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What to Expect When Dealing With Retail Electricity Providers

By Tiffany Reynolds

Whether you’re new to Texas or you’ve lived there all your life, you’ve probably heard the term “retail energy provider” before. Also called REPs, retail energy (or electricity) providers are the companies that you contact to choose an energy plan and get electricity purchased for your home.

Most Texans get to choose from several different retail energy providers in your area, each of which offers various plans. Power Wizard can help make the process of narrowing down your options easier by showing you the REPs with rates based on your unique energy needs.

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Sounds pretty simple, right? Well, retail energy providers are only one part of the equation. There are other players involved in getting electricity to your home. Here, we’ll take a closer look at the process and what you can expect when dealing with electricity providers in your area.

How Retail Electricity Providers Work

One of the first things to note about retail energy providers is that they don’t produce the power your home uses. The process to get power to your home actually involves a series of steps, each handled by different companies. Energy retailers are actually the last step in the process.

Power Generation Companies Operate to Create Electricity

Power generation companies are the entities that own and operate the power plants that create the electricity you use to power your home. These facilities use different sources to generate power, including coal, natural gas, wind, solar, and other renewable sources. Each one produces electricity that gets sold on the wholesale energy market.

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Transmission Distribution Utilities Deliver the Supply of Electricity

A transmission distribution utilities (TDU or transmission and distribution service provider) is responsible for distributing electricity to the homes and businesses within its service area. It owns the power lines, wires, poles, and meters in that area and conducts all necessary maintenance and repairs on them, too.

Retail Energy Providers Connect With Retail Customers

Last but not least, there are retail energy providers. These companies purchase wholesale energy, price it, and sell it to retail customers (that’s you!). Other responsibilities of retail energy providers include:

  • Billing customers for the energy they use
  • Sending the transmission distribution company their share of what customers pay each month
  • Attracting and retaining customers
  • Handling customers’ questions and complaints

In Texas’ deregulated market, you have the freedom to select your energy provider and switch companies if you’re unhappy with the service your current one provides. However, there are many REPs on the market. You could spend hours researching your options and comparing their different types of plans.

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

Power Wizard uses your ZIP code and service address to search through hundreds of available energy plans in seconds. Power Wizard finds the top options from the best REPs in your area, allowing you to save time and be sure you’ve got the best fit possible.

What Should You Expect When Dealing With Retail Electricity Providers?

Choosing a retail electricity supplier is a vital component of powering your home. Every energy provider is different, though. Although they all purchase electricity in bulk on the wholesale market, they all have their own policies, pricing packages, and options for their customers. But what, exactly, can you expect when dealing with them? Here’s a closer look.

Competitive Electricity Markets

In regulated energy markets, utility companies own every part of the supply chain and have monopolized control over given areas. That means you don’t have a choice in who supplies your electricity. You’re subject to their prices and policies. There’s no competition. If you don’t like the service you receive, you’re stuck. The only way to change your energy provider is to move, which is nothing if not a hassle.

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The Texas electricity market is different. For the majority of the Texas population, there are no monopolies; it’s deregulated. Instead, one area can have many retail energy providers. Each one has to compete to attract and retain customers like you. In other words, there’s competition.

Deregulation and a competitive market come with many benefits, including:

  • Freedom of choice: You aren’t stuck with one utility company for electricity. You get to choose your energy provider and, if you aren’t satisfied with it, switch to a new one.
  • Lower prices and better service: Competition means that retail energy providers have to work to attract and retain their customers. This can motivate REPs to keep their pricing affordable and provide quality customer service.
  • Promotes energy efficiency: Some retail energy providers use more energy-efficient practices than others. They even offer green energy plans, which allow consumers to purchase renewable energy. In a deregulated market, you can choose energy providers that share your values if you’re looking for ways to reduce your carbon footprint.

Another unique feature of the Texas electricity market is a standalone grid. The Texas grid provides power to approximately 90% of the state. But how does it ensure grid reliability? That’s the job of the  Electric Reliability Council of Texas (ERCOT).

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ERCOT doesn’t own any assets, nor does it produce any electricity. Instead, it monitors all of the moving parts that keep electricity flowing from energy generation companies through the grid and into the homes and businesses of Texans. Its main roles are to facilitate competitive wholesale and retail energy markets, ensure open access to transmission, and maintain system reliability. ERCOT works with retail energy providers to help ensure that there’s enough power for customers and that the power reaches homes and businesses without issues.

Different Types of Electricity Rates and Plans

Retail energy providers offer a range of electricity plans. That means you get to make two choices: your energy provider and a plan that fits your unique needs and budget. REPs set different rates for their plans, which wholesale rates, demand, and other factors can impact.

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There are several plan options to choose from, including:

  • Fixed-rate plan: Fixed-rate plans involve signing a contract that allows you to lock in your electricity rate for a set period. The REP is contractually committed to maintain your rate for the duration of the contract.
  • Variable-rate plan: Also known as month-to-month plans, variable-rate plans have no long term contracts. You’re free to change energy providers whenever you want without early-termination fees. However, you are subject to drastic changes in your rate, depending on what happens in the market.
  • Flat-rate plan: With a flat-rate plan, you pay the same amount every month, regardless of how much energy you use. Although this can be beneficial during hot summer months, you may end up overpaying in the winter.
  • Prepaid plan: Instead of paying for the energy you used at the end of a given month, a prepaid plan allows you to add funds to an account to pay for the electricity you’ll use in the future. Your REP deducts the money from your account and alerts you when your balance reaches a given threshold so that you avoid disconnection.

Don’t Go at It Alone: Use Power Wizard for Electricity Transactions

The deregulated energy market gives you options, but making sense of those options can be confusing and time-consuming. You want to be sure you’re choosing a good retail energy provider and selecting the best plan for you. Fortunately, you don’t have to do it alone. Power Wizard is here to help.

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

With Power Wizard, you can quickly  see what REPs and plans make the most sense based on where you live and your home’s historical energy usage. For VIP members, we’ll also take care of setting you up with the REP of your choosing and alert you if a better plan becomes available later. That way, you can always be sure you’re getting the best deal possible.

Visit Power Wizard today!

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


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