How Energy Works in Texas [Infographic]

Thanks to Texas energy deregulation, the energy utilities that both distributed and sold energy were separated from the process of selling to consumers. This allowed competitive retail energy providers, or REPs, to enter the market and sell their electricity plans to customers. Now, many Texans have the option to choose the electricity company and plan that works best for their home and their lifestyle.

The Texas electricity market has a lot of players and a lot of choices, which is very beneficial to customers, but can also be confusing. Below is an infographic that summarizes how energy works in Texas, including Texas electricity deregulation, the players in the energy market and tips on choosing an energy plan.

Texas deregulated energy players:

  • Transmission and Distribution Service Provider, or TDSP: Also called Transmission and Distribution Utilities, or TDUs, these utilities connect and distribute electricity to your home and restore your service after a power outage.
  • Retail Electricity Provider, or REP: You choose a REP to provide you with an electricity plan, billing, payment processing and customer service.
  • Public Utilities Commission of Texas, or PUCT: The PUCT sets and enforces regulations for the Texas energy market.
  • Electric Reliability Council of Texas, or ERCOT: ERCOT oversees the reliability and security of the power grid.

Tips to shop for an electricity plan:

  • When you shop for electricity plans, visit websites like Power to Choose, Save on Energy, Vault Energy or Choose Texas Power for plan comparison.
  • Read the Electricity Facts Labels, or EFLs, to learn about the details of the plans.
  • When choosing a plan type, there are a few main types you will see: fixed rate, variable rate, prepaid, and indexed for natural gas.

How Energy Works in Texas [Infographic]: the players in the Texas energy market, how to choose an electricity plan and the types of electricity plans

What is energy deregulation?

Texas deregulated its energy industry in 2002, which means your energy company is no longer dictated by where you live. Consumers can shop and compare energy plans from several companies that compete against each other, ultimately choosing the plan that best meets their needs.

Deregulated Energy Players:

Deregulated energy delivery is a team effort.

  • TDSP: Your Transmission and Distribution Service Provider, or TDSP, is the company that generates energy and delivers it to your home over high-voltage transmission lines. TDSPs are responsible for maintaining poles, lines and meters, servicing connections and disconnections, and restoring service after power outages.
  • REP: Your Retail Electric Provider, or REP, is the company that you choose to sell you energy under the plan of your choice. REPs are responsible for billing, payment processing and customer service.
  • PUC: The Public Utilities Commission of Texas, or PUC, determines rates for transmission and distribution service, sets reliability and safety standards, and then enforces those standards.
  • ERCOT: The Electric Reliability Council of Texas, or ERCOT, oversees the reliability and security of the state’s power grid.

How to Choose a REP and Energy Plan:

Comparing energy plans is made easier with the use of comparison websites like Power to Choose, Save on Energy, Vault Energy and Choose Texas Power.

After comparing plans side-by-side, you can learn more about plans you like by reading the Electricity Facts Label, or EFL, on the REP’s website. Every plan has a detailed EFL that defines the energy rate, plan type, contract term, fees and other important information.

Most plans fit into one of four categories:

  • Fixed rate plans offer a locked-in rate for the entire duration of the plan.
  • Variable rate plans offer rates that change each month based on electricity demand. These rates are often lower in the spring and fall but higher in the summer and winter.
  • Indexed plans offer rates that change along with the fluctuating price of natural gas.
  • Prepaid plans let you pay for electricity upfront in any amount you choose. When your balance is running low, your REP will send you an alert to help avoid service interruptions. Prepaid plans usually have no long-term contracts, deposits or credit checks.

If you live in a deregulated area in Texas, you have the power to choose your own electricity provider. When you’re educated about how the energy industry works in Texas, you can become more informed in choosing the provider that works best for you.

Find the perfect electricity plan at First Choice Power. We have a variety of Texas energy plans that can help you save money and energy.

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