Electricity in Texas was formerly regulated by the state and electricity rates were set by the Public Utility Commission of Texas (PUCT). There was only one company that was in charge for generating, billing, support and selling energy to consumers in Texas. As it was the only sole power provider of the state, it became a monopoly.

Due to disadvantageous effects of a monopolistic market to consumers, the Texas Legislature passed a law that would eradicate electric company monopolies and reduce government control of electricity rates through deregulation. Generally, the idea behind deregulation is to create Retail Electricity Providers (REPs) and these multiple providers would be competition to help keep the prices low.

In 2002, the Texas Legislature finally passed the Bill 7 (SB7) that deregulates the state’s electricity market. This bill has provided consumers the opportunity to choose electric companies in Texas. The deregulation law has led to the separation of operation components of the company (generation, billing, support and sales of electricity). And with the stipulation of this law, the Texas electricity rates are expected to decrease and eventually result in cheaper power for consumers.

Electric companies in Texas are on a list that helped create one of the most successful competitive electricity markets in the United States of America. Texas is also one of the states in US that has the fastest development and generation potential in terms of the electricity market, with its power generation capabilities of over 25 gigawatts installed during the past few years. The dynamics of marketing the electricity to consumers in Texas are handled by Retail Electric Providers (REPs) that are licensed by the state. There are approximately 40 Texas electricity providers that offer different electric rates and plans to private and commercial customers. This signifies that Texas electricity market is actively operating and being enjoyed by the consumers.

Choosing wisely an electricity provider in Texas can be tiring and a hassle to do for the casual consumer especially in comparing electricity prices between the various electricity companies.