In 1999, Republicans and Democrats worked together to give Texans something they had never had before: a choice of electricity providers. More than two decades on, have we stayed true to that promise?
How Texas electricity worked before deregulation
Before deregulation, TXU was the dominant electric utility across much of North Texas. It generated electricity, delivered it through power lines, and sold it to households. You generally couldn't shop around. Your address determined who supplied your electricity.
Senate Bill 7: what the 1999 law did
That changed with Senate Bill 7. Republican state Sen. David Sibley authored the bill, and Democratic state Rep. Steven Wolens was its House sponsor. Governor George W. Bush signed it into law on June 18, 1999.
The law required utilities to separate their businesses. Power lines stayed regulated, but generating electricity and selling it to customers were opened to competition. Households in participating areas could then choose between retail electric companies.
Municipal utilities and electric cooperatives were exempt unless they chose to open up. That is why customers of city-owned utilities in places like San Antonio and Austin still cannot pick a provider.
Key dates
- March 17, 1999: the Texas Senate passes Senate Bill 7.
- May 1999: the House passes it with amendments, and the Senate concurs.
- June 18, 1999: Governor Bush signs the bill. It takes effect September 1.
- January 1, 2002: retail competition begins. TXU splits its generation and retail operations from its regulated delivery business, which becomes Oncor.
What lawmakers wanted
The idea was straightforward: make electricity companies compete for customers instead of protecting a single seller in each area. Supporters expected better prices, service and options. The law also called for customer-protection rules, froze existing retail base rates, and provided for a 6% rate reduction beginning in 2002.
The goal wasn't simply more electricity companies. It was a better deal for Texans.
Has Texas electricity choice kept its promise?
Today, Texans in competitive areas can shop for electricity. That's a meaningful change. But shopping can be harder than it looks.
Some plans advertise attractive rates that apply only when a household uses a certain amount of electricity. Bill credits, extra fees and contract terms can make the final bill surprisingly different from the headline price. Our look at Lubbock's plans shows how a plan that looks cheapest at one level of use can be priciest at another.
Retailers and comparison platforms also compete for enrollments, and some brokers earn commissions. That doesn't make their recommendations automatically bad. It does make transparency important: shoppers should know what they'll pay and how plans are being presented.
The question is whether all this competition still makes it easier for Texans to find a good deal, or simply gives them more fine print to read.
The next chapter
Texas doesn't need to return to monopoly service to revisit the principles behind deregulation. Clear pricing, understandable contracts, fair comparisons and reliable power are goals that cross political lines.
Leaders from both parties once agreed that Texans deserved a choice. Making that choice work for Texans is the unfinished job. If you shop for a plan, see how Power to Choose works, when switching makes sense, or compare plans for your address.
About this article
The history above comes from the Texas Legislature's records, TXU's own 2002 filing and public radio reporting on the bill's sponsors. The closing questions about whether choice is working today are Power Hopper's opinion.
Sources
- Texas Legislature: Senate Bill 7 (76th Legislature) enrolled bill summary
- Texas Legislature: Senate Bill 7 bill history, including the governor's signature on 06/18/1999
- Texas Legislature: Senate Bill 7 Senate Research Center bill analysis
- SEC: TXU US Holdings (for Oncor Electric Delivery) 2002 filing on the restructuring
- Texas Public Radio: how Texas lawmakers shaped the state's electricity market (Sibley, R-Waco, and Wolens, D-Dallas)
Power Hopper is not affiliated with or endorsed by the companies or agencies named above. This brief was prepared with AI assistance. Reviewed by Brent Ward on November 9, 2026. Power Hopper is a PUCT-registered Texas electricity broker and earns a commission when a customer enrolls through us. That never decides what we cover or how.
BJW Ventures LLC d/b/a Power Hopper, PUCT Registered Electricity Broker BR260201