Everything you Need to Know About Energy Deregulation in Texas: Frequently Asked Questions

What does energy deregulation mean?

Energy deregulation is an example of putting the power in the hands of the consumer. It means that consumers, such as individual homes and businesses, have the freedom to choose which company they would like to supply their electricity, from a wide selection of retail energy providers (REPs) across the state. This is in contrast with other states and countries, where consumers are unable to choose an energy provider, and instead must pay their energy dues to a single utility company that serves an entire region. 

When did Texas deregulate energy?

Texas’s energy market became deregulated in 1999 when the Texas Senate passed Bill 7. This officially came into effect in 2002, when deregulation became implemented. Since then, more than 100 REPs have popped up across the state, all competing to supply power to homes and businesses.

Is all of Texas deregulated?

No. Not all of Texas is deregulated. Approximately 85% of the state’s energy market is deregulated. The remaining 15% do not have the opportunity to choose their own REP. This includes some major cities like Austin, San Antonio, and El Paso.

Why did Texas implement energy deregulation?

Texas, being the lone star state, is notorious for being unique in many ways and for running things a bit differently than other states. It has pushed for fewer regulations across the board, including the energy market. The main reasoning behind deregulating the energy market was to increase choice for consumers, thereby increasing competition for business.

How does energy deregulation impact me?

Because of deregulation, many REPs are now forced to compete in generating, distributing, and selling energy. With high competition across more than 100 REPs in Texas, this means that prices are ultimately lower for Texans as compared to states and countries that are not deregulated. The advantage is with the consumer. They have the power to choose, and as a result, REPs will constantly find creative ways to offer enticing plans in order to attract new customers their way. And there is something to show for it: the average Texan pays 17% less in energy per kWh than the rest of the nation!

How can I choose a Retail Energy Provider (REP) from all the different options available within my region?

With more than 100 options to choose from, it can be daunting to know where to begin. One of the best ways to choose a REP when doing your research for an REP is to compare their Electricity Facts Labels (EFL), which is a facts sheet provided by each REP summarizing the features of each plan they offer. Consider the following factors: what is the electricity rate (cost per kWh) being offered by this REP? Is the plan fixed or variable? What is the REP’s track record and how long have they been operating for? Does the REP invest in renewable energy at all, and in this way, are they able to offer green plans for you? How long is the contract term for, and are there any penalties for changing plans or breaking a contract? And how is their customer service? These are all important factors to keep in mind when choosing an REP. 


Arrow Energy is an REP with more than 100 years of collective experience in the energy industry and provides 100% clean options. Our diligent customer service team believes in educating and empowering the customer. If you have questions about how to choose an REP to meet your energy needs, contact an Arrow Energy consultant today.