Texas Deregulation

Energy Deregulation Brings the Benefits of Competition to the Consumer

Competition keeps prices down for the consumer and is the basis for the American way of life, but there have been some industries in which monopolies—at least regional monopolies—have been allowed to exist for logistical reasons, albeit with government regulation. Utility companies have been granted regulated monopolies because they own and maintain the wires, poles, pipes and equipment that deliver the electricity to your home. Each state government has a public utilities commission, sometimes called a public service commission, which oversees these utility companies and has to approve of the rates that these companies set for their products.

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The Benefits of Deregulation

Texas instituted energy deregulation, which gives power supply companies the chance to compete against each other, ultimately creating a better market for consumers. The utility company in each area of Texas still owns the poles and wires through which the electricity is delivered to the consumer; the supply however, is deregulated and opened up to competition. This gives the consumers the ability to choose the supplier that offers the best rates, creates energy with a more environmentally respectful process or even accommodates the contract terms that meets their individual financial budget. With energy deregulation in Texas, consumers no longer have to pay whatever their local utility company charges for electricity. They are free to search for a power supplier that best meets their individual stipulations. Energy deregulation is a simple way to give consumers more control over what they pay for electricity.

In most cases, the supply charges appear right on the same bill that the customer receives every month from their local utility company. The supply charges are itemized separately from the delivery charges, and the bill indicates which company is providing service. Your service won’t be interrupted if you switch to a different power company, and you won’t need new electrical equipment installed on your home. You will receive the same constant flow of electricity to your home, but you will get to reap other benefits of Texas deregulation.

Common Concerns

Sometimes, consumers who are thinking about taking advantage of Texas deregulation can become concerned about what could happen if their supplier were to suddenly go out of business. Would they be left without power and have to shop around for a new supplier? Not at all. In that case, the utility company would simply purchase that customer’s power on the open market and service would continue uninterrupted. If there is ever a power outage, the consumer need only contact their local utility company, just like they always do. Their equipment will be serviced and their electricity flow will be restored like it always is.