When it comes to your electricity, there are many choices you have to make – everything from the type of provider you want to work with to how often you want to pay your bills, but only if you are in a deregulated market!
If you’re in the process of moving homes or building somewhere entirely new, you have another important choice to make – the area you’ll want to live in. After you have made your choice, you’ll want to start looking into whether you’ll be in a deregulated or regulated energy market.
What is Regulated and Deregulated Energy?
To kick things off, we’ll be explaining the difference between these two types of energy.
A regulated system is when a government or regulatory body establishes, and implements, rules and regulations for energy. This includes how the energy is produced, distributed, and priced.
What makes regulated energy different from its counterpart is that government bodies and regulators ensure that there’s enough energy for everyone in the area. These official regulators also work hard to mitigate any unfair practices within the electricity sector.
By contrast, a deregulated system is when the government encourages more competition between electricity providers and companies. This means different companies can produce and sell energy on their own terms, such as determining prices and how they choose to produce the energy in the first place.
Opting for areas that have deregulated energy gives customers options when choosing energy providers. However, these companies still need to follow specific rules and regulations to ensure that they’re following best practices.
Regulated Areas
If you decide to venture into the regulated energy sector, then there are a myriad of pros to doing so. For starters, opting for regulated energy can give homeowners stable electricity prices. This is because energy rates are set and implemented by the government and electricity providers, respectively. Having stable energy prices is a great benefit if you want to streamline your budget, as you can effectively factor energy usage into your budget based on the rates provided. Additionally, there are fewer fluctuations in regulated energy rates than in deregulated.
Another great benefit of regulated markets is the long-term reliability of the energy being provided. Governments and regulators set certain standards and rules energy companies must follow. This ensures that everyone in the regulated area has equal and fair access to the energy that they’re paying for, which includes during times of high demand or unexpected events where power might be affected.
However, one of the biggest downsides to regulated electricity is the lack of choice consumers can have. As government bodies and regulators are in control of the prices, services, and providers in any given area, customers are quite limited in the energy they can and can’t use.
Another con of regulated energy is that these systems are often slow to adapt to the ever-evolving world. This boils down to government bodies and regulators having to jump through many hoops to get the green light, which can prove to be sluggish and inefficient. And changing prices to adapt to various circumstances – such as weather or increase in demand – are also affected by the general slowness of those who control the regulated energy.
Deregulated Areas
Over the years, more and more areas are opting for deregulated energy – and for good reason too. Having a deregulated energy system empowers consumers to look for the best energy deals out there, as this type of energy market offers greater levels of flexibility, especially for those who generate power themselves.
Another great reason to go the deregulated route is that more providers will be competing for your money. This means that there will be lower energy rates, and customers will have the power to choose the provider with the best energy plan that meets their needs.
Going down this route also means that you’re supporting energy innovation. As climate change and intense weather events can put pressure on existing power supply, deregulated energy providers have ample opportunity to experiment and figure out the best ways to provide quality energy without impacting the environment.
But one of the downsides to deregulated energy is that prices can fluctuate at any time for any number of reasons, which can include an increase in demand or the weather conditions. This can make it challenging for customers to manage their energy budget and constantly be monitoring the market.
Another con of deregulated energy is that there’s a lot of complex information customers have to wrap their heads around. With a plethora of providers, plans, and pricing structures, it can often be difficult for consumers to work out which energy supplier is best suited for their needs, especially with some providers hiding fees or up charging unexpectedly.
Which Markets are Deregulated and Regulated in Texas
With over 400 cities in Texas, researching a regulated or deregulated area in our vibrant state might seem difficult at first glance. But there are plenty of online tools you can use to see if your city supports regulated or deregulated energy.
One such website is the Public Utility Commission of Texas, which is the state agency that oversees the economic regulation of Texas’ utilities, such as electricity, water, and telecommunications. Their website features some detailed maps to help you determine what areas of Texas are regulated and deregulated.
In Texas, most rural areas and a number of cities remain as regulated energy markets, where a single utility company provides electricity services.
Some of the major regulated cities in Texas include:
- Austin: The capital city of Texas is served by Austin Energy, a publicly-owned electric utility company.
- San Antonio: The city's primary energy provider is CPS Energy, which is a municipally-owned utility company.
- El Paso: El Paso Electric serves the residents of El Paso and its surrounding areas.
- Garland: Garland Power & Light, a municipally-owned utility, provides electricity services in this city.
- Brownsville: Brownsville Public Utilities Board caters to the energy needs of the residents of Brownsville.
