The short version

Before 1999, one company owned the power plants, the wires to your house, and the right to bill you. You didn't choose anyone — the company in your area chose you.

Senate Bill 7 ended that. Texas broke the old utility into three jobs:

  • Generation — companies that make electricity at power plants.
  • Transmission and distribution — the utility that owns the wires and poles that bring power to your house. You don't pick this one. It's geographic. In Houston it's CenterPoint; in Dallas/Fort Worth it's Oncor.
  • Retail — the company that sells you the electricity and sends you a bill. You pick this one. There are 100+ of them in Texas.

That last piece — retail — is what "deregulation" means in practice. You shop retail electricity providers the way you shop cell phone carriers. The wires stay the same. The meter stays the same. Just the company name on your bill changes.

Why it matters for your bill

Two numbers on your bill come from two different companies.

Your retail provider (your REP) sets the energy charge — the per-kWh rate they advertise on comparison sites. Your TDU (the wires company) charges a separate delivery fee, also per kWh, plus a fixed monthly fee. The TDU fee is set by the Public Utility Commission and passes through on every plan. You pay it whether your REP is TXU or Reliant or 4Change. It's not negotiable and it's not something REPs compete on.

The trick: when a REP advertises "8.5¢/kWh," they're usually quoting just the energy charge, or they're quoting a bundled rate at 2,000 kWh that obscures what you'll pay at lower usage. The real number at your home depends on how much you use and how the plan is structured.

Who isn't in the deregulated market?

About 85% of Texas homes can shop. The exceptions are mostly municipal utilities and co-ops that opted out in 1999:

  • Austin Energy (Austin) — city-owned, no choice
  • CPS Energy (San Antonio) — city-owned, no choice
  • El Paso Electric — vertically integrated, no choice
  • Lubbock Power & Light — municipal, partial choice in some ZIPs
  • Most rural electric co-ops

If you're in one of those areas, entering your ZIP on this site will say so. There's nothing to shop.

What you can do with deregulation

Switch providers any time your contract's up (or any time if you're month-to-month). No permission from your TDU. No new wires. No gap in service. The TDU reads your meter the same way either way — just the bill shows up from a different company starting 1-3 days after you switch.

Pick by plan type, term length, renewable content, price at your actual home, whatever matters to you. The state used to hand you a government-run list. Today you pick the tool that shows you the real math.