Energy Deregulation in Texas

The History of Texas Electricity

The electric power industry has existed since the late 1800s, but it remained almost unchanged for a century. Electric companies held monopolies for decades, controlling all areas of the electric supply chain: generation, high-voltage transmission, medium-voltage distribution, metering for homes and businesses, and billing. However, the US power sector has experienced rapid changes in the 21st century:

States have been opening their electric industries to competition, letting homes and businesses choose their electricity provider. This process is called deregulation.
Renewable energy systems have become more affordable, and especially solar panels. Homes and businesses now have options to produce their own electricity, and power companies no longer control 100% of the electric supply.

Texas has the largest deregulated electric sector in the US. Over 26 million Texans can now choose their electricity provider, which represents over 90% of the state’s population. The electric market is managed by ERCOT – the Electric Reliability Council of Texas.

How Deregulation Came to Be in Texas

When the electric industry was new, there was little control over the first power companies. The Public Utility Holding Company Act was created in 1935 for this reason, regulating utility companies and assigning them to specific regions. Electricity monopolies continued to exist for several decades, but now subject to government regulation. This changed with the Energy Policy Act of 1992, which gave states the authority to create competitive energy markets.

The story of electricity deregulation in Texas dates back to World War II. Utility companies in the state formed the Texas Interconnected System (TIS), which had the main purpose of powering military manufacturing centers in the Gulf Coast. However, power companies soon realized the benefits of being interconnected, and the TIS became ERCOT in 1970, under the oversight of the Federal Energy Regulatory Commission (FERC).

The laws that allowed deregulation were enacted a few decades later, until 2002.
There are now over 400 Texan cities where residents can choose their Retail Electricity Provider (REP). These providers offer several electricity plans, adapting to the needs of different customers.
The process can be compared with choosing a mobile phone plan: there are several carriers available, and each of them offers different plans.

Electric deregulation brings many benefits, but having options can also lead to confusion, especially when dealing with a technical topic like energy. Just like you can save on power bills by choosing an adequate plan, you can end up paying much more with a poor selection.

View our Texas Energy Deregulation Map

How Much Does Electricity Cost in Texas?

According to the Residential Energy Consumption Survey from the US EIA, the average Texas home uses 13,895 kWh per year. With the average electricity price of 11.87 cents/kWh, this results in an average bill of $1,649 per year. However, there are two important factors to consider:

Lower bills are possible by selecting a favorable electricity plan, but the opposite also applies: an unfavorable plan can lead to above-average bills.
Electricity consumption is not distributed evenly throughout the year. Texas is characterized by hot summers, and air conditioning leads to high power bills in the hottest months.

There are several types of electricity plans in Texas, but most can be classified into five broad categories:

Fixed-rate plans offer you a kWh price that does not increase during the contract term, and in exchange you agree to purchase electricity for a minimum term. Some typical contract lengths are 12, 24 and 36 months.
Variable-rate plans and market-rate plans change by month, based on how kWh prices behave in the market. There is no minimum term and you can switch at any time, but you can get high power bills in months with expensive electricity.
Prepaid electricity plans are paid upfront with a deposit, and consumption is deducted from your balance. The advantage of these plans is that you can check how much cash is left in your plan, and electricity providers will not ask for a credit record.
Wholesale plans are relatively new in Texas, and they simply transfer the price that is being paid to generators in the wholesale market. However, we don’t recommend these plans at Quick Electricity: the wholesale market can reach very high prices during summer days or emergencies. During the February 2021 winter storm, homeowners with wholesale plans were charged thousands of dollars in just a few days.

Having access to a wide range of electricity plans is one of the benefits of deregulation, and Texas currently has over 300 different providers. For example, you can choose prepaid electricity plans if you want to pay upfront and avoid surprises, or you can get a fixed-rate plan if you want to avoid electricity price spikes in the summer and during emergencies.

How Many States Have Deregulated their Energy Sector?

As of early 2021, there are 26 states that offer some form of energy choice. Texas and five other states have deregulated their electric sector, while 11 states have deregulated natural gas. There are 9 states that have deregulated both electricity and gas.

Deregulated Electricity (6)

Deregulated Gas (11)

Both Services Deregulated (9)

-Texas

-Connecticut

-Delaware

-Maine

-Massachusetts

-New Hampshire

-Florida

-Georgia

-Indiana

-Kentucky

-Montana

-Wyoming

-California

-Kansas

-Nebraska

-New Mexico

-West Virginia

-Illinois

-Maryland

-New Jersey

-New York

-Ohio

-Pennsylvania

-Rhode Island

-Michigan

-Virginia

*These are the states with approved laws that allow deregulation, but the progress achieved and results vary by state. For example, 90% of Texans have access to electric choice, but there are also some states with very limited options.

The Conclusion:

Don’t rush into an electricity plan; you have choices, and in many cases, you have lots of them. The good news is, Quick Electricity sells home energy in fixed electricity plans or in a pay-as-you-go format. To make a long story short, you only pay for the electricity you need, and nothing more.

