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Texas Electricity Deregulation and What It Means for You

By Jeff Cocking

Currently, Texas has the largest deregulated electricity market in the United States. This status dates back to a decision in 1999 to deregulate electricity and allow Texans to choose their electric providers. Texas electricity deregulation can lead to lower electric rates for consumers because it forces electric companies to remain competitive.

However, the competitive environment has allowed electric providers to develop creative plans, which means that if you’re not careful, you can find yourself a victim of gimmicky advertising, excessive fees, or a confusing electric plan. At Power Wizard, we’re committed to helping you navigate Texas electric providers and locate the plan that most benefits your family.

What Does it Mean When People Say, “Texas Electricity Deregulation?”

For hundreds of years, electric utilities have held monopolies on electricity. This means that the electric company in your area was the only electric company you could use — you didn’t have options.

According to Investopedia, monopolies are bad because they corner the market and, as a result, can ask for prices well above a fair market rate. They do this because they know their customers have no choice but to pay.

The Texas deregulation of electricity put a stop to the monopolization of electric services. It has opened up sections of the state, allowing alternative electric providers to provide competition to the electric utilities who had been protected for years.

What Does This Mean for the Electric Market?

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The deregulation of electricity in Texas means that the electric market is highly competitive. Electric generators and providers compete to see who can generate electricity most efficiently and market that electricity to the most customers.

Unlike states with regulated electricity, the deregulated Texas market forces electric providers to fight to stay ahead of their competition.

The Benefits of Electric Deregulation

As a consumer, there are a number of reasons to be grateful for Texas electricity deregulation. The lack of monopolies means that electric companies in Texas have to work harder to provide quality services at reasonable prices.

Let’s take a look at some of the major benefits of deregulated energy.

Electricity Customers Can Choose Their Electricity Services

The first benefit of the deregulation of electricity in Texas is the fact that the majority of electricity consumers have a choice between multiple electricity providers. Making choices is important because it gives you some power over your life.

Most people in today’s society need electricity to live, and that’s out of your hands. But how you pay for it, should be something you have control over. Power Wizard ensures you have this control by offering services geared toward helping you find the best electric plan for your needs.

Competitive Energy Markets

The other aspect of having choices is that when electricity providers know their customers have choices, they have to work harder to provide quality customer service and to ensure fair prices.

Competition in the marketplace pushes people and companies alike to put their resources to work and be original in their pursuit of securing customers. Without competitive energy markets, electricity providers have no incentive to improve their productivity or their customer relations. They know that customers have no choice but to put up with them.

But when they have competition, electric providers have to step up their game. As a result, customer service and productivity improve across the state, and everyone in Texas benefits.

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Consumers Are Cognizant of Their Electricity Consumption

The third benefit of deregulation is that it can lead consumers to be more aware of their energy consumption. When you have the option to shop around for the best rates, the amount of electricity you use becomes an important aspect of your finances and budgeting.

This is especially true if you choose a Time-of-Use plan, which charges your family more money if you use electricity during peak times — like the early evening — and less money if you use electricity during less popular times.

Being aware of overall electricity  consumption can lead customers to make smart decisions, such as unplugging vampire appliances, turning off lights that aren’t being used, or upgrading to energy-saving appliances. This can reduce your overall electric bill while doing your part to help the environment.

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List of Deregulated States

There are numerous states with some level of deregulation. Depending on the state, this can range from deregulated electricity markets, deregulated gas markets, both deregulated electricity and gas, or limited choices for people in certain regions. Regardless of the state, deregulation may be state-wide or limited to certain regions of the state.

The states that currently have some level of deregulation are:

  • California: Limited Deregulation
  • Connecticut: Deregulated electricity
  • Delaware: Deregulated electricity
  • Florida: Deregulated gas
  • Georgia: Deregulated gas
  • Illinois: Deregulated electricity and gas
  • Indiana: Deregulated gas
  • Kansas: Limited Deregulation
  • Kentucky: Deregulated gas
  • Maine: Deregulated electricity
  • Maryland: Deregulated electricity and gas
  • Massachusetts: Deregulated electricity
  • Michigan: Deregulated gas and limited electricity deregulation
  • Montana: Deregulated gas
  • Nebraska: Limited Deregulation
  • New Hampshire: Deregulated electricity
  • New Jersey: Deregulated electricity and gas
  • New Mexico: Limited Deregulation
  • New York: Deregulated electricity and gas
  • Ohio: Deregulated electricity and gas
  • Pennsylvania: Deregulated electricity and gas
  • Rhode Island: Deregulated electricity and gas
  • Texas: Deregulated electricity
  • Virginia: Deregulated gas and limited electricity deregulation
  • West Virginia: Limited deregulation
  • Wyoming: Limited deregulation

How Does This Affect How You Shop for Electricity?

The greatest impact of Texas electricity deregulation is that you can shop for electricity. Instead of being stuck with an unfair electric plan, you have the ability to shop around and find a plan that makes sense for your home.

Of course, the right plan will be dependent on a number of factors, including:

  • The number of people in your household
  • The size and age of your home
  • The age of your appliances
  • The hours you spend at home
  • The amount of energy you consume when you’re home

Power Wizard can help you compare different Texas electricity plans and determine the best plan for your individual needs.

Buy the Best Electricity Plan for Your Home with Power Wizard

Competitive electric markets can make electricity fairer for everyone in Texas. However, they can also make it more difficult to find the right electricity plan for your household’s needs. That’s where Power Wizard comes in.

Let us find you the best plan in seconds and start saving.


Power Wizard helps you evaluate your unique power use and compare different electric plans in your area. We also look out for gimmicky plans that save you money in the short term but jack up prices once you’re locked into a contract. As a result, you can enjoy the lowest possible rates on your electricity for the greatest period of time.

Find the right electric services for you through our DIY shopping tool, or use one of our Silver or Gold VIP plans to have one of our experts find the best plan for you. Learn more by contacting us today.

 

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