Deregulation Gives Consumers the Power to Choose

At the turn of the millennium, 1999, more than just the calendar was about to change in a big way. This was the year that a new form of energy sector structuring began to take shape in Texas. This was the year that deregulation of the electric utilities was devised to give consumers the power to choose their energy provider.

            Up until 2001, utility companies had the final say on the price of electricity. They set the rates for all residential and commercial electricity, giving consumers very little choice in how much they pay for their energy. On January 1, 2002, Senate Bill 7 took effect and deregulated the energy market in the state of Texas. This took the power to set the rates away from utilities and allowed a fluctuating free market to take precedence. This provided customers with the power to choose who they purchased electricity from.

            The bill has opened up the floodgates of electricity with dozens of providers operating all over the state, and each one offers several plan options. No longer do customers have a measly 2 or three options to choose from, but rather hundreds. Long term, short term, variable, fixed, renewable, nonrenewable; all of these options became available to customers with deregulation.

            The power to choose an energy provider means customers can find the plan that best suits their needs, whether it’s contract length, cost, or energy source. Previously, there was only the sources that the utility pulled from, and they set the contract lengths based on their own terms. Consumers didn’t have the opportunity to take advantage of money saving renewals when prices were lower due to less demand or an overabundance of energy. Now, prices fluctuate daily, and consumers can change plans and providers when their contract expires or, if they’re on a variable plan, at any time they like.

            With hundreds of plans to choose from between dozens of providers, and no penalties to switch plans or providers, the power to choose your own electricity plan really seems like the way to go. It’s almost a wonder why we didn’t start doing this sooner.