Something that’s usually at the top of everyone’s to-do list is making sure they have electricity. In today’s world that never seems to stop, electricity and energy largely keep the world spinning. Texas has a unique electricity setup that’s different from many other states. As a result, homeowners, renters, and business owners have the opportunity to choose their own power company and electricity plan. While the power to choose your own power company can save you tons of money, it can also cost you if you make the wrong choice.

Power companies are the entities that are responsible for creating, selling, and delivering electricity to your home. While most states have only one or two different companies that fulfill these duties, Texas has separate companies for all three jobs. Let’s break it down so that it makes more sense.

Power generating companies are the entities that create electricity from natural or renewable resources. Coal and natural gas are two of the most significant sources of electricity for fossil fuels. While this is where a majority of Texas’ electricity comes from, Texas is also one of the national leaders in electricity created from renewable resources. Wind power and solar power are kings among them.

Retail electric providers or REPs are the power companies you purchase electricity from. They are who you send your monthly power bill to and who manages your electricity plan and rate. Because of how electricity works in Texas, you have the power to choose your own REP. Contact us at EnerGenie if you’re in the market for a new REP, and we’ll find the best one that fits your specific needs.

TDUs work with retail electric providers to ensure that electricity makes it from them to your home or business. TDUs are state or government-owned companies that own and manage the power lines, electric poles, and electric meters throughout Texas. While you don’t get to choose your TDU, each of the TDUs in Texas is a top-notch company and works closely with your REP.

In 2002, Texas made the decision to deregulate its electricity. Essentially, deregulation turned the energy market in Texas into a competitive one where privately-owned companies are vying for your business. Electricity in Texas works similarly to how Internet, TV, and phone plans work in other states. Different companies try to offer the best prices, deals, and benefits to you, all while trying to make as much money as possible.

The privately-owned companies that purchase and sell electricity in Texas are known as retail electric providers, which we briefly discussed above. REPs purchase electricity from power generating companies and sell it to you on a monthly basis. They work closely with pre-determined TDUs who make sure that electricity makes it to your home. TDUs are also responsible for repairing power outages as well as maintaining the poles, wires, and meters that bring electricity to your home or business.

The power companies that you need to work with and choose between are retail electric providers. Their goal is to provide electricity to you but to make as much money as possible in the process. As a result, power companies often devise tricky plans, gimmicks, and tricks to get as much money out of you as possible.

• Hidden Fees

One of the biggest things to watch out for with power companies are hidden fees located in the fine print. Early termination fees, minimum usage fees, and TDU fees are very commonplace but seldom discussed by power companies.

• Tiered Rates

Tiered rates are another tricky ploy used by power companies. For example, the rate that you sign up for might be 8 cents per kWh, but that’s only for the first 1,000 kilowatt-hours of electricity. However, if you use over 1,000 hours, the rate jumps to 12 cents.

• Startup Costs

Many power companies also require a deposit or startup fee when you initially sign-up with them.