The History of Texas Electricity Deregulation
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.