Deregulation of Texas electricity became effective on January 1, 2002. The purpose of deregulation was to stop one electric company from monopolizing the electricity service in the state of Texas. The change in legislation gave Retail Service Providers the opportunity to offer electricity to the consumers. Offering consumers more than one Retail Service Providers to pick from, gave the consumers the power to choose from several electric company providers. Legislators believed if electric companies were forced to compete with one another, they would keep their electric rates low in order for companies to stand in competition with their competitors.
One of the bonuses of deregulation it opened the doors for other Retail Service Providers to offer electricity service to the consumers and for electric companies to compete among one another for electricity rates. When more than one Retail Service Providers begin to offer service, it gave the consumers control over the power to pick which company they wanted to let provide electric service. To sum it up, what deregulation does, it put consumer in charge of who they would like to use as their Retail Electric Provider and the power to choose which electric company they want.
How Does Deregulation Work?
Although the actual delivery and maintenance of service still come from the main power lines of the local utility company nothing actually changes in terms of the delivery and the maintenance of electric to the consumers home or office. What does change is the kilowatt per hour each electric company charge for, the customer service and the electric company the consumer decides to choose to bill for their electric service.
How does Deregulation benefit the people who live in Texas?
Before deregulation the people who live in Texas was basically stuck with one electric provider. The consumers did not have a choice in the matter of who they wanted to use as a electric provider. However, after deregulation took effect, it begin to give consumers more options for Retail Electric Providers. Each Retail Electric Provider such as Reliant Energy charge a different rate for electric service, which oftentimes force companies to lower their electric rates to stay competitive. Therefore, it benefit consumers to shop around to see where they might be able to get a cheaper service provider. In addition,deregulation put a stop to one company monopolizing the entire source of power for the state of Texas. The change brought about more electric companies that offer electric to the residents of the state.
Therefore, deregulation put the power to choose into the consumers hand and opened the door for consumers to have more than one electric company to choose from.