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What’s the big deal about Texas energy deregulation?
Here’s what you need to know

What is energy deregulation?

In layman’s terms, “energy deregulation” lets companies compete for your business and allows you to choose your electricity provider. Retail Electricity Partners (REPs) like Pulse Power do not actually generate electricity but purchase it from an Independent System Operator (ISO) to sell to customers.

When did it happen?

In 1999, the state legislature restructured the Texas electric market and assigned the Electric Reliability Council of Texas (ERCOT) to oversee a competitive retail market. Customers were able to choose their provider starting on January 1, 2002.

While the grid operator is regulated by the Public Utility Commission of Texas: (PUCT) and the Texas Legislature, nonprofit ERCOT is tasked with ensuring reliable electric service for 90% of the state, managing the flow of electric power to more than 26 million Texas customers. (source)

Before deregulation, power generation, distribution and customer service were handled by single entities. The deregulated market separated these aspects of production and delivery. Power generators produce and sell electricity on the wholesale market, Transmission and Distribution Service Providers own and maintain the means of delivery, and Retail Electricity Providers purchasing power and selling it to consumers.

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Why doesn’t it add up to 100%?

Not everyone is able to participate in the retail choice program, depending on where you live and who owns your utilities. If you’re in an area with utility companies exempt from deregulation (outside of ERCOT management) or where municipal or cooperative utility companies have opted out of the program, you must buy electricity directly from your utility company.

Abbreviation cheatsheet

  • ERCOT is the Electric Reliability Council of Texas, the nonprofit organization that manages the flow of electric service for 90% of the state.

  • Other areas are covered by Southwest Power Pool, Midcontinent Independent System Operator and Western Electricity Coordinating Council.

ISO stands for Independent System Operator. ERCOT is an ISO.

PUCT is the Public Utility Commission of Texas, which regulates the state’s electric, telecommunication, and water and sewer utilities.

REC is short for Renewable Energy Certificates, which are issued when one megawatt-hour (MWh) of electricity is generated and delivered to the grid from a renewable energy resource. By choosing a renewable electricity plan backed by RECs, you’re supporting generation from renewable sources.

REP stands for Retail Electricity Providers. REPs purchase electricity from ERCOT to sell to customers. Pulse Power is a REP.

Deregulation puts you in control

If you do live in one of the state’s deregulated areas (two of the largest metros in Texas are included, Houston and Dallas/Fort Worth), you have more control over your electricity bills. You can compare plans across different providers and select a rate and plan that fits the needs of your home. And if you’re not getting top-notch customer service from your current provider, you have the opportunity to switch.

More competition leads to cutting-edge innovation

Hundreds of providers are looking for ways to stand out from the crowd and gain your attention. Some providers, including Pulse Power, are supporting energy generated by renewable sources, like solar and wind power. We do this by offering plans backed by Renewable Energy Certificates so even though you can’t choose where your electricity is sourced from, you can still support generation from renewable resources.

Summing it up

Thanks to energy deregulation, you’ve got your pick of providers and plans, putting you in the driver’s seat to choose one that best meets your needs. And because of the competition for your business, providers will strive to give you better customer service, attractive pricing and innovative plans that make a positive impact. That’s something to be proud of, Texas!

Need help choosing a plan that’s right for you?

We’re here to help. Enter your zip code and see your plan options here — and if you need help deciding, just give us a call.

Pulse Power was created by Texans who know deregulated electricity. We keep things simple so finding the right provider is easy. Pulse Power, LLC | Houston, TX 77001 | PUCT #10259 | 833-785-7797