The Competitive Electricity Market
In the past, one company provided all parts of your electricity service (generation, transmission and distribution, and retail sales). With competition, these parts are separated into different companies.
Retail Electric Providers (REPs) / Electric Companies
With electric competition, Retail Electric Providers (REPs) sell electricity to you and handle customer service and billing. REPs compete for your business by offering a variety of different pricing options, renewable energy options, added customer service benefits, or other incentives.
Note: Not all areas of the state are open to competition. The Public Utility Commission (PUC) has delayed retail competition for customers of Entergy Gulf States, Southwestern Public Service Company, El Paso Electric Company, and AEP SWEPCO because the PUC has determined that there is not adequate competition in the wholesale electricity market for retail competition to work successfully in these areas. Electric cooperatives and city-owned utilities may decide whether their customers will have a choice of REPs. Customers in these areas should contact their electric cooperative or city utility for more information.
Many Texans have, or soon will have a digital Smart Meter. These new electric meters offer advancements in the way we manage electricity use and offer many benefits over the current mechanical meters. Learn more.
Generating and Selling Renewable Power
Many homeowners and small businesses have installed, or are considering installing, renewable electric generation devices, such as solar panels and wind turbines, to provide some of the electricity they use. Distributed Renewable Generation (DRG) is the term used to refer to equipment that generates electricity using a renewable energy source, such as wind, solar power, or bio-mass, and has a maximum output capacity of no more than two megawatts. Learn more.
Power Generation Companies
Power generation companies own and operate power plants, including plants fueled by coal, nuclear power, natural gas, wind, water, solar power, or other renewable sources. Power generation companies sell this power at wholesale to REPs, who package the power with transmission and delivery service for sale to retail customers. REPs are not permitted under Texas law to own power plants; however, they can be affiliated with a power generation company.
Transmission and Distribution of Electricity
Regardless of which Retail Electric Provider you choose, the actual delivery of the electricity ("transmission and distribution") is still provided by your local Transmission and Distribution Service Provider (TDSP). Your TDSP will continue to be responsible for maintaining the poles, wires, and meter that deliver and measure the electricity consumed by your home or business, for reading your meter and providing the amount of electricity that you consume to your REP, and for restoring service when there is a power outage.
Your choice of REP does not affect the reliability of your transmission and distribution service or how quickly your power will be restored following an outage caused by a storm or other event. The PUC continues to regulate TDSPs by setting the rates for transmission and distribution service, setting reliability and safety standards, and ensuring that all customers and REPs are treated the same when it comes to the delivery of electricity to your home or business.
Repairs and Emergencies
If you experience an emergency related to your electricity service or a power outage, call the number printed on your electric bill for repairs and emergencies. The local TDSP will repair your service or restore your power, just as they will your neighbors' service, regardless of your Retail Electric Provider. There is no special treatment or priority in service restoration for customers of any particular Retail Electric Provider.
Electric Assistance Programs
There are several types of assistance programs for electric customers who are low-income, elderly, disabled, or victims of family violence. For more information, visit our section on low-income assistance.
Incentives for Energy Efficiency and Renewables
The Federal Government offers tax incentives for energy efficiency and renewable energy. Texas residents can also check with their local utility providers, as some have energy efficiency programs that offer low-cost loans/rebates and advice on renewable energy technologies.
Texas provides tax incentives for some businesses. For example, businesses that use, manufacture, or install solar or wind energy can receive franchise tax deductions and/or exemptions. There also exists a property tax exemption involving solar, wind, biomass, and anaerobic digestion for businesses that install or construct such systems.
Renewable Energy Credits (RECs)
The Texas Legislature passed a "Renewable Portfolio Standard" that requires electric utilities and Retail Electric Providers (REPs) to generate and sell specific target levels of renewable power over time, with a target of 10,000 MW in renewable energy capacity by 2025. With each megawatt hour of renewable power generated, a "renewable energy credit" (REC) is produced. Utilities and retailers are required to meet certain renewable generation targets and they can meet those targets by generating renewable power or by purchasing RECs, which are openly bought and sold in the environmental commodities market. Additionally, businesses and individuals may voluntarily purchase RECs to offset their carbon footprints and to support the development of clean energy sources.
If you are interested in buying or selling Texas RECs, please refer to the following list of RECs marketers for their prices, terms, and conditions.