Understanding Texas Energy Deregulation

What is Energy Deregulation?

In most states, you buy electricity from one utility company. In Texas, the market is deregulated, meaning ~85% of residents can choose their Retail Electric Provider (REP).

How to Shop for Rates

When comparing plans, look beyond the advertised rate per kWh. Pay close attention to:

• Base Charges: Fixed monthly fees regardless of usage.
• Usage Tiers: Some plans have different rates for <1000 kWh vs >2000 kWh.
• Contract Term: Fixed-rate plans protect you from price spikes, while variable-rate plans fluctuate with the market.

The "Power to Choose"

The official state website, Power to Choose, lists available plans. However, be wary of plans with "gimmick" rates that only apply at very specific usage levels.

Key Takeaway

Deregulation offers choice and competition, but it requires homeowners to be proactive. Review your contract annually to ensure you aren't rolled onto a higher variable rate.