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Senate Bill 7 (SB 7) was the 1999 legislation that brought about a change in the way Texans buy electricity. The purpose of unveiling the law was to eliminate the monopoly of agencies like PUCT (Public Utility Commission of Texas) and energy rates in the regulated market.
However, the Texas Senate Bill 7 for electricity deregulation was not the first of its kind. Earlier, California was one of the states that adopted the deregulated energy market model. But the beginnings were a nationwide trend that took effect in the 1970s, when deregulation was the norm in various sectors, such as the telephone service, airlines, banks, and railroads.
While Texans had always enjoyed low electricity rates compared to other states, their average energy usage was far higher than that of the nation. Owing to the great Texas summer heat, residents relied heavily on air conditioning systems. When the bill was introduced, Texas was brimming with cheap power supplies to cater to several heavy industries.
The CAPP (Cities Aggregation Power Project), the non-profit coalition created in 2001, was instrumental in helping Texas electric companies to negotiate for secure affordable energy prices from major power generators.
Finally, the Texas energy market deregulation took effect in 2002, which divided the state's energy operations into three separate entities:
1. Energy generating companies that own and operate power plants, registered with the PUCT
2. Transmission and distribution agencies, which are regulated utility companies
3. Retail electric providers that purchase wholesale power and re-sell it to customers on low prices
The significant provisions made in the bill included new renewable energy mandates, the first-ever authorization for retail electric providers to compete for low prices, and more.
In 2002, the PUCT gave the Texas power grid ERCOT the responsibility to control and monitor the competitive electricity market in Texas - both wholesale and retail. The independent organization is also responsible for maintaining the reliability of the Texas deregulated electricity system.
Texas residents are no longer burdened by the high electricity rates from the monopolistic energy providers. Since the electricity industry opened itself up to the competition in 2002, the residents are given the Texas electric choice.
Texas electric choice is the Texans' power to choose their retail electric provider. Earlier, the electricity supply of the whole state was controlled and managed by a single provider, whether it is the transmission, distribution, or sale of energy.
Currently, while most cities within Texas have deregulated energy options, some areas are still regulated. Now, approximately 75% of residential and commercial energy consumers can compare and shop electric rates in Texas.
Meaning, with the electric choice, Texans do not have to stick with their current electricity provider and pay high energy bills. They can compare the best deals from top electricity providers by Zip code.
Besides getting to choose the cheapest Texas electricity rate plans, customers also enjoy:
SB 7 had established a provision that ensured that every customer receives a reliable power supply in the deregulated energy market.
In case you are unable to choose an electricity supplier on your own, or if your current energy provider suddenly went out of business, the PUCT has designated the Providers of Last Resort in all Texas deregulated territories. Your POLR (Provider of Last Resort) depends on your location and whether you are a residential or commercial energy consumer.
Indeed, Texans have the power to choose alternative electric providers. But not all plans are equal, in terms of the type of rate plan, average usage, and source of energy.
For instance, the cheapest plans listed on the PUCT's official Power to Choose website, you can see the residential electricity plans for a monthly usage of 500, 1000, and 2000 kWh. But the fact is that the electricity prices for anything lower or higher than the usage limit vary drastically.
As your monthly energy consumption varies, so does your electricity bill. However, some retailers have aced playing the game of hidden rates. They may not give out the full rate profile, which may include delivery charges and non-recurring fees.
When you compare electric rates, it is crucial to spot any hidden charges in a deal. That means reading the fine print on the Electricity Facts Label (EFL) for each plan and finding out what you will be paying across all your usages. This tedious task is more than many Texans can take, which is why we have built a seamless way for you to compare and shop cheap energy rates from the best electricity providers by Zip code.
Shop Texas Electricity is one platform where you can compare power plans in a transparent, no-gimmicks search. Our website offers a more viable solution for your electricity needs.
We provide our customers with community support in helping them narrow down their options when looking for cheap electricity in Texas.
Maybe you like to save on your home electricity bills and use it for more meaningful things. Or, you own a business and are looking for more sustainable options; then use your power to choose business electricity for less expensive rates.
Since you live in a deregulated energy market, you have the power to choose Texas retail electric suppliers. But you will be confronted with a variety of plans, term lengths, and prices. This could be a little confusing, but it is easy to understand the differences between these plans.
Texas electricity rate plans for residential customers are mainly of two types: fixed and variable. There are also some energy plans where you pay the bill upfront. Depending on your needs and your living situation, choose the plan that best suits you.
Fixed-rate plans are predictable electricity plans that you can lock for the entire contract length. You pay the same cost per kilowatt-hour of your electricity usage every month, irrespective of the market price fluctuations. Most fixed rate electricity plans carry a cancellation fee if you decide to end the contract early.
