If you live in one of the deregulated cities in Texas, you get to pick the company that sells you electricity, the same way you pick a phone carrier. About 85% of Texans have that choice. The rest live in areas served by city-owned utilities or rural cooperatives, where the provider is set for them.
Short answer: Most of Texas is deregulated. If your power is delivered by Oncor, CenterPoint, AEP Texas, Texas-New Mexico Power (TNMP), or Lubbock Power & Light, you can choose your retail provider. If you are served by Austin Energy, CPS Energy in San Antonio, El Paso Electric, or a rural co-op, you cannot. The dividing line is your delivery utility, not your city's name.
This guide breaks down which Texas cities are deregulated by utility territory, which areas are not, and how to confirm where your own address falls.
What "deregulated" actually means in Texas
Texas restructured its electricity market in 2002. Since then the system has run on three separate layers, and keeping them straight is the key to understanding the whole thing.
The first layer is generation: the power plants that produce electricity. The second is delivery, handled by your transmission and distribution utility, or TDU. The TDU owns the poles, wires, and meter at your home, and it is still a regulated monopoly. You do not choose it, and it is the same company whether you shop or not. The third layer is retail. Your retail electric provider (REP) buys generation, bundles it with the TDU's delivery charge, and sends you one bill.
Deregulation only touches that third layer. When people say a city has electricity choice, they mean residents can pick their REP. The wires do not change, the meter does not change, and the reliability of delivery does not change. Only the company on the bill does. We cover this split in more detail on the Texas electricity hub.
One thing makes Texas different from Pennsylvania or Ohio: there is no utility default rate to fall back on. In a competitive Texas area, you have to choose a provider to get service. That is why knowing whether you are in a deregulated market matters before you move or set up power.
Which Texas cities are deregulated
Deregulated Texas is easiest to read by TDU territory, because your delivery utility is what determines your eligibility. Five TDUs cover the competitive market.
Oncor is the largest, covering Dallas-Fort Worth and much of North and Central Texas. If you live in Dallas, Fort Worth, Arlington, Plano, Frisco, Round Rock, or Waco, you are in Oncor territory and can shop. The Oncor utility hub has the full territory.
CenterPoint Energy delivers power across the Houston area and the upper Gulf Coast. Houston, Sugar Land, Pearland, Katy, and Galveston all sit inside CenterPoint's footprint. The details are on the CenterPoint hub.
AEP Texas Central runs along the Coastal Bend and the Rio Grande Valley, including Corpus Christi, Laredo, McAllen, and Harlingen. AEP Texas North covers the Abilene region of West Texas, including Abilene and San Angelo. Both are competitive. See the AEP Texas Central and AEP Texas North hubs.
Texas-New Mexico Power (TNMP) serves a patchwork of areas, including several Gulf Coast communities such as Texas City, Alvin, and Dickinson. Because TNMP's territory often sits right next to CenterPoint's, the serving utility can vary street by street, so confirming your meter matters here. The TNMP hub covers it.
Lubbock Power & Light is the newest addition and the edge case. For most of its history, Lubbock was a city-owned utility with no retail choice. That changed recently, when Lubbock Power & Light moved most of its customers onto the ERCOT grid and opened them to competition. If you live in Lubbock, you most likely can shop now, but it is worth confirming your specific service, since the transition is recent. The Lubbock Power & Light hub has more.
Which areas are not deregulated in Texas
This is the part many electricity sites gloss over, and getting it wrong wastes people's time. Not every Texan can switch.
The largest exceptions are city-owned municipal utilities. Austin is served by Austin Energy, San Antonio by CPS Energy, and El Paso by El Paso Electric. Residents in these cities cannot choose a competing retail provider. Their rates are set by the municipal utility or a local board, not by a competitive market. If you live in Austin or San Antonio, the comparison shopping in this guide does not apply to you, and any site that tells you otherwise is wrong.
The other exception is rural electric cooperatives. Co-ops are member-owned utilities that serve much of rural Texas, and most have not opted into retail competition. A few have, but the default for a co-op member is no REP choice.
There is a straightforward reason these areas sit outside deregulation. When Texas opened its market, state law let municipal utilities and cooperatives decide for themselves whether to join, and many chose to stay regulated. That is a legitimate choice, not a loophole. It just means roughly 15% of Texans do not get to shop, even though the state is broadly described as deregulated.
How to tell if your address is deregulated
The reliable test is your delivery utility, not your city's name. Two homes a mile apart can fall on different sides of the line if one sits in a cooperative or municipal territory.
Start by finding who delivers your power. A recent bill names your TDU, or you can look up your ESID, the Electric Service Identifier tied to your meter. If your delivery utility is Oncor, CenterPoint, AEP Texas, TNMP, or Lubbock Power & Light, you are in the competitive market and can choose a provider. If it is Austin Energy, CPS Energy, El Paso Electric, or a named cooperative, you cannot.
The quickest confirmation is to enter your ZIP on the Texas electricity hub and see whether competitive plans appear for your address. Either way, the core fact from earlier still holds: your wires and your delivery reliability stay exactly the same. Choosing a provider only changes the generation supply and the company that bills you.
What to do if you're in a deregulated city
If you can shop, the goal is to do it without falling for the gimmicks the Texas market is known for. The state's official site, Power to Choose, lists every certified provider but sorts by an advertised price that often hides bill-credit traps. We walk through how to use it without overpaying in our Power to Choose guide.
A few honest pointers. Read the Electricity Facts Label on any plan, and check the price at the usage level closest to your real bill, not just the headline 1,000 kWh number. Watch for bill credits that only trigger inside a narrow usage band. If you are setting up service after a move and need power fast, our same-day electricity guide explains how connection timing actually works. If you have no credit history or want to skip a deposit, the no-deposit and prepaid options page lays out the honest tradeoffs.
When you are ready to compare ranked picks rather than a raw list, our best electricity plans in Texas page ranks plans on the rate you would actually pay, with the gimmicks filtered out.
FAQ
Is my city deregulated in Texas?
It depends on your delivery utility, not just the city. If your power is delivered by Oncor, CenterPoint, AEP Texas, Texas-New Mexico Power, or Lubbock Power & Light, your address is in the competitive market and you can choose a retail provider. If you are served by a municipal utility like Austin Energy or CPS Energy, or by a rural cooperative, you cannot. Checking your TDU on a recent bill is the fastest way to know for sure.
Why isn't Austin deregulated?
Austin is served by Austin Energy, a utility owned by the City of Austin. When Texas opened its market, state law allowed municipally owned utilities to decide for themselves whether to join retail competition, and Austin chose to stay regulated. Austin Energy sets the rates and serves as the only provider in its territory. San Antonio's CPS Energy and El Paso Electric work the same way.
Can everyone in Texas choose their electricity provider?
No. About 85% of Texans live in deregulated areas and can choose, but the rest cannot. Residents served by municipal utilities such as Austin Energy, CPS Energy, and El Paso Electric, along with most rural electric cooperatives, do not have retail choice. The state is broadly deregulated, but that broad description leaves out a meaningful share of the population.
How do I know which utility serves me?
Look at a recent electricity bill, which names your transmission and distribution utility, or find your ESID, the identifier tied to your meter. You can also enter your ZIP code on our Texas electricity hub to see whether competitive plans are available at your address. Your delivery utility is fixed by where you live, so it is the single fact that decides whether you can shop.