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Introduction to Electrical Service Companies in Texas

power line companies in texas

Power utility companies in Texas function in a deregulated environment. That is, the government does not restrict who can supply and deliver the energy consumers need for their activities. Such an environment is governed by the level of prevailing competition among power producers and distributors.   

This scenario works for the interest of consumers as they get to choose the best electric utility company in their area. They also have the option to switch to another retail electric provider if they’re not satisfied with the rates or services of their current utility company. That’s subject to specified terms and conditions, of course. 

What Are Utility Companies?

Basic facilities such as water, electricity, and gas, to name a few, make a house habitable. The companies that provide these facilities are called utility companies.  

These utility companies usually aim to establish a long-term relationship with the residents. That’s to ensure that their existing customers won’t switch to a different provider. As such, the consumers become a part of the company’s stable portfolio, which relates to the annual revenue that a utility company generates.  

As per current estimates, the utility industry has a capitalization of $1.5 trillion in the American market. The market includes different types of utility companies, and every company works with different rules to serve various customers.

Private Investors

This type of utility company is owned by private investors who get into such a capacity by purchasing the company’s stocks. These utility companies generate and distribute power over a defined service area. They operate in the retail market that remains open for a competitor to enter-exit at any time.

Municipally Owned

A municipally owned utility company is a non-profit company owned by the municipality or city it serves. It’s a non-profit government entity, meaning that service, and not profit, is its primary goal. Instead of striving to generate profit, this type of company aims to serve the residents of a particular region in the best possible way. 

Utility Cooperatives

Like a municipally-owned utility company, utility cooperatives do not seek to generate profit from their operations. Instead, they exist mainly to provide the service needed by the residents in the area. A utility co-op is wholly owned by the customers. The consumers benefit from the company’s profits, which are either given to members as dividends or reinvested in the organization. 

Utility Companies vs Electricity Providers

With various entities working together to provide electric service, it’s easy to get confused with the different terminologies used in describing those entities. For example, some might think that the terms electricity providers and utility companies mean the same thing. However, there’s an essential distinction between the two, especially in states with a deregulated energy market.  

The Utility Company

The transmission and distribution of electric power is the job of the utility company. They’re in charge of maintaining the infrastructure that brings electricity to your home. These include the poles, wires, lines, and transformers. They’re also responsible for checking the meters to determine how much power you consume, as well as restoring power after an outage.  

The Electricity Providers

Otherwise known as competitive suppliers, alternative suppliers, or Retail Electric Providers (REP), the electricity providers are companies that sell the electricity directly to you, the power consumption.  

The REPs buy the electricity from the power generators, and you then get that electricity from the provider of your choice. In a deregulated market, several electricity providers compete for your business. As such, they offer varying rates and services, giving you the option to choose those that benefit you the most. 

Your REP also handles the billing and payment processing.

Privately-Owned Utility Companies In Texas

Here are some of the utility companies in Texas that are owned privately.

  1. AEP Texas

AEP, short for American Electric Power, is one of the few companies to offer location-based plans to its customers. That means that the electricity plans available to you depend on your location. 

Currently serving over 1 million customers, AEP Texas’ primary market is in South Texas. However, it also has service areas running throughout the central parts of the Lone Star State. 

  1. Center Point

This utility company’s major service area is in the greater Houston region. With an estimated consumer base of more than 2.5 million customers, CenterPoint is considered as one of the big five Transmission & Distribution Utility companies operating in Texas on the deregulated ERCOT grid. 

The company works with over 70 different retail electric providers (REPs) to deliver electricity to Texans. 

  1. Xcel Energy

This company makes it easier for power consumers to adopt green energy technology by offering clean and economical energy in the market.  

Since Xcel Energy built its first wind turbine over three decades ago, the company has been focused on delivering a more environmentally-friendly mix of power sources. 

  1. Oncor

Oncor rides the horse of success with a customer base of 10 million. It is the largest energy provider in Texas, serving the Dallas and Fort Worth region and parts of West Texas.  

Oncor belongs to the list of the top 5 TDU companies operating on the deregulated ERCOT grid. 

  1. Sharyland

Sharyland, an electric transmission utility, is privately owned by the Hunt Family. It operates in the western, central, and southern regions of Texas. Due to significant acquisitions in recent years, Oncor Electric Delivery got ownership of Sharyland Utilities’ electric infrastructure.

  1. TNMP

TNMP is short for Texas-New Mexico Power. It is an electric utility company that provides electricity to over 260,000 homes and businesses all over Texas. However, its major market is in western Texas and southern Houston.

FAQs

How do I switch utilities?

You can switch utilities easily by scheduling the transition 14 days before the day your energy plan with the current provider expires. This lead time is ideal as it will give you ample opportunity to work out any glitches that may arise with the process. Remember, too, that companies take time to close and open accounts in their system.

Are Texas utilities for profit?

That depends on the type of electric utility we’re talking about. A privately-owned utility is for-profit, but a municipal utility and a utility cooperative are not. Instead, these latter two utility company types strive to provide the best service to the consumer.

Final Words

The energy market in Texas is entirely deregulated. This gives customers many options when it comes to accessing the electricity that powers their homes. From the electric utilities to the providers and the energy plans, a Texas consumer gets to pick the one that best suits their situation and budget.

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