Many cities and areas in Texas have embraced deregulated energy markets, allowing residents to choose their electricity provider from a range of competitive options. Here is a list of some of the major deregulated cities in Texas:
- Houston: As the largest city in Texas, Houston's residents can choose from numerous retail electric providers (REPs) for their electricity needs.
- Dallas: The residents of Dallas also benefit from a deregulated market, providing them with various options for electricity providers.
- Fort Worth: Similar to Dallas, Fort Worth residents can select from multiple REPs to find the best electricity plan for their needs.
- Arlington: Arlington is another city in Texas where residents can take advantage of a deregulated energy market.
- Corpus Christi: Corpus Christi's deregulated market allows consumers to compare electricity rates and select their preferred provider.
- Plano: In Plano, residents have the freedom to choose their electricity provider from a variety of options.
- Irving: Irving is also part of the deregulated energy market in Texas, offering its residents competitive electricity plans.
- Laredo: Laredo's residents can choose their electricity provider from the available options in the deregulated market.
- Lubbock: Lubbock has begun a transition to a deregulated market (expected in October 2023), soon giving its residents the ability to select their electricity provider.
Please note that these lists are not exhaustive, and there are other smaller cities and towns in Texas with regulated and deregulated energy markets. It's important to check with your local utility company or the Public Utility Commission of Texas for more information regarding your specific location. By understanding what areas of Texas are deregulated – which is most of the state – you can be better equipped to handle and manage your energy, no matter where it comes from.
FAQs about Deregulated Energy in Texas
Deregulation can be hard to understand, especially if you’re moving to Texas from out of the state. Here are some frequently asked questions.
1. What is deregulated energy?
Deregulated energy refers to a market where customers have the freedom to choose their electricity provider from a range of competitive companies. This allows for more options, competitive pricing, and tailored energy plans.
2. When did Texas deregulate its energy market?
Texas began the process of deregulation of its energy market in 1999 with the passing of Senate Bill 7. The newly deregulated energy market officially launched on January 1, 2002.
3. How does deregulation benefit consumers?
Deregulation encourages competition among electricity providers, leading to lower prices, various plan options, and improved customer service. Consumers have the flexibility to choose a provider that best suits their needs and budget.
4. How do I choose an electricity provider in a deregulated market?
To choose an electricity provider in a deregulated market, research the available providers in your area and compare their rates, plans, contract lengths, and customer reviews. Consider factors such as renewable energy options, rewards programs, and additional fees.
5. Can I switch electricity providers if I am not satisfied with my current provider?
Yes! You can switch electricity providers in a deregulated market. However, be aware of any early termination fees associated with your current contract before making a switch. It's essential to review the terms and conditions of your existing agreement. If you are nearing the end of your agreement, it’s best to start shopping early (30-90 days from the end of your agreement).
6. Is the delivery of electricity affected by choosing a different provider?
No, the delivery of electricity remains unaffected when you choose a different provider. Regardless of the provider you select, the local utility company is responsible for maintaining the infrastructure, delivering electricity, and addressing power outages.
7. Are there any disadvantages to deregulated energy markets?
Deregulated energy markets can have some drawbacks, such as price fluctuations due to market conditions and potentially overwhelming information for consumers when comparing providers and plans. However, the benefits of competition and choice often outweigh these disadvantages for many customers.
8. How can I find out if my city in Texas is deregulated?
You can consult The Public Utility Commission of Texas or your local utility company to determine whether your city or area is part of the deregulated energy market in Texas.
9. What is the role of the Public Utility Commission of Texas in deregulated markets?
The Public Utility Commission of Texas oversees and regulates the state's electricity market, ensuring fair practices, consumer protection, and compliance with rules and regulations by electricity providers.
10. Are there any resources available to help me compare electricity providers in Texas?
Yes, websites such as Power to Choose and the Texas Electric Choice website offer tools and resources to help you compare electricity providers, rates, and plans in your area. Always research and verify the information before making a decision.
Shop the Best Electricity Deals
If you live in a deregulated market, then why not shop for the best electricity deals in Texas with OnPoint Energy? Our team breaks down the complexity of energy prices and plans, ensuring that you can discover an energy plan that’s tailored to your specific needs. No matter your situation, our experienced team will provide stable rates to ensure you get the best energy deal with no fine print. And as a bonus, we are fully transparent with all of our costs, so that you’re getting exactly what you signed up for and no hidden fees.
We empower our customers to get the best energy at the lowest prices through clear, easy-to-understand plans and prices. We’re proud to service many deregulated areas, such as Houston, Pearland, Dallas, Fort Worth, and many more. So don’t just pick the cheapest rate, for the best all-around energy company with competitive rates – get in touch with the OnPoint Energy team today. Every plan we offer comes with a 30-day satisfaction guarantee, because we know you will love it.