Digging Deep into Electricity Deregulation

Deregulation is just a fancy term for giving consumers the power to choose their own electricity plan. For over a decade, Texas electricity rates have dropped thanks to this deregulated market. No longer could utilities monopolize the energy market, charging whatever they felt, because consumers couldn’t switch providers. Now, utilities have split into three categories: TDSPs, REPs, and Power Generators. Transmission and Distribution Service Providers (TDSPs) are what remains of the original utility. They are sometimes called the “wires company” or “utility,” but they no longer solely determine the price of electricity.

 

Power Generators

Power generating facilities, like wind and solar farms, coal power plants, nuclear power plants, or natural gas power plants all generate electricity and feed it to the local grid, which is maintained by the TDSP. Aside from when new laws affect the regulations governing electricity generation, such as new environmental restrictions, power generators don’t really directly affect your electricity cost, if you have a locked in rate.

 

TDSP

 The TDSP maintains the power lines that bring electricity to your home, read your meter, and restore power if it is lost. Part of your electricity bill reflects a charge for the service of delivering electricity to you over these lines, but like the power generators, they don’t have much direct effect over your bill.

 

REP

REPs are the newest part of the deregulated market. Retail Electricity Providers directly sell you electricity, based on market conditions. These market conditions affect the cost of your electricity. If trade routes or supply becomes stringent, new or variable rate customers will see higher rates for their month to month bill. When you have a fixed rate plan, your rate won’t go up or down until your contract is up for renewal. Contracts can last between 3 and 36 months, usually. Fixed rate plans give you security against sudden rate hikes due to weather, conflict, or supply disruptions, but should market conditions become more favorable, you are still locked into the higher rate.

 

Plans

Most plans between REPs are the same. Variable rate plans allow you to change at any time, but the rates are generally higher and are directly affected by market conditions. Fixed rate plans are locked in for the duration of your contract, barring any change in policies enacted by the government. Plans can also include energy from renewable sources like solar or wind, and the plan’s Electricity Facts Label (EFL) will tell you what percentage of the electricity comes from renewable sources.
If you’re looking for the cheapest electricity rates in Houston, Shop Houston Electricity will help you in your search. Whether you’re looking for variable rate plans, fixed plans, renewable plans, or just cheap electricity, Shop Houston will scour the competing REPs to find you the best deal, giving you the power to choose the electricity that’s right for you.