Texas – A Model For Effective Energy Deregulation

During the past few years, several states have methodically deregulated energy, ending the regulated monopolies that citizens in these various states have known for decades past. In the past, a single company provided the generation, transmission, delivery, sales, billing and customer support to consumers. With energy deregulation, the people now have the power to select their energy retail providers.

The promulgation of energy regulation differs from state to state in details and components but one thing is common to all and that is providing consumers an option to choose providers, resulting in unlimited competition between different companies. The state of Texas has been at the forefront of energy deregulation, providing consumers the ability to decide which Texas electric company can provide their utilities. The promulgation was aimed at creating a competitive environment among utility providers, thus providing better services or even cheap electricity and renewable energy options to the public.

A Little Bit of History

Senate Bill 7 was signed by then Governor George W. Bush on June 1999, which paved the way for the implementation of energy deregulation for the state of Texas during the subsequent years. The result was that consumers in the State had the option for selecting the Texas electricity provider of their choice among the various Retail Electric Providers or REPs that took form when Reliant Energy deregulation was officially implemented.

Even curing its first, the energy deregulation initiative in Texas was very successful and resulted in more than 680,000 customers benefitting from the more than 1.5 billion dollars in cost savings. Regulation was not limited to household consumers alone that switched to various electric companies. The initiative was also implemented by more 90% of large industrial corporations and entities, most of which have switched to various Regional Electricity Providers (REPs) providing utility services.

Paving the Way

According to the study performed by CAEM or the Center for the Advancement of Energy Markets, the restructuring of the electric market in the State of Texas, was the best in the United States based on the Retail Energy Deregulation (RED) Index. The RED Index acts an industry report card and rates states based on 22 identified attributes or criteria, with Texas ranking the highest among the state rankings.

Leave a Reply

Your email address will not be published. Required fields are marked *