksville | Cleburne | Coahoma | Colleyville |
Collinsville | Colorado City | Comanche | Commerce | Como |
Coolidge | Cooper | Copeville | Coppell | Copperas Cove |
Corsicana | Coupland | Crandall | Crane | Cresson |
Crockett | Crowley | Cumby | Cushing | DFW Airport |
Dallas | Dawson | De Leon | Decatur | Denison |
Denton | Desdemona | Desoto | Diboll | Dike |
Dodd City | Doole | Douglass | Dublin | Duncanville |
Early | Eastland | Ector | Eddy | Edgewood |
Electra | Elgin | Elkhart | Elm Mott | Enloe |
Ennis | Euless | Eustace | Fairfield | Farmersville |
Fate | Ferris | Flint | Florence | Flower Mound |
Forney | Forreston | Forsan | Fort Worth | Frankston |
Frisco | Frost | Gail | Gainesville | Gallatin |
Garden City | Gardendale | Garland | Georgetown | Godley |
Goldsmith | Goldthwaite | Gorman | Graford | Graham |
Granbury | Grand Prairie | Grand Saline | Grandfalls | Grandview |
Granger | Grapeland | Grapevine | Greenville | Groesbeck |
Gunter | Haltom City | Harker Heights | Haslet | Henderson |
Henrietta | Hermleigh | Hewitt | Hext | Hillsboro |
Holland | Holliday | Honey Grove | Howe | Hubbard |
Huntington | Hurst | Hutchins | Hutto | Imperial |
Iowa Park | Ira | Irene | Irving | Italy |
Itasca | Ivanhoe | Jacksboro | Jacksonville | Jarrell |
Jewett | Josephine | Joshua | Justin | Kaufman |
Keene | Keller | Kemp | Kempner | Kennedale |
Kerens | Killeen | Klondike | Knott | Krum |
Ladonia | Lake Dallas | Lamesa | Lancaster | Laneville |
Larue | Latexo | Lavon | Lenorah | Leona |
Leroy | Lindale | Lindsay | Lipan | Little Elm |
Little River | Lohn | Loraine | Lorena | Lott |
Lovelady | Lufkin | Mabank | Malakoff | Malone |
Manor | Mansfield | Marlin | Marquez | Mart |
Maryneal | Maypearl | Mc Dade | Mc Gregor | Mc Kinney |
McKinney | Melissa | Melvin | Mentone | Merit |
Mertens | Mesquite | Mexia | Midkiff | Midland |
Midlothian | Milano | Milford | Millersview | Millsap |
Mineola | Mineral Wells | Monahans | Montalba | Moody |
Mount Calm | Muenster | Mullin | Murchison | Myra |
Nacogdoches | Naval Air Station Joint Reserve Base Fort Worth | Neches | Nevada | New Summerfield |
Newark | Nolanville | Normangee | North Richland Hills | Notreess |
O’Donnell | Oakwood | Odessa | Oglesby | Olden |
Orla | Overton | Palestine | Palmer | Palo Pinto |
Paradise | Paris | Pecan Gap | Pendleton | Penelope |
Penwell | Perrin | Petty | Pflugerville | Plano |
Pollok | Ponder | Poolville | Potosi | Pottsboro |
Powderly | Powell | Poynor | Prairie Hill | Prosper |
Purdon | Pyote | Quinlan | Ranger | Ravenna |
Reagan | Red Oak | Rhome | Rice | Richardson |
Richland | Richland Springs | Riesel | Roanoke | Rochelle |
Rockdale | Rockwall | Rogers | Roscoe | Rosebud |
Rosser | Round Rock | Rowlett | Roxton | Royse City |
Rusk | Sachse | Sadler | Salado | San Saba |
Sandy | Satin | Savoy | Scotland | Seagoville |
Seymour | Sheppard Air Force Base | Sherman | Slidell | Snyder |
Southlake | Southmayd | Springtown | Stanton | Stephenville |
Streetman | Sulphur Bluff | Sulphur Springs | Sumner | Sunnyvale |
Sunset | Sweetwater | Tarzan | Taylor | Teague |
Tehuacana | Telephone | Temple | Tennessee Colony | Terrell |
The Colony | Thorndale | Thornton | Thrall | Trinidad |
Troup | Troy | Tyler | Valley View | Van |
Van Alstyne | Venus | Voca | Waco | Waxahachie |
Weatherford | Weir | Wells | West | Westbrook |
Whitehouse | Whitesboro | Whitt | Wichita Falls | Wills Point |
Wilmer | Windom | Wink | Wolfe City | Woodway |
Wortham | Wylie | Yantis | Zavalla | Zephyr |
Abilene | Afton | Agua Dulce | Alamo | Albany |
Alice | Alleyton | Alpine | Anson | Aransas Pass |
Asherton | Aspermont | Austwell | Avoca | Baird |
Ballinger | Balmorhea | Barksdale | Barnhart | Bay City |
Bayside | Beeville | Belmont | Benavides | Benjamin |
Berclair | Big Lake | Big Wells | Bigfoot | Bishop |
Blackwell | Blessing | Bloomington | Brackettville | Bronte |
Brownsville | Bruni | Buffalo Gap | Burkett | Camp Wood |
Carlsbad | Carrizo Spring | Catarina | Charlotte | Childress |
Chillicothe | Christine | Christoval | Cisco | Clyde |
Columbus | Combes | Comstock | Concepcion | Corpus Christi |
Cotulla | Cross Plains | Crowell | Crystal City | D Hanis |
Del Rio | Devers | Devine | Dickens | Dilley |
Donna | Driscoll | Eagle Lake | Eagle Pass | Edcouch |
Eden | Edinburg | Edna | Edroy | El Campo |
El Indio | Eldorado | Elmaton | Elsa | Encinal |
Encino | Eola | Falfurrias | Flomot | Fort Davis |
