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Texas Electricity Basics

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The key market participants in Texas Electricity Deregulation are the Generators, Transmission Distribution and Service Providers (TDSP), Retail Electric Providers (REP), ERCOT and the Public Utility Commission (PUC).

  • TDSP - Electricity is then carried to a transformer via cables where it is converted from low voltage to high voltage for more efficient transmission over long distances. High voltage transmission lines carry the electricity over long distances to substations at or near the point of use. Substations convert the electricity from high voltage to lower voltage electricity which is then moved through distribution lines to consumers by the Transmission and Distribution Providers (TDSP).

  • REP - Retail Electric Providers then sell this power to consumers on a per kWh basis.

  • ERCOT - Oversees the reliability and security of the state's power grid. They make sure you get electricity into your home or business and enforce reliability standards for the electricity grid and utility operations. www.ercot.com

  • PUC - The Public Utility Commission regulates the delivery of electricity to ensure the safety and reliability of your service. The mission of the Public Utility Commission of Texas is to protect customers, foster competition, and promote high quality infrastructure. www.puc.state.tx.us

The diagram below shows the basic flow of electricity to your home or business in the deregulated marketplace.

Electricity Glossary

Electricity in Texas is generated from natural gas, nuclear, coal, wind, water, and solar energy. Since 1995, Texas has built or has under construction, some 27,000 MW of generation capacity and is projected to have reserve margins in excess of 25% through 2006. About 20% of the residential customers in TXU and Reliant service territories have switched providers and nearly 100% of large commercial customers have switched.


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