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Texas Power: Understanding the Complex Market
If you're interested in understanding what the world of Texas power is all about, there are several things to consider. First, the unique extent of the state's power grid makes Texas an interesting area within the larger United States power structure. Second, you have to examine all the types of Texas power companies. Lastly, there's a lot to learn about how elements of the Texas energy system operate on a daily basis.
Wait. There are different types of Texas power companies?
Yes, there are. Texas has a deregulated electricity market, meaning that Texas power companies are broken into several categories: generation companies, utility companies and retail electric providers. Prior to deregulation, all of these companies were rolled into one – the utility company. Beginning in the 1970s, American politicians began considering deregulation of major industries as a catalyst for generating competition. As a result, many states across the country have now embraced deregulation in the energy industry, though Texas was one of the first to make it mandatory for customers to choose a provider.
What does each type of Texas power company do?
All of the Texas energy companies contribute in a different way to delivering electricity to your home or business. Generation companies produce electricity, retail electric providers sell retail electricity to consumers, and utility companies deliver electricity to individual homes and businesses. Your utility company depends on where you live. No matter which retail electric provider you choose, your utility company will remain the same. The utility companies in Texas work with the providers to make sure your energy is delivered safely and efficiently.
Today there are dozens of retail Texas power companies serving customers in various utility service territories. These retail electric providers are the competition arm of deregulation, and in that sense they are the crux of why deregulation was instituted in the first place. By giving consumers more choice, in theory the price of everyone's electricity supply comes down as companies compete against one another for customers. But understanding the world of Texas electricity is more than just understanding what each type of Texas energy company adds to the mix.