Electricity Deregulation in Texas

Rhythm Energy on Friday, July 9, 2021
Blog Hero: Electricity Deregulation in Texas

Everything is bigger in Texas, including the success of deregulated energy. Read on to learn about energy deregulation, how it works and how it compares to energy markets in other states.

Energy Deregulation in Texas

Back in 2002, most Texas energy markets became fully deregulated, giving Texans a choice in their electricity provider (including natural gas and renewable energy providers). Prior to deregulated energy, Texans were served by their local utility company. Post deregulation, the local utility companies still exist (and remain regulated) - they are the owners and maintainers of the power lines and supporting infrastructure that transmits and distributes the energy from the power generation plants to Texas homes and businesses, but these local utilities no longer provide retail services for customers.

This is the biggest difference between Texas and the other deregulated energy markets in the U.S. In the markets outside of Texas, the local utility is the default retail service provider for residential consumers and business owners. Having a default power supply provider in states like New York, Massachusetts, and Ohio is not truly a free market and reduces the opportunity for competition, as well as investment in sustainable infrastructure. That’s why if you ever live in those places, you’ll quickly see much lower customer engagement and market participation even though consumers in those states technically a choice over their electric company.

Over the last 20 years and as a direct result of electricity deregulation and the high participation from retail providers, Texans have benefited from access to a variety of electric plans from different energy suppliers. And because of customer choice, Texans can select an electricity plan that aligns with their budget, lifestyle, and values. In addition to competitive pricing and varying energy plan structures—which range from prepaid to 100% renewable—Texans are also rewarded with innovative products and services to inform and educate them on their consumption behavior. This includes rewards like digital communications, real-time data, bill forecasting, usage spike notifications, and even tips and recommendations on how to be more energy conscious.

Today in Texas, there are more than 100 energy providers, and more than 26 million Texans (90% of the state) have a choice when selecting their electricity provider. This easily makes it the largest deregulated electricity market in the country. And with 85% of commercial and more than 55% of residential customers have switched energy suppliers at least once, many claim it’s also the most successful deregulated energy market.

The Benefits of Deregulated Energy

Competitive Pricing

When you reduce regulations and have fewer barriers of entry for competitors, it creates a marketplace that stimulates competition, which often results in lower electricity prices for consumers. It opens the door for all types of business, and—in an ideal world—sparks healthy competition among energy services.

Product Innovation

Another direct result of market competition is that companies are incentivized to be more innovative in their product and service offerings, creating more value for consumers.

If a company is a sole participant within an industry, innovation is unnecessary. Think flip phone vs. smartphone. Nobody uses flip phones anymore, because innovation made that old technology obsolete.

Improved Service Quality

When you only have one market participant in the energy industry, service quality is usually an afterthought, because where else are you going to go? Energy deregulation has helped reestablish focus on the customer and provide another opportunity for competitors to differentiate by offering a more enhanced customer experience.

And you can find Rhythm Energy right at the peak of this change.

Offering 100% renewable energy plans, innovative technology, and 7-days-a-week customer service, you can get an electricity provider you can count on while doing your part for a cleaner, more sustainable future for Texans.

To learn more about the types of energy plans Rhythm Energy has to offer, check out our Texas renewable energy plans or give us a call at 888-7-RHYTHM.

Categories: Electricity 101
Tagged: texas energy, texas electricity, texas green, energy deregulation, electricity deregulation, energy market, texas energy market, rhythm news, energy explained

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