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Electricity Market Competition in Texas

Consumers in Texas should shop for electricity the way they shop for cars or clothes: the price matters, but so does the quality and the source of power. The Power Scorecard is designed to help consumers understand the environmental quality differences among the electricity service choices offered in the new retail competitive market. With competition, you the consumer have the opportunity to choose cleaner, greener electricity from among the new choices competition offers.

The following explains how competition works. Other parts of the Power Scorecard provide information on the environmental quality differences in electricity choices offered in Texas (See "ratings.")

In the past, one company, a local utility, provided all the parts of your electric service (generation, transmission, distribution, and retail sales). This means that the local utility supplied the power, read your electric meter, fixed any electric line problems, and determined what the sources of electric generation would be.

Because electricity consumers had no option to switch companies, utilities were able to install any facilities they felt necessary with little input from residents and consumers.

Before deregulation electric utilities were in charge of the generation, transmission and distribution of electricity. They operated as a regulated monopoly, and had the sole rights to sell electricity in a particular region.

On January 1, 2002, Texas opened its electric system to retail competition. With competition, these parts are separated.

Illustration used with permission of Nexus Energy Software.
Copyright ©2002 ENERGYguide.com. All Rights Reserved.

The actual delivery of electricity across poles and wires to your home or business is called transmission and distribution. These services are provided to you by the local wires company, which is responsible for maintaining the poles and wires, and responding to emergencies and power outages as always. The PUC continues to regulate the delivery of electricity to ensure the safety and reliability of your electric service.

With electric competition, retail electric providers ("REPs") sell electricity to you and provide functions such as customer service and billing. Retail electric providers compete for your business by offering lower prices, renewable energy options, added customer service benefits or other incentives.

Generally there are two types of REPS: affiliate retail electric providers and competitive retail electric providers.

The affiliate retail electric provider was part of the original electric company that generated and sold electricity in your area. Now, the affiliate REP only sells electricity and provides customer service.

The competitive retail electric providers are new, competing with other REPs for your business. You can choose a competitive REP at any time. However, if you are not ready to choose a competitive REP, your electric service will continue to be provided by the affiliate REP. This company offers a standard rate for electric service called the "Price to Beat," which is set by the PUC. Competitive retail electric providers may offer prices even lower than the Price to Beat, and you may switch providers at any time.

You may obtain information on the Price to Beat by contacting your affiliate REP and asking for a copy of its Electricity Facts Label, or you may visit the Texas Public Utility Commission's Electric Choice website at www.powertochoose.org and enter your ZIP code in the "Compare Offers" section. The Electricity Facts Label provides standardized information on electric service, including details on prices, contract terms, sources of generation and emissions.

The Power Scorecard has been designed to help you evaluate the environmental quality differences among the competing REPs by providing environmental ratings of the electricity supply sources each REP uses to serve its customers. The Power Scorecard also provides limited information on the price of the choices available in each retail service area. Detailed information on price and other terms of service should be obtained from the REP.

The Power Scorecard provides

  • information on how to contact each REP for such information
  • links to www.powertochoose.com -- Texas Public Utility Commission's web site - a place where consumers may obtain extensive information on how retail choice works in Texas. Information is also available by calling the Texas Electric Choice Answer Center toll-free: 1-866-PWR-4-TEX (1-866-797-4-839; TTY users dial 7-1-1 in Texas)

For more information on Texas Choice see also:

Unplugging Texas' Most Powerful Polluters, A Report on How to Choose Electricity and Why it Matters. A Study for Public Citizen's Texas Office and The SEED Coalition. July 2002 (available at http://www.citizen.org/documents/September%20Our%20Unplugged%20Final.pdf)

Renewable Resources: The New Texas Energy Powerhouse. A report on the economic benefits of renewable energy in Texas and how to keep them growing. A report by the SEED Coalition and Public Citizen's Texas office. September 2002 (available at:www.citizen.org/documents/Tx%20Energy%20Powerhouse.pdf)

Report to the 78th Texas Legislature. Scope of Competition in Electric Markets in Texas. Public Utility Commission of Texas. January 2003 (available at: www.puc.state.tx.us/electric/reports/scope/index.cfm)

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