What is Power to Choose in Texas?
“Power to Choose” Means Just That
Instead of being assigned to a single utility-owned company, you have the freedom to shop for the plan, price, and provider that work best for you. This guide breaks down what that means, why it exists, and how it affects your electricity service.
Texas’s Deregulated Electricity Market
Since 2002, most of Texas has operated under a deregulated electricity system. This structure separates electricity generation, delivery, and retail into distinct roles—giving Texans in eligible areas the ability to choose who supplies their electricity. The goal is to create competition, improve transparency, and give consumers more control over how they buy power.
Who Does What in Texas’s Electricity Market?
To understand how deregulation works, it helps to know the key players involved and what each one is responsible for:
Power Generators
These are the companies that produce electricity. They operate power plants fueled by natural gas, wind, solar, coal, or other sources. Generators sell the electricity they produce into the wholesale market. Consumers do not choose generators directly, but their energy provider may purchase electricity from certain types of generators based on factors like price or renewable content.
ERCOT (Electric Reliability Council of Texas)
ERCOT is the grid operator that manages about 90% of the state’s electric load. It oversees the flow of electricity from generators to local utilities, maintains grid reliability, and operates the state’s wholesale electricity market. ERCOT is responsible for balancing supply and demand across the grid in real time to prevent outages.
TDSPs (Transmission and Distribution Service Providers)
Also known as utilities, TDSPs own and maintain the power lines, poles, meters, and infrastructure that physically deliver electricity to homes and businesses. They read your meter, handle service interruptions, and restore power after outages. You cannot choose your TDSP—it’s assigned based on your address.
Examples include:
CenterPoint Energy (Houston area)
Oncor (Dallas and surrounding areas)
AEP Texas (South and West Texas)
Texas-New Mexico Power (scattered areas)
Lubbock Power & Light
Your TDSP remains the same no matter which provider you choose.
REPs (Retail Electric Providers)
REPs are the companies you choose from when selecting an electricity plan. They buy electricity from the wholesale market, package it into plans, and sell it to consumers. REPs set the rate you pay, manage your contract, provide billing and customer service, and may offer tools to help you manage usage.
This is where the power to choose comes in, as REPs compete for your business by offering different rates, contract lengths, renewable energy options, and customer experiences. Rhythm is one example of a licensed REP operating in Texas.
PUCT (Public Utility Commission of Texas)
The PUCT is the state regulatory agency that oversees the electricity market in Texas. It sets rules for REPs and TDSPs, enforces consumer protection laws, and ensures the market operates fairly. The PUCT also manages PowerToChoose.org, the state-run website that helps consumers compare electricity plans.
Why It All Matters
This system works together to ensure Texans have access to reliable electricity while giving them the freedom to choose how they pay for it. You still receive power through the same infrastructure no matter which REP you select. What changes is who you buy from, how much you pay, and what kind of plan and service you receive.
Understanding these roles helps you make more informed decisions when shopping for an electricity provider.
Who Can Use Power to Choose?
Not every Texan lives in a deregulated area, but about 85% of the state’s population does, including people in and around:
Houston
Dallas–Fort Worth Area
Corpus Christi
Galveston
Plano
McAllen
Midland
Odessa
Waco
Many other cities and towns across ERCOT
Areas Not Deregulated
Some major cities—like Austin, San Antonio, Beaumont, and El Paso—still have municipally owned utilities or co-ops. In these places, residents don’t have the ability to choose their REP.
If you’re unsure whether you have choice, you can:
Enter your zip code on the upper right of this page.
Contact the Public Utility Commission of Texas (PUCT)
Why Deregulation Exists
Texas deregulated its electricity market with Senate Bill 7, passed in 1999 and enacted in 2002. The goal was to:
Encourage competition among electricity providers
Create more pricing options for consumers
Prevent monopolies from setting rates and limiting innovation
Increase transparency in electricity billing and service
In simple terms: the system was designed to give Texans more control.
Don't overpay for electricity.
What Power to Choose Doesn’t Mean
There are some common misunderstandings about what choice really entails. Let’s clear them up.
Your electricity delivery doesn’t change. The same TDSP (like CenterPoint or Oncor) still manages your power lines, meter, and outage restoration.
You won’t experience a power disruption when switching REPs. Electricity flows uninterrupted when you change providers.
You can’t choose no provider. You must enroll with an REP, or one may be assigned to you by default (called the Provider of Last Resort).
“Power to Choose” is not a company. It’s a policy—and also the name of a state-run comparison site, PowerToChoose.org.
What You Can Control
When you live in a deregulated part of Texas, Power to Choose means you can:
Shop for a better rate
Select from different contract lengths and billing structures
Choose 100% renewable electricity, if that matters to you
Find a provider with clearer billing or better customer support
Switch if your current plan no longer fits your needs
That freedom can save you money, improve your experience, and align your energy use with your personal preferences.
What Comes Next?
Now that you know what Power to Choose means, the next step is learning how to use it well. That means looking beyond the advertised price and understanding how plans really work.
