Fifteen years ago, the Texas energy market began a daring experiment – applying the American dream of competition and free enterprise to a sleepy, monolithic electricity market.

On that New Year’s Day, millions of Texans were freed from their monopolies and allowed to choose from different providers and plans.  The transition was successful, and fifteen years later Texas proudly boasts the most successful competitive electricity market in the world.

Central to consumer choice is the retail electric provider (REP), a company specializing in power plans from traditional to renewable sources, from yearly fixed to monthly variable pricing, and from products that simplify customers’ lives to promote energy efficiency.  Sadly, not every Texan can choose a provider, but the pencil-sharpening exercise of stiff competition has also pushed ongoing monopolies to become better at their business.  Competition benefits everyone.

Today, there are many REPs available to Texans, so… how do you know which one is right for you? First, let’s review some basics.

Then & Now

Prior to 2002, electric consumers had only one source for electricity – the local utility. The rate paid was determined by the cost of delivering power to your home and regulated by the state, no matter whether you rented, owned, used a lot or used a little. There was little incentive to encourage conservation or smart energy use; utilities earned more by spending more and selling more electricity.

Wise policymakers knew there must be a better way, and they spent years crafting a more efficient system to benefit consumers. That effort led to the passage of Texas Senate Bill 7 in 1999 and the intricate details of creating a new market over the next three years.  The outcomes since 2002 have been nothing short of extraordinary.

Within competitive markets, families can choose a plan that best fits their particular budget and lifestyle. REPs must serve customers well and continuously improve, or those customers will find another provider.  Another plus? Competition in the market has driven energy prices to a cost competitiveness that has never been seen before.

For instance, today there are month-to-month plans for those with short term leases, time-of-use plans like Free Weekends for those with busy weeks away from home, and Fixed-rate Plans for rate certainty.  Homeowners can lock in a rate to prevent unexpected price increases. The choice is yours!

Delivery vs. Supply

To help with any confusion about ‘who does what’ in terms of getting energy to your home, here’s a quick primer.

Local utility companies, like CenterPoint and Oncor, are responsible for delivering your power. They operate and maintain the transmission system of wires and poles that bring power to your home. Think of them as the roadways leading to your home and community.

Your chosen REP supplies your energy product and, in addition, offers customer service and technological and product innovations. They don’t operate or maintain the ‘electric highways’ but – a bit like 18-wheelers — they use those highways to get their energy supply efficiently to multiple destinations.

Shopping for Energy

As energy companies compete for your business through pricing, innovation and service, perhaps some key questions will assist you in making the right choice. How much energy do you use in a month? Do you prefer a short-term rate or a long-term rate? Do you use more on weekends than weekdays?  The answers can help you decide which REP is right for you, and make sure you find one with complete transparency.

Helpful questions include things like:

  • Are there minimum usage fees?
  • Does the rate include all costs?
  • What are my payment options?
  • Are unique rewards programs available?
  • Are there way to earn bill credits, like referral programs?
  • Does the provider offer strong self-service tools, like online account management? How is their customer service?
  • What kind of energy usage insights are offered to help you use less and manage your costs?
  • Do they support the local community or charities?

How “Green” Can You Go?

As it pertains to REPs, as green as you want! There are suppliers offering plans that allow you to designate up to 100% of the energy you purchase to come from green renewable sources like solar and wind.

One of the many successes of the Texas competitive model has been the addition of renewable resources.  Texas leads all states in renewable resources, and the addition of most of that green energy came through the competitive market, not at the expense of the taxpayer or utility ratepayer.

Having that choice between green or traditional products is among the benefits of the Texas market.  When you choose green power, you’re sending an important signal to power plant developers:  “I prefer renewable energy, so please make more!”

Although energy is the biggest component of your decision to pick a REP, it is not the only one.  A smart, readable and informative electric bill can help you save money and understand where electricity goes in your home.  Smart thermostats, lighting, alarm systems and other devices are offered to make you more comfortable, productive and energy efficient.

Companies also engage in valuable community outreach, and your choice may assist people in your community or around the world in various ways.

  • New smart home technology can help you control your usage
  • The Plenti program lets you earn rewards with each payment

Competition in the energy markets has driven costs down and alternatives up, along with new technologies and customer service options that benefit your bottom line.

So now more than ever, the choice is yours.  Choose wisely!