Awareness Expert Reviewed

Texas Electricity Deregulation, Explained

Why Texans shop for power and most Americans don't — and what that means for your bill.

By Sarah Mitchell, CFA 6 min read Updated April 2026

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Key Takeaways

Texas Senate Bill 7 (1999) split monopoly utilities into generation, transmission, and retail.
About 85% of Texas can shop for retail electricity; the rest are on municipal utilities or co-ops.
Austin (Austin Energy) and San Antonio (CPS) are the two biggest non-deregulated metros.
Texas residential rates have tracked national averages — the savings come from informed shopping.

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What deregulation did (and didn't)

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The map: deregulated vs. regulated areas

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Who the players are

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What it means for your choices

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Is competition actually saving you money?

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“Deregulation didn't make Texas electricity cheap. It made it shoppable. Whether you save depends on whether you shop.”

— Sarah Mitchell, CFA, Energy Market Analyst

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The Bottom Line

Why Texans shop for power and most Americans don't — and what that means for your bill.

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Sarah Mitchell, CFA

Energy Market Analyst

Sarah covers the Texas deregulated electricity market with a focus on rate analysis, consumer protection, and the math behind every plan. She holds the CFA charter and has 8+ years on the energy desk.

Editorial Standards

How we research and review.

Independently researched. Every claim is verified against primary sources (PUCT, ERCOT, EFLs).
No paid placement. Rankings are never influenced by advertising or referral compensation.
Reviewed by Sarah Mitchell, CFA. Articles are reviewed by certified energy market analysts.

Read our full standards

Sources

Texas Senate Bill 7 (1999) — Electric Choice Act
PUCT — Retail Competition Reports
Texas Coalition for Affordable Power — Deregulation Studies
EIA — State Electricity Profiles

Sources are cited for informational purposes. Data may have been updated since publication.

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