How Texas electricity deregulation works
In most of Texas, electricity is split in two. A retail electric provider sells you the power and sends the bill. A regulated utility owns the poles and wires and fixes outages. You pick the retailer. The utility is set by your address. ERCOT runs the grid, and the PUCT regulates everything.
Power to Choose is the state's official, free plan-comparison site run by the PUCT. We don't get paid when you click.
The players
Your retail electric provider (REP) sells the plan and handles billing for the energy. Your transmission and distribution utility (TDU, also called a TDSP) owns the lines, reads the meter, and fixes outages. You choose the provider. The utility comes with the address.
ERCOT runs the grid for most of the state and handles the switching transactions between providers. The Public Utility Commission of Texas (PUCT) licenses providers and writes the customer-protection rules.
ERCOT's November 2025 retail market overview says about 85% of Texas electricity consumers can choose their retail provider: https://www.ercot.com/files/docs/2025/11/17/ERCOT-Grid-Insights-Retail-Market.pdf
The delivery charge on your bill
The TDU charge is a regulated delivery charge. The provider passes it through. It is not a fee the shopping site invented, and it does not go away when you switch providers. The PUCT rates page is the commission's hub for those tariffs.
Who can't choose
City-owned utilities and most electric co-ops can opt in, and most have not. Austin and San Antonio are the big examples. Lubbock's city utility did opt in. The guide on areas without choice walks through that.
How to start
Confirm your address is in a choice area, read a past bill for your kWh, and compare plans on Power to Choose. Read the Electricity Facts Label before you pick.
Related pages
Questions
What's the difference between a REP and a TDU?
The REP sells you the electricity plan and bills you for it. The TDU owns the poles and wires, reads the meter, and restores power. You can switch the REP. You cannot switch the TDU.
Who sets delivery charges?
Delivery charges are regulated and passed through on your bill. The PUCT oversees those tariffs: https://www.puc.texas.gov/industry/electric/rates/
What does ERCOT do?
ERCOT operates the grid for most of Texas and administers the retail switching transactions between providers. It does not sell you a plan and it does not send your home bill.
Can I keep my utility and change my provider?
Yes, in a choice area. The utility stays with the address. Only the retail provider changes, so the outage contact stays the same.
What happens if my provider goes out of business?
The poles and wires do not go with the provider. For what happens to your account, use the PUCT electricity consumer help page: https://www.puc.texas.gov/consumer-help/electricity/
Power to Choose is the state's official, free plan-comparison site run by the PUCT. We don't get paid when you click.
Sources
- ERCOT retail market overview, November 2025Checked October 12, 2026
- PUCT electricity consumer helpChecked October 12, 2026
- PUCT municipally owned utilities and co-ops FAQChecked October 12, 2026