What is deregulated energy? “Deregulated areas” of Texas refers to those cities in which residents enjoy the freedom of shopping around for their choice of power providers.
The ability to choose power providers means that instead of electricity being regulated by one company, in particular, residents can decide which company’s electric rates, services, and other options best suit their needs and budget—deregulation of energy.
Even though the electricity industry itself has been around since the 1800s, customer choice in regards to utility services is a much more recent addition.
Energy market deregulation creates competition between companies vying for customers. This competition results in very affordable rates and service options for consumers to consider as a match for their financial situation.
How did the deregulation of electricity in Texas begin? Let’s review a brief history of Texas energy deregulation.
Texas Energy Deregulation
- The passage of the Energy Policy Act of 1992 was a landmark in deregulated energy’s history. This legislation gave power to individual states to create competitive energy markets for their residents.
- Deregulation of energy in Texas went full-force in 1995, with the production of electricity produced by a number of power plants across the state became up for grabs.
- Energy market deregulation meant that one sole power provider in a certain area could no longer hold a monopoly over the industry—in other words, basically forcing residents living in deregulated areas to utilize the services of only one main provider was not allowed.
- Currently, over 400 Texan cities are designated as deregulated areas, giving their citizens more power to decide who provides their energy.
A popular option among residents living in deregulated areas of Texas is the ability to enroll in a prepaid electricity plan.
- Prepaid power plans differ from postpaid options in that they allow payment for utility upfront—or paying a set amount that agrees with your budget before the power gets used.
- Postpaid plans, on the other hand, are the more traditionally-known plans, in which consumers pay for their power usage after the consumption has occurred.
- Customers who find themselves unconcerned with the amount they are billed for each month’s power usage usually find satisfaction through postpaid plans and payment obligations.
- Prepaid electricity customers use the energy data recorded in their households by Smart Meters to track their energy habits in real-time, scaling back whenever and with whichever appliances necessary to stay in line with their selected payment amount.
- Funds can easily be added as needed to tide account balances over until the next billing cycle.
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