Understanding the Market: Texas Electricity 101

by Stuart Percle

In this post, we explain what a deregulated electricity industry means for Texas, how electricity is made, delivered, sold, and purchased, and we also explain how Energy Ogre can save you time, money, and the hassle of managing your next electricity plans.

In this article:

What does deregulation mean in Texas?
How does electricity get to my home?
Energy Ogre changes the way you buy electricity in Texas.
How do I sign up with Energy Ogre?

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What is Deregulation and How It Affects You

Effective January 2002, the State Legislature deregulated electricity in Texas with the adoption of Texas Senate Bill 7 (SB7). Instead of having only one company for electricity, SB7 opened up the state's supply of electricity to retail competition.

Now, over 85% of Texas energy consumers can pick their own electricity service from a variety of retail electricity providers (REPs). And, you don't have to stay with the same provider forever.

In fact, switching providers at least once a year is recommended to keep from overpaying for electricity in Texas. Deregulation not only benefits consumers by giving them more options but also encourages innovation. Like the development of new and affordable forms of energy. Additionally, more renewable energy sources have positive effects on our environment.

Note: There are still some parts of the state that remain regulated such as the cities of Austin and San Antonio. Here is a complete list of deregulated cities in Texas.

All Electricity Comes from the Same Place

While retail electricity providers purchase electricity wholesale to resell to the public, they have no part in the actual delivery of electricity to the public.

Retail electricity provider's set their prices based on analysis of supply and demand, but you're not vulnerable to wholesale variables when you sign a contract.

Don't Pay More for the Same Product

There is no such thing as a retail electricity provider that provides the best electricity in Texas. While some do offer better rates than others, they are nothing more than a billing service.

It's not about who your provider is, it's about what your rate is. anchor

How Electricity Gets to Your Home in Texas

Deregulated electricity delivery in Texas

Generation: Electricity is generated at power plants. Types of power plants include natural gas, coal, wind, solar, and nuclear power. These different sources enter the electric grid and mix together to supply the state with electricity.
- The Texas electric grid is made up of transmission and distribution equipment owned by utility companies (formally known as Transmission and Distribution Service Providers or TDSPs).
Transmission: The generated electricity is sent through miles of high voltage lines via transmission towers to smaller substations.
Substations: Substations are made up of equipment such as transformers and circuit breakers. They transform voltage up or down depending on where it's heading.
- To get to your home, the voltage is stepped down and sent through smaller distribution lines.
Distribution: Smaller poles and wires are used to send the lower voltage electricity through neighborhoods. Wires split off from the poles and feed directly into the electric meter attached to homes.

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Energy Ogre changes the way you buy electricity in Texas.

Deregulation presented Texans with the power to choose electricity plans of all types. However, the competition also forces REPs to work harder to gain new customers.

Oftentimes, some REPs resort to using gimmicks or too good to be true "freebies" to entice consumers. They use these tactics to make consumers believe they are offering the best electricity plans in Texas.

Unfortunately, your actual cost per kWh ends up being much higher than the advertised rate. That's where we come in.

With our proprietary systems, we manage all aspects of the contract process and consistently monitor the market to ensure our members are always on the best plan for their homes.

Whether you already shop for electricity on your own or have been with the same provider for years, we can enhance the way you purchase electricity. Our service allows consumers to reap the intended benefits of the deregulated competitive market and never overpay for electricity again!