If you are like many Texas residential energy consumers that are afraid that the electricity prices may go up, then it is best to lock in the lowest rate. This move will protect you against any price increase until the contract ends.
Unlike fixed-rate electricity plans in Texas, here, the electric rates change from month to month. Your bills from variable-rate plans are volatile, based on the fluctuations in the market.
If you estimate that prices may fall, then a variable-rate plan may be ideal for you. However, if the market prices rise, you will be paying more for electricity.
In a prepaid service, you pay the electricity bill in advance and monitor your usage through notifications from your provider.
The main advantage for these no deposit prepaid electricity plans is that you can pay whenever you wish, and there are no extensive credit checks.
Bundled rate plans were standard before the energy market deregulation took effect. The energy rate and the delivery charges will be the same. If the TDSP rate changes, that information will appear on your energy bill separately, but the delivery charges won't be passed to you.
If you choose a bundled plan and there is no base charge, your electricity rate will be constant, and your energy bill will depend on your usage alone. Although it is rare, some companies still have bundled rates.
Unbundling means breaking down a service into its core components. Since 2002, unbundled electricity means power generation, transmission, and supply, separately.
Your bill will reflect the base rate and the delivery charge per kWh. Luckily, most plans you encounter when you shop electric rates in Texas are unbundled, fixed-rate plans. You can see the average prices for 500, 1000, and 2000 kWh consumption, and the electric company will pass the delivery rate through to you.
Minimum Usage: TDUs in Texas charge a base fee (per-cycle rate), you will be charged a fee if your monthly electricity usage is less than the set threshold. Meaning, you pay a higher per kWh rate for less than the minimum usage requirement.
Tiered Rate: In tiered rate plans, the price is fixed up to a usage limit, and beyond that, the electric provider may charge an additional rate per kWh.
Operations like a warehouse, retail store, or manufacturing unit that is located in a commercially zoned building will qualify for a business electricity plan. Commercial electricity rates in Texas depend on annual and daily energy usage, time of use, and other factors. One way to lower your energy bills is to compare cheap electricity plans and shop electric rates for businesses.
Fixed-rate electricity plans for businesses are great because there will be no surprises as you get a stable electricity rate. But on the flip side, they also cost you more money if you lock-in the rates for a long-term contract, and the electricity prices go down.
If you decide to break the contract, you may have to pay a hefty early termination fee. However, you can also choose a short-term contract for three to nine months. The best time to lock in the cheapest rates is between the peak winter demand and peak summer demand, i.e., early spring.
Based on the wholesale electricity prices, the cost of variable-rate electricity plans changes from month to month. You can choose a month to month contract and avoid a cancellation fee. But on the flip side, you will have no protection against electricity rate fluctuations.
Meaning, you must do more research on the websites of commercial electricity providers. These plans are great for businesses that are looking for stopgap measures or if fixed rates are expensive at that moment.
Indexed rate plans are similar to the variable-rate plans, but here the price fluctuations depend on market price changes for another underlying index. Most indexed rate plans are tied to the costs of natural gas. Each plan uses a formula or an index that defines your electricity rate each month, which will be mentioned in your contract.
With indexed commercial energy rates, you have the option to choose a fixed or variable rate plan. Since free nights and weekend plans are tied to the time when you get free electricity, some may consider them as indexed rate plans.
At Shop Texas Electricity, we carefully screen the top energy suppliers in your Zip code. We provide a list of the cheapest electricity rates and plans that are suitable for your usage.
We think about all the details that go into your electricity rate comparisons and display the low rate energy plans in an easy-to-understand format on our website. Our process allows you to browse all the available plans without having to perform complex research about different electricity companies.
We provide you the information you need to look into various energy rates and plans. Compare and shop electric rates that best fit your requirements.
We only list properly-vetted and top-notch electric companies with excellent service. Our partners have business stability, which is a massive plus as it protects you from new providers going out of business. We make sure that the pricing structure is transparent, with no hidden costs or gimmicks. If you are looking for clean energy providers, we have great plans from electricity suppliers with environmental awareness.
You have the power to choose Texas energy providers in a smooth and secure process. Compare electric rates and sign up for a cheap energy plan. Start saving money on your energy bills. All this, in a matter of minutes, from the convenience of your computer. Use our online calculator to find the best electricity rates by entering your Zip code.
Do you know that thousands of Texans are overpaying for electricity? Many of them are stuck with their electric provider for years and pay default rates. And if you are one of them, it is time to take control of your energy bills.
Use the Texas electricity rates chart to keep an eye on the changing energy rates, or look on our website for cheap rate plans in Texas currently.
