Are you confused about the different kinds of electric companies? Unsure of the difference between your retail electric provider (REP) and your transmission and distribution utility (TDU) company? If so, you are not alone. It’s safe to say most electricity consumers do not understand the different kinds of electric companies. After all, there is only one energy company’s name listed on your monthly electric bill. But is that the name of your electricity provider? Or maybe it’s the name of the company that generated the electricity you are using?
“Electric company” has become the catch-all term for the company that sends you your monthly electric bill. In a perfect world, we could always use that term and there would be no confusion.
Unfortunately, the type of electric company that sends out the bills depends on where you live. In Albany, New York, the TDU sends out the monthly bills. But in Dallas, Texas, it is the REP that sends the bills.
Texas Retail Electric Providers
In Texas, your monthly electricity bill is sent out by your retail electric provider. On your bill, you will see the fees charged by the REP listed as the “Energy Charge.”
When you use our site to find a cheap electricity rate, you are comparing the offers of many different retail electricity providers. Once you decide on an REP, that will be the electric company that actually buys your electricity from the state’s electric grid.
Although you’ve never seen a TV commercial for a TDU, the retail electric providers are actively advertising their electricity plans. Commercials for TXU and Reliant Energy are on all the time, and now even Cirro and Direct Energy are starting to get in on the action.
The term “Retail Electric Provider” is interchangeable with “Energy Company,” “Power Company,” and even “Light Company.”
Texas Transmission and Distribution Utility Companies
Also known as Transmission and Distribution Utilities (TDUs) are the companies that deliver the electricity to your home or business. Your TDU owns and maintains your electric meter. It also owns and operates all of the local power lines and substations the electricity passes through on the way to your meter.
Although you can choose which electricity provider you use, you have no choice in the matter of which TDU delivers the electricity to your meter.
For the deregulated parts of the state, there are 4 main TDU companies.
- AEP Texas (Central and North)
- CenterPoint Energy
- Texas / New Mexico Power Company
If you are interested in knowing which electric company delivers the electricity to your home, simply take a look at your electric meter. You will see the name and logo of the TDU right on the face of the meter. Generally speaking, the TDUs tend to cover specific regions Texas. Oncor distributes the electricity to the North and Central Texas regions, including delivering the Dallas electricity, as well as the Waco electricity. CenterPoint delivers the Houston electricity. AEP (Central) handles the South Texas region, which includes the Brownsville electricity and Rio Grande Valley electricity.
Case Study #1: Houston Electric Companies
The Transmission and Distribution Utility company for all of Houston is CenterPoint Energy. They have a complete monopoly over the entire city because they own every meter and all of the power lines there. Thus, you do not have the power to choose which TDU delivers the electricity to you.
You do, however, have the power to choose your retail electric provider.
Say, for example, you found that Gexa Energy had the cheapest electricity plan that matched your situation. You can lock in that great rate for a year, so Gexa will be the company you pay every month for electricity.
Interesting Fact: Before Texas deregulated its electricity market, Reliant was the only REP in Houston.
Case Study #2: Dallas Electric Companies
In Dallas, the TDU for the city is Oncor Electric. Oncor owns all of the infrastructure in the city, so they have a lock on the distribution of electricity within the city.
Luckily, you can choose between dozens of electricity plans from many different REPs in Dallas. If you find a cheap electric plan from 4Change Energy Company and you like their philanthropic philosophy, you can choose to do business with them. Each month, you will pay them for your electricity. 4Change will then pay Oncor for the charges associated with your meter.
Interesting Fact: Before the electricity market became deregulated in Texas, TXU Energy was the sole REP in Dallas.
Who Do I Call If There Is an Electricity Outage?
If the electricity goes out at your home or business, it is up the TDU to resolve the issue. After all, they own and maintain the power lines and transformers. Luckily, every electricity meter in Texas is now a “smart” meter. These smart meters use cellular services to communicate in real-time with the TDUs. This means the TDUs are constantly monitoring every meter, and they can immediately take steps to resolve any outage situation.