Energy Deregulation in Texas
Learn about your electric choice in Texas.
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What is deregulated energy?
Deregulated energy means customers can choose their energy provider and plan from a variety of options. This setup differs from regulated markets, where consumers are automatically enrolled in a default plan from a standard provider.
Deregulation gives you more control over your electricity by allowing you to compare options and choose your favorite. In deregulated markets, retail electric providers (REPs) offer unique plan features and competitive pricing to win your business.
Today, more than 85% of cities in Texas are deregulated, meaning most residents and businesses have the power to choose their electricity.
A history of deregulated electricity in Texas
A majority of the Texas energy market was deregulated in 2002, when Senate Bill 7 officially took effect and ended the monopoly utility companies held over most service areas. Instead of being forced to buy power from their local utility, residents and businesses could now shop for competitive rates from REPs.
Why was Texas energy deregulated?
The goal of deregulating the energy market was to drive down prices by introducing competition among retail providers. While it took some time, that idea has generally proven true in the long run. Additionally, deregulation has encouraged growth in the green energy sector. Today, the Lone Star State is one of the country’s leading producers of renewable power.
According to the U.S. Energy Information Administration, as of January 2026:
- Texas residential electricity rates are 10.1% below the national average.
- Texas commercial electricity rates are 36.7% below the national average.
- Texas industrial electricity rates are 22% below the national average.
- Texas is first in the country for wind energy generation.
- Texas is second in the country for solar energy generation.
Despite the benefits of electricity deregulation, not every city in Texas has adopted it. Austin and San Antonio are still regulated, and Lubbock energy deregulation only took effect in 2024.
How to buy electricity in Texas
Under electric deregulation in Texas, energy providers sell electricity to customers, while utility companies are responsible for delivering it to homes and businesses.
In Texas’ deregulated areas, residents and businesses must buy electricity from an REP, not directly from the local utility company. Having options can help you save, but it can be overwhelming to shop around and evaluate so many providers. That’s where Choose Texas Power comes in. Our marketplace was designed to make the process simple by helping you compare providers, review plan options, and choose the one that best fits your needs. Here’s how it works:
We partner with top providers. We have built strong relationships with many of the best REPs in Texas to allow customers to shop a variety of plans — all for free and all in one place. We vet each provider to ensure they deliver trustworthy, reliable service.
You can filter your plan options. When you enter your ZIP code on this page, you’ll be able to filter by home size, provider, rate type, green energy, and more. If you have questions, our team members are here to help.
We’ll coordinate the setup. You won’t need to bounce between multiple websites to complete your purchase — we’ll handle the entire process. We’ll send the information to your new provider, and they’ll coordinate setup with your utility without any interruption to your service.
Utility companies in deregulated areas of Texas
While you can choose your REP, you cannot choose your utility company, as it is assigned based on where you live. In addition to delivering electricity to your home or business, your utility is also responsible for restoring power after an outage. There are five main utility companies in Texas:
The Public Utility Commission of Texas
The Public Utility Commission of Texas (PUCT) was created in 1975 to regulate the electric utilities within the state. Today, the PUCT is responsible for regulating investor-owned utilities, which operate in deregulated cities in Texas. With a few exceptions, most of the state is under PUCT jurisdiction.
The PUCT does not oversee every type of utility. For instance, municipal or cooperative utilities are managed locally by a city council or board. The PUCT also does not set rates for REPs since their pricing is controlled by market competition. Instead, the PUCT’s role is to enforce rules and regulations for utilities and REPs operating in deregulated areas, ensuring the market runs fairly for consumers.
Choosetexaspower.org is not affiliated with Power to Choose, powertochoose.org, or the PUCT.
Filing a complaint with the PUCT
As a utility regulator, the Public Utility Commission of Texas is responsible for implementing energy industry legislation and resolving consumer complaints.
If you feel you have been wronged by your provider or utility, you can file a formal complaint with the PUCT. However, you should first contact your provider directly to attempt to resolve the issue. For more information on when and how to file a complaint, please check the PUCT’s website.