Freer | Fulton | Ganado | Garciasville | Garwood |
George West | Gillett | Girard | Glidden | Goliad |
Gonzales | Goree | Gregory | Grulla | Hamlin |
Hargill | Harlingen | Harrold | Haskell | Hawley |
Hebbronville | Hidalgo | Inez | Ingleside | Iraan |
Jayton | Jourdanton | Junction | Karnes City | Kenedy |
Kingsbury | Kingsville | Knickerbocker | Knippa | Knox City |
La Blanca | La Feria | La Joya | La Pryor | La Villa |
Laredo | Lawn | Leakey | Leesville | Leming |
Lockhart | Lolita | Los Ebanos | Los Fresnos | Los Indios |
Louise | Lozano | Lueders | Luling | Lyford |
Lytle | Marathon | Marfa | Markham | Matador |
Matagorda | Mathis | May | Mc Camey | Mc Caulley |
McAdoo | McAllen | Menard | Mercedes | Mereta |
Merkel | Mertzon | Midfield | Miles | Mirando City |
Mission | Moore | Moran | Munday | Nada |
Natalia | Nixon | Nordheim | Normanna | Norton |
O Brien | Oakville | Odell | Odem | Oilton |
Oklaunion | Old Glory | Olmito | Ovalo | Ozona |
Paducah | Paint Rock | Palacios | Pawnee | Pearsall |
Penitas | Pettus | Pharr | Placedo | Pleasanton |
Point Comfort | Port Aransas | Port Isabel | Port Lavaca | Port Mansfield |
Portland | Poteet | Premont | Presidio | Progreso |
Putnam | Quanah | Quemado | Quitaque | Rankin |
Raymondville | Realitos | Redford | Refugio | Rio Grande City |
Rio Hondo | Rising Star | Roaring Springs | Robert Lee | Roby |
Rochester | Rockport | Rocksprings | Roma | Rotan |
Rowena | Rule | Runge | Sabinal | San Angelo |
San Benito | San Diego | San Isidro | San Juan | San Ygnacio |
Sandia | Santa Anna | Santa Maria | Santa Rosa | Saragosa |
Seadrift | Sebastian | Sheffield | Sinton | Skidmore |
Smiley | Sonora | South Padre Island | Spring Branch | Spur |
Stamford | Sterling City | Sullivan City | Sylvester | Taft |
Talpa | Three Rivers | Throckmorton | Tivoli | Trent |
Tuleta | Turkey | Tuscola | Tye | Tynan |
Uvalde | Valentine | Valera | Veribest | Vernon |
Victoria | Wadsworth | Wall | Water Valley | Weesatche |
Weinert | Weslaco | Westhoff | Wingate | Winters |
Woodsboro | Woodson | Yorktown | Zapata |
Alvin | Angleton | Aubrey | Bagwell | Bailey |
Barstow | Bells | Blossom | Blue Ridge | Bluff Dale |
Blum | Bogata | Brazoria | Bryson | Byers |
Carlton | Clifton | Covington | Coyanosa | Crawford |
Cunningham | Deport | Detroit | Dickinson | Emory |
Fort Stockton | Friendswood | Gatesville | Glen Rose | Gordon |
Gustine | Hamilton | Hico | Iredell | Jermyn |
Jonesboro | Kermit | Kopperl | La Marque | League City |
Leonard | Lewisville | Lone Oak | Loving | Megargel |
Meridian | Mingus | Montague | Morgan | Nemo |
Newcastle | Nocona | Old Ocean | Olney | Pattonville |
Pecos | Petrolia | Pilot Point | Point | Princeton |
Purmela | Rainbow | Randolph | Ringgold | Rio Vista |
Saint Jo | Sanderson | Santo | South Bend | Strawn |
Sweeny | Talco | Texas City | Tioga | Tolar |
Tom Bean | Toyah | Trenton | Valley Mills | Walnut Springs |
West Columbia | Westminster | Whitewright | Whitney | Wickett |
Column 1 | Column 2 | Column 3 | Column 4 | Column 5 |
---|---|---|---|---|
Bacliff | Banquete | Baytown | Beasley | Bellaire |
Bellville | Boling | Brookshire | Channelview | Clute |
Conroe | Crosby | Cypress | Damon | Danbury |
Dayton | Deer Park | East Bernard | Freeport | Fresno |
Fulshear | Galena Park | Galveston | Guy | Hempstead |
Highlands | Hitchcock | Hockley | Houston | Huffman |
Humble | Hungerford | Katy | Kemah | Kendleton |
La Porte | Lake Jackson | Liverpool | Magnolia | Manvel |
Missouri City | Montgomery | Needville | Orchard | Pasadena |
Pearland | Pinehurst | Pledger | Porter | Richmond |
Rosenberg | Rosharon | Santa Fe | Seabrook | Sealy |
Simonton | South Houston | Spring | Stafford | Sugar Land |
Thompsons | Tomball | Waller | Wallis | Webster |
Wharton |
There are two groups of consumers who are excluded from mandatory deregulation in Texas:
Senate Bill 7 allowed municipal utilities and electric cooperatives to decide whether to participate in deregulation. Many opted to remain regulated because they are not‑for‑profit entities whose mission is to provide value to their communities. Revenues are reinvested locally and rates are set by city councils or member boards. Once a municipal utility opts in to deregulation the decision is irrevocable, so utilities weigh the potential benefits carefully. As of 2025, only a handful of cooperatives (such as Nueces Electric Co‑op) and LP&L have opted in.
