Explore the History of Deregulation in Texas

Before deregulation of select Texas energy markets, one company provided everything from power generation to sales in a given area. Senate Bill 7 went into effect on Jan. 1, 2002, and deregulated the Texas electric market. Deregulation split up the regional monopolies held by the major energy companies. Now, power generation, transmission and distribution, and sales are all handled by different companies.

How does it work?

Generation plants produce electricity by burning fossil fuels, coal for example; harnessing renewable power resources, i.e., wind and solar; or from controlled nuclear reactions. Retail electricity providers (REPs) bid on electricity from the generators to sell to consumers. The electricity generated is then transmitted and distributed over AC (alternating current) and DC (direct current) power lines. The power lines and transmission systems are owned and operated by the utility company. The utility has an agreement with the REPs to deliver power to REP customers.

What does it mean for me?

Deregulation sounds pretty complex, but in the end, what it means for consumers is simple. When different companies are allowed to compete in a deregulated market, consumers can get a better deal on their services. You can save even more money when you take advantage of REP-sponsored energy-efficiency education and tools. When you use less energy, you pay for less energy.

The future is now thanks to smart metering

One way that REPs will be improving energy efficiency is through the use of smart meters. Smart meters continue to measure your home's electricity usage but they also collect data that you can access. Through a website or via your in-home monitor, you can see how much energy you are using at different times during the day. Since electricity rates can vary during "on peak" or "off peak" hours, you can use the information gathered from your smart meter to better manage your electricity usage throughout the day and save money.

Smart metering also streamlines other processes. A smart meter sends data directly to the utility. Say goodbye to on-site meter-reading! No more on-site meter-reading means that utility resources can be better allocated to improve efficiency and quality of service. As an added bonus, if you decide to switch REPs, your smart meter makes the transition to a new REP easier and often quicker. Save money sooner with a smart meter.