When shopping for Texas electricity providers, make sure that you know the terminology behind the industry. By understanding the common terms and concepts, it will be easier for you to choose a provider that fits all of your requirements.
• Aggregator: An aggregator is an entity that has registered with the Public Utility Commission in order to buy electricity in bulk for its members. An aggregator may represent a business, a religious group, a neighborhood organization, or many other groups of customers.
• Do Not Call List: Customers can sign up for two of the Public Utility Commission’s No-Call lists: one that prohibits telemarketing calls from Retail Electric Providers, and one for all other telephone marketers.
• Fuel factor: The fuel factor allows Affiliate Retail Electric Providers to recover their costs for the fuel used to generate electricity. The fuel factor is set by the Public Utility Commission of Texas, and is used only to recover costs—Affiliate REPs cannot make a profit on fuel costs.
• Peak demand: This refers to the highest 15- or 30-minute electricity demand during a 12-month period (not necessarily a calendar year).
• Provider of Last Resort: If you are currently in a relationship with a Retail Electric Provider at the time they leave the market, the Provider of Last Resort will serve as the back-up provider. You can then officially sign up for service with the POLR or choose another Retail Electric Provider.
• Residential customer: One of the four customer classes, referring to private households using energy for common needs like heating, cooling, and cooking. The other four classes are commercial, small commercial, and industrial.
• Retail Electric Provider: A company that sells electricity to customers and has been certified by the Public Utilities Commission of Texas.
• Rural Electric Cooperative: Also known as a co-op, this is an electric utility that is owned by the customers. Co-ops distribute electricity to their members and receive lower-cost financing from the United States government. Co-ops in Texas can choose whether or not to opt into the competitive market.
• Terms of Service: The Terms of Service refer to the contract between a customer and a Retail Electric Provider. The Terms of Service include important details like fees and service length.
• Transmission and Distribution: The process by which electricity is delivered to your home or business via your local wires company. The local wires company maintains the poles and wires around your home in good condition.
You can find more important terms to know at the Power to Choose Glossary, which was used as a resource for this article. The Glossary is one of the many resources offered through the Texas Electric Choice Education Program.