How Do These Texas Energy Companies Sell Electricity Under Deregulation?

I have not lived in Texas since I was a kid. I moved back here with my wife a few months ago. There was not a whole lot that was familiar to me. So much has changed, but that is how it goes when you try to go home again. Isn’t that what they say? You know, how you can never truly go home again. My brother had to update me on everything including the things that were different here than where we lived back east. For one thing, he told me, Texas energy companies are now by consumer choice here where we got a house.

We had no choice in our electric company where we came from. I did not even understand how it worked. I mean I’m thinking of how could they run new wires to your house when there are only so many power lines that run through town. I felt kind of dumb after it was explained to me. My brother told me that it was all in the production and the billing. The same wires and meters carry the same electricity. It is just who you buy it from.

Say there are 10 electric producers. Then say a few more companies might be marketing the electricity produced by those power plants. If power plant number 1 has so many customers signed up, then they get paid for how much electricity their meters say they use in a formula that includes how much electricity the plant produces. This is how the profits are earned by all the power plants that are involved and the companies marketing the electricity.

There is no need to run new wires or change infrastructure. All of the power production facilities feed power into the grid. Then they get paid by how much their customers use. I imagine they need to produce at least as much as is being used, otherwise they would have to buy some from another producer. Sounds kind of complicated, but it really isn’t. What it result in is competition that saves me money on my electricity usage.

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