Usually, the utilities’ rates are regulated and set by the PUCT, which ensures that the rates reflect the “overall” costs the utility incurs and provide a reasonable return on investment. Whenever a utility seeks a rate adjustment, it must inform its customers. Those customers and any impacted groups have the right to participate in the rate case and share their input about the proposed changes.
For example, let’s say you are moving from Houston to El Paso. In Houston, you had several options for purchasing your electricity. You could shop around for rates and plan types that best fit your needs. All that changes in El Paso where the only option for electricity service is El Paso Electric.
El Paso Electric is a public-owned utility company (therefore exempt from deregulation). It is the sole electricity provider in the area and has been operating since 1901. Because there is no electric choice available in El Paso, all residents must purchase their electricity directly from El Paso Electric.
El Paso manages all generation, transmission, and distribution for the area it serves. And, the rates are also managed by El Paso Electric.
The Electric Reliability Council of Texas (ERCOT) runs the state’s independent power grid, delivering power to more than 27 million people—about 90% of the state’s electricity demand. As the first independent system operator (ISO) in the U.S., ERCOT manages over 54,000 miles of transmission lines and 1,200 generation units while coordinating with TRE and NERC to maintain grid reliability. Beyond scheduling power flow, ERCOT also settles wholesale transactions and oversees retail switching for millions of competitive choice customers. A nonprofit membership-based corporation, it operates under the oversight of the Public Utility Commission of Texas and the Texas Legislature, with members that include utilities, co-ops, generators, retailers, and consumers.
Municipal utilities and electric cooperatives that opted out of deregulation continue to control generation, transmission and distribution in their service areas. Large regulated cities include Austin (Austin Energy), San Antonio (CPS Energy), El Paso (El Paso Electric) and Brownsville (Magic Valley Electric Co‑op). Other regulated communities include Bryan (Bryan Texas Utilities), Burnet, College Station, Denton, Georgetown, Kerrville, New Braunfels, San Marcos and parts of Garland and The Woodlands. In these areas, residents buy electricity directly from the municipal or cooperative utility and cannot switch providers.
Having dozens of providers and hundreds of plans can be overwhelming. The good news is that you do not have to navigate the market blind. Here are evidence‑based strategies for making a smart choice:
Electricity plans advertise a price at 500 kWh, 1,000 kWh or 2,000 kWh of monthly usage. Choose a plan that aligns with your actual consumption to avoid unexpected charges. Many providers offer bill‑credit or tiered‑rate plans that look cheap at a specific usage level but can cost more if your usage is higher or lower. If you’re unsure, a basic fixed‑rate plan is usually safest.
Texas offers several plan structures:
Every plan comes with an Electricity Facts Label that details the rate structure, contract term, fees and early termination penalties. Experts recommend reading the EFL like a nutrition label to spot hidden fees and understand the true cost. Pay attention to the base charge, energy charge, TDU delivery fees and whether the rate is indexed to market prices.
Market rates fluctuate with demand. Shopping in spring and fall—when demand is lower—can yield better prices. Longer contracts often offer price stability, while shorter terms let you re‑shop sooner if rates fall. Balance the desire for stability with the flexibility to switch when better deals arise.
Check deposits, credit requirements and cancellation fees
Many REPs require a deposit based on your credit score. Prepaid plans allow you to avoid credit checks but usually charge higher rates. Early termination fees can vary widely; choose a contract length you can realistically keep.
Since the electricity market in Texas is big and at times complicated, there are marketplaces that aim to make the life of Texans a little easier but offering in one place a way to search and sign up for a plan that fits their needs. Try Power Wizard, were you can filter and compare electricity plans baased on your preferences and needs.