Whether you're new to Texas or have lived here your entire life, the Texas electric supply is a common topic of discussion. In comparison to other states, Texas' electric supply system and grid are quite complicated. Unlike other states that have regulated electricity rates and standards, Texas is a free for all when it comes to electricity.
However, regardless of how complicated the Texas electric supply system is, it's important to understand. By understanding the grid and how it works, you can better choose the right electricity plan and company for your needs. Knowing more about the power grid will also help you understand where our electricity comes from and how it gets to your home.
- Why Are There So Many Texas Electric Supply Companies?
- How Does the Texas Electric Supply System Work?
- How is Texas Electric Supply Measured?
- What is the Main Source of Electricity in Texas?
- Who is the Right Texas Electric Supply Company for Me?
Why Are There So Many Texas Electric Supply Companies?
The first thing you’ll discover on your quest to find the perfect electricity company is that there are tons of options to choose from. All in all, there are more than 130 retail electric providers in Texas, but the total is increasing every year. The reason there are so many Texas electric supply REPs is because of deregulation, which took place in 2002.
Essentially, deregulation turned the power grid in Texas into a competitive market without any federal restrictions on electricity prices. Deregulation also means that retail electric providers aren’t government or state-controlled, and anyone with the means and desire can start their own company. While deregulation is great for business and capitalism, it makes it tough for residents to choose the right Texas electric supply company.
How Does the Texas Electric Supply System Work?
On top of the fact that there are hundreds of Texas electric supply companies, there are three different types of companies involved in the creation and distribution of electricity. One company creates electricity, another company sells it to you, while a third delivers it to your home or business.
The Different Types of Texas Electric Supply Companies
The three types of Texas electric supply companies are REPs, TDUs, and power-generating plants.
Power-Generating Plants
As their name indicates, power-generating plants are the companies that create electricity. They’re the first cog in the machine that is the Texas electric supply, and without them, you couldn’t have electricity. There are hundreds of power-generating plants in Texas, and they produce electricity from many different sources, which we’ll detail later.
Transmission and Distribution Utilities (TDUs)
TDUs are the utility companies that own and manage the electric lines, poles, cables, and meters that carry electricity. They’re responsible for ensuring that these components remain intact and deliver electricity to your home or business. TDUs are the ones responsible for restoring power after an outage and for managing the power grid. While power-generating plants and REPs are privately owned and operated, TDUs are owned by the state.
Retail Electric Providers (REPs)
REPs are the third and final type of Texas electric supply company. REPs are privately owned and operated and are the ones that sell electricity to you and to whom you pay your monthly utility bill. REPs buy electricity from power-generating plants, sell it to you, and work with your local TDU to ensure it gets to its destination.
Here’s a quick rundown of how electricity gets from its point of creation to your home or business.
- You contact us at GoodCharlie Energy and sign up for an affordable, fixed-rate electricity plan.
- We purchase electricity from a power-generating plant of our choice.
- We notify your local TDU and make sure they deliver electricity to your home.
- Your TDU will activate your electrical service and start a flow of electricity from the power-generating plant to your home.
- You pay your monthly electricity bill to us.
- We, in turn, compensate your TDU for their services.
How is Texas Electric Supply Measured?
Another key component to understanding how the Texas electric supply system operates is to know how electricity is measured. If you've ever looked at your electricity bill, you probably noticed the term “kWh" preceded by a number between 500 and 2,000. KWh stands for kilowatt-hour and is the standard unit of measurement for electricity.
On average, Texans use around 1,100 kWh of electricity per month, and the average electricity rate is 13 cents/kWh. It's important to understand your average monthly usage when choosing your electricity plan because it's how your monthly bill will get calculated. For example, if you use 1,356 kWh of electricity at a rate of 13.3 cents/kWh, your monthly bill will be $180.35.
What is the Main Source of Electricity in Texas?
The fourth and final aspect of understanding the Texas electric supply system is understanding where your electricity comes from. Electricity sources can get divided into three categories - fossil fuels, renewable resources, and nuclear energy.
- Fossil fuels
Fossil fuels account for nearly two-thirds of all the electricity in Texas. While it’s decreasing every year, coal accounts for roughly 20% of electricity, while natural gas accounts for 48%.
- Renewable resources
While renewable resources aren’t the main source of electricity in Texas, it’s the fastest-growing one. Texas produces more electricity from renewable resources than any other state, and its two main origins are the sun and wind. Solar energy accounts for just over 1% of renewable energy in Texas, while wind farms and turbines account for 20%.
- Nuclear energy
While we’re aggressively attempting to get rid of all nuclear energy production, it still plays a major role in the Texas electric supply system. Currently, around 11% of the electricity in Texas comes from the state's two nuclear power plants.
Who is the Right Texas Electric Supply Company for Me?
Now that you have a better understanding of how the Texas electric supply system works, you can choose the right Texas electric supply company. If you’re looking for a quality, fixed-rate plan with excellent benefits and an affordable rate, look no further than GoodCharlie Energy.
At GoodCharlie Energy, we’re trying to turn the Texas electric supply system upside down. While many companies try to make their money off of hidden rates and fees, we do just the opposite. We rely on our integrity, our ability to find affordable electricity, and our ethics to provide quality, affordable electricity to our customers. Contact us to get started or for a full list of rewards, benefits, and our ultimate mission as a retail electric provider.
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