Electricity in Texas

Deregulation

Texas legislators deregulated electric services by changing state policy in 2002. Formerly, large companies had a monopoly on providing electricity to residential and business customers. Single companies generated, distributed, and sold electricity. But state lawmakers sought to improve service and pricing by creating a competitive market for electricity. This change was part of a nationwide trend to deregulate utilities.

From Generation to You

Each area still has an incumbent utility known as a Transmission and Distribution Utility (TDU), which owns and maintains power lines. Regulated by the Public Utility Commission, TDUs are not part of the deregulation plan.

Power generation companies run the power plants – including nuclear plants, natural gas and coal-fueled plants, and renewable energy generation – and sell electricity as wholesalers.

In turn, multiple Retail Electric Providers set their own prices and re-sell that electricity to consumers.