Electricity Deregulated Cities in Texas

Only in a deregulated electricity market do you have the choices that Quick Electricity offers.

We deliver residential power to 400+ energy deregulated cities. Not sure if we service your area? Just give us a call 1-877-509-8946.

Deregulated Cities in Texas
Deregulated City	TDU Electricity Provider
Abilene	AEP North
Arlington	Oncor
Big Spring	Sharyland
Celeste	Sharyland
Corpus Christi	AEP Central
Dallas	Oncor
Denton	Oncor

Deregulated Cities in Texas
Deregulated City	TDU Electricity Provider
Fort Worth	Oncor
Galveston	CenterPoint
Houston	CenterPoint
Jacksboro	Oncor
Killeen	Oncor
Laredo	AEP Central
Lewisville	TNMP

Deregulated Cities in Texas
Deregulated City	TDU Electricity Provider
Midland	Oncor
Mineral Wells	Oncor
Odessa	Oncor
Paris	Oncor
San Angelo	AEP North
Tyler	Oncor
Wichita Falls	Oncor

Deregulated Cities in Texas
Abilene (AEP North)	Clarendon	Forest Hill	Ladonia	Pearsall	Seagoville
Addison	Clarksville	Forney	Laguna Park	Pecos	Sealy
Alamo	Cleburne	Fort Davis	Lajitas	Penitas	Seguin
Albany	Clifton	Fort Stockton	Lake Jackson	Perryton	Shamrock
Aledo	Clute	Fort Worth	Lake Whitney	Pharr	Sheffield
ALice	Clyde	Freeport	Lake Worth	Pilot Point	Sherman
Allen	Collinsville	Freer	Lamesa	Plano	Sinton
Alpine	Colorado City	Frisco	Lancaster	Pleasanton	Snyder
Alvarado	Columbus	Fulton	Laredo	Port Aransas	Sonora
Alvin	Comanche	Gainesville	League City	Port Isabel	South Houston
Alvord	Commerce	Galena Park	Leakey	Port Lavaca	South Padre
Andrews	Comstock	Galveston	Leona	Port Mansfield	Spearman
Angleton	Cooper	Gatesville	Lewisville	Port O Connor	Spring
Anson	Coppell	George West	Lindale	Portland	Springtown
Aransas Pass	Coppera’s Cove	Goliad	Liverpool	Pottsboro	Spur
Archer Pass	Corpus Christi	Graford	Log Cabin	Prairie View	Stafford
Argyle	Corsicana	Graham	Los Fresnos	Premont	Stamford
Arlington	Cotulla	Granbury	Lufkin	Presidio	Stephenville
Arroyo City	Crane	Grand Prairie	Lytle	Quanah	Sugard Land
Aspermont	Crockett	Grandview	Mabnank	Quinlan	Sulphur Springs
Athens	Crosby	Grapevine	Magnolia	Quintana	Surfside Beach
Atlanta	Cross Plains	Gun Barrel City	Malakoff	Rachel	Sweetwater
Aubrey	Crossroads	Hallettsville	Maone	Rainbow	Snyder
Austwell	Crowell	Haltom City	Manor	Rancho Viejo	Taft
Azle	Crystal City	Hamilton	Mansfield	Ranger	Taylor
Bacliff	Cypress	Hamlin	Marfa	Rankin	Temple
Baird	Dallas	Harker Heights	Mathis	Raymondville	Terlingua
Balch Springs	De Leon	Harlingen	McAallen	Red Oak	Terrell
Ballinger	De Soto	Haskell	McGregor	Refugio	Texas City
Balmorhea	Decatur	Hebbronville	McKinney	Reklaw	The Colony
Barksdale	Deer Park	Henrietta	McAllen	Richardson	Three Rivers
Bay City	Del Rio	Hidalgo	McKinney	Richland	Throckmorton
Baytown	Denison	Hillsboro	Memphis	Richalnd Hills	Tivoli
Bedford	Devine	Hitchcock	Menard	Richmond	Tomball
Beeville	Diboll	Houston	Mercedes	Rio Grande City	Tuleta
Bellaire	Dickens	Hubbard	Merkel	Rio Hondo	Tyler
Bellmead	Dickinson	Hudson	Mesquite	Riviera	Uvalde
Belton	Dilley	Humble	Midland	Riviera Beach	Van
Benbrook	Donna	Huntington	Midlothian	Roanoke	Van Alstyne
Big Lake	Dublin	Hurst	Minalo	Robert Lee	Vernon

Deregulated States and Average Texas Electricity Rate Comparisons

For more about energy deregulation across the US and how electricity rates are affected, read our blog post with average electricity rate/state comparison table and US map showing states with deregulated electricity. More on deregulation and electricity prices…

The History of Texas Electricity

How Deregulation Came to Be in Texas

How Much Does Electricity Cost in Texas?

How Many States Have Deregulated their Energy Sector?

Electricity Deregulated Cities in Texas

Deregulated States and Average Texas Electricity Rate Comparisons

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