Electricity Deregulation in Texas | Electricity Company | NEC Co-op Energy

Historically, only one electric company in Texas was responsible for everyone’s residential energy needs. This includes generation, distribution, transmission, and billing. Come year 1999, legislation was unveiled that would ultimately change how Texans purchase electricity. Senate Bill 7 called for the eradication of monopoly providers and regulated energy rates.

In 2002, Texas lawmakers deregulated the electricity market. This only affects the generation of power, not its distribution or transmission. The Transmission and Delivery Utility (TDU) is responsible for delivering electricity to homes and businesses. They are the company that owns the power lines and poles – the infrastructure. They are the ones whom you should call to report downed wires, power outages, or damage to your electric meter.

For more information about the various TDUs in Texas, click on the links below:

Consumers can choose who they purchase their electricity from, but not who distributes their power. Hence, energy retailers, also known as Retail Energy Providers (REP), compete to sell power throughout the state. Eventually, this resulted in a power market of sorts, where retail companies compete for the consumer’s business, and where energy suppliers sell their electricity to the highest bidder.

About 85% of Texans live in a deregulated area. If you live in a deregulated market, you have the power to choose your Retail Energy Provider (REP).

For a list of deregulated cities in Texas, click here.

Electricity deregulation in Texas has an end goal of making power cheaper for Texans. Ideally, the deregulation should bring the rates down. But despite deregulation, a lot of residents in Texas have not seen cheaper energy bills. According to a study provided by The Texas Tribune there are a majority of cases where people are paying more for energy – hundreds of dollars every year, in fact.

Ask anyone in Texas paying a utility bill, and they will most likely tell you that deregulation doesn’t feel like a success. Thousands of consumers are hopping from one utility company to another, hopeful for the next best thing – the lowest advertised rate – and each time, they are left confused and frustrated.

Digging deeper

Before you sign a contract on a major purchase – say, you are buying a house, it is essential that you take some time to read the fine print. This is where some of the most critical information on any agreement is. Sadly, a lot of people overlook this significant section.

Before you choose an electric company and sign up for an energy plan, take the time to read all the details. The Public Utility Commission of Texas requires all utility providers to provide an Electricity Facts Label (EFL), and this is the section of your contract in fine print. By taking the time to read this label, which has vital information like power generation sources, fees, taxes, and contract terms, you will know what you are truly signing up for. It’s pretty much like reading the nutritional label so you can make an educated decision on your food choices.

A lot of retail energy providers advertise their prices based only on the kilowatt per hour rate – and their gimmicks to sign up more customers get more and more creative by the year. Chances are, if the advertised rate is low, there’s usually a list of added fees that come with it.

Now you are aware why most big-shot electric companies fail to retain their customers. It’s not because their rates are not competitive or their advertisers didn’t do a great job. It’s because their customers feel that they can’t trust them, and people do not normally reinvest in a relationship when the trust has been broken.

The NEC Co-op Difference

In private life or in businesses, all successful relationships are built on trust. NEC Co-op Energy is a Texas electricity provider that understands this perfectly.

We understand that trust means confidence. 
We understand that every interaction with our members is an opportunity to nurture trust and build good relationships.
We understand that even the most loyal customer doesn’t stay based solely on pricing. 

Members that truly trust and are happy with their electric company is not something that you come across every day. Our members stick around because they trust that we’ll always do right by them. They trust that we have their best interest and experience in mind.

Our members enjoy friendly service, honest prices, and great rewards! Don’t just take our word for it. See for yourself here.

Comparing electricity rates? Get the facts first by using our Real Rate Calculator.


“Transmission and Distribution Rates for Investor Owned Utilities,” Public Utility Commission of Texashttps://www.puc.texas.gov/industry/electric/rates/tdr.aspx

“The History of Electric Deregulation in Texas,” Texas Coalition for Affordable Powerhttp://tcaptx.com/downloads/HISTORY-OF-DEREGULATION.pdf

“Seize Your Power to Choose Texas Electric Rates,” Texas Electric Rateshttps://www.texaselectricrates.com/

“Deregulated Electricity a Mixed Bag for Consumers,” The Texas Tribunehttps://www.texastribune.org/2015/08/12/report-deregulated-electric-utilities-narrowing-pr/

“The Electricity Facts Label,” Public Utility Commission of Texashttp://www.puc.texas.gov/industry/Electric/rates/facts/efl_brochure.pdf