If you're not familiar with the electricity market in Texas, it can be extremely confusing. There are many different terms and names used for various companies, but many of them are interchangeable. When people talk about power or electricity companies, for example, they could be referring to your REP, a company that creates electricity, or your local utility company.
If you're one of the thousands of Texans that use electricity on a daily basis but have no idea how the system works, GoodCharlie Energy is here to help. We will explain what a utility company is and does, as well as the difference between utility companies and other electrical companies in Texas. Let's get started!
- What is a Utility Company, and What is Their Role?
- What is the Difference Between a Utility Company and an Electricity Company?
- How Many Utility Companies are There in Texas?
- Do I Get to Choose My Utility Company?
- Does It Matter Who My Utility Company is?
- The Key to Getting a Good Utility Company
What is a Utility Company, and What is Their Role?
A utility company is the entity that's responsible for making sure that electricity makes it to your home or business undisturbed. Utility companies work with retail electric providers to supply electricity to your home. They are responsible for managing the following entities.
- Electric meters
- Power lines
- Electric poles
- Underground cables
- Power outages
- Transformers
Essentially, anything that helps get electricity from the power plant to your home or business falls under the jurisdiction of utility companies. They own and manage these various components, and they're also the company responsible for restoring power after an outage.
While having electricity wouldn't be possible without utility companies, you don't pay them directly. Instead, the retail electric provider you're signed up with pays the utility company part of your monthly utility bill. Here's how it works.
- You enroll in an electricity plan with your chosen retail electric provider.
- Your retail electric provider purchases electricity from a power-generating plant and sells it to you for a profit.
- Your REP works with your local utility company to ensure electricity gets to your home.
- Each month, you pay money for your utility bill to your retail electric provider.
- Part of your bill, usually around one-third, goes to the utility company that delivers electricity to your home.
- This fee, known as a delivery fee, is factored into your monthly electricity bill and is part of the reason that electricity is so expensive.
For example, if you pay 15 cents/kWh for your electricity, around 5 cents/kWh likely goes to your utility company.
What is the Difference Between a Utility Company and an Electricity Company?
While people sometimes use the terms utility company and electricity company interchangeably, they're far from the same thing. As we discussed, utility companies are responsible for delivering electricity to your home. They're the ones you see on the side of the highway repairing power lines and digging underground cables.
On the other hand, electricity companies refer to your retail electric provider. Retail electric providers are companies that buy and sell electricity but have nothing to do with actually delivering it to your home. Instead, they pay utility companies to do that work for them because only utility companies are allowed to work directly with electricity.
How Many Utility Companies are There in Texas?
There are hundreds of retail electric providers in the deregulated part of Texas, but only five TDUs, and here they are.
Texas-New Mexico Power
Texas-New Mexico Power is one of the oldest utility companies in Texas and serves roughly a quarter of a million people. They operate mostly in rural parts of the state, including northeast, northwest, and southwest of the Dallas-Fort Worth metroplex, Lewisville, Gatesville, Bryson, and Farmersville, as well as Gulf Coast areas southeast and southwest of Houston.
Oncor Electricity
Oncor is the biggest utility company in Texas and operates in nearly every part of the state. They provide electricity to both homes and businesses and serve several million customers.
CenterPoint Energy
CenterPoint Energy was founded in the 1800s, making it the oldest utility company on our list. They also serve most parts of Texas and deliver electricity to more than 3 million Texans.
AEP North
AEP North is the northern version of AEP, and they provide power to most of northern Texas. Some of the larger cities they serve include San Angelo, Alpine, and Abilene.
AEP Central
AEP Central is also associated with AEP Energy, but they serve only the central and southern parts of Texas. A few of these areas include Corpus Christi, Victoria, and Laredo.
Do I Get to Choose My Utility Company?
While you have the power to choose your retail electric provider, you don't get to choose your utility company. Instead, your REP works with whatever utility company operates in your area. You can rest assured that when you contact us at GoodCharlie Energy and sign up with us, you'll be working with the best utility company possible.
Does It Matter Who My Utility Company is?
In most cases, it doesn't matter who your utility company is. They won't affect your overall price or electricity rate, and they won't affect the quality of your electricity. The only thing that your utility company will play a role in is if you lose power and they have to restore it.
The Key to Getting a Good Utility Company
Because you can't control who your utility company is, there's no point in stressing out about it. Instead, you should focus on the things you can control, such as your retail electric provider. Choosing the right REP is the key to getting set up with a good utility company.
Your REP will also play a role in keeping your utility company on its toes and ensuring you have a constant flow of electricity. After all, REPs are responsible for contacting your utility company when there's a power outage and making sure they restore power in a timely manner.
When you contact us at GoodCharlie and enroll in an electricity plan, you don't have to worry about who your utility company is. We will stay on top of them and make sure they restore power as quickly as possible after an outage. We'll also make sure they're paid every month so that there isn't a disturbance in your coverage.
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