What is a retail energy provider (REP)?

A retail energy provider, or light company, is the company that sells you power in Texas. They set your rate, send your bill, and handle your account. They buy power on the wholesale market and sell it to you at a retail rate.

What is the difference between a REP and a utility?

Your light company (REP) sells you the power and sets your rate. Your utility (like Oncor or CenterPoint) owns the poles and wires and physically delivers the power. You choose your light company. You cannot choose your utility.

How many retail energy providers are there in Texas?

There are over 100 licensed light companies in Texas. The number of options available at your specific address depends on which utility territory you're in. Most ZIP codes have 20-50+ plan options from various companies.

Can I switch my retail energy provider?

Yes. In deregulated Texas, you can switch light companies at any time. The switch typically takes 1-3 business days. Watch out for early termination fees if you're on a fixed-rate contract.

What Is a Retail Energy Provider in Texas?

If you’re trying to get lights on in Texas, you’re going to run into the term “retail energy provider” or “REP.” The industry loves its jargon. But all it really means is your light company: the company you choose to buy your power from.

In most states, you get one power company and that’s it. Texas is different. You pick who sells you power. That’s the whole point of deregulation. Here’s how it works, and what it means for getting your lights on, especially if credit is a factor.

What a Light Company Actually Does

A retail energy provider, which we’ll call a light company from here on because that’s what normal people say, does three things:

Buys power on the wholesale market. Texas has a wholesale electricity market run by ERCOT (the Electric Reliability Council of Texas). Light companies buy power in bulk.
Sells that power to you at a retail rate. They set the price on your plan. Fixed rate, variable rate, whatever the plan structure is. That’s their rate.
Bills you and manages your account. They send the bill, handle payments, deal with customer service, and manage your enrollment.

That’s it. Your light company does not own any power lines. They don’t come to your house to fix outages. They don’t own the meter. All of that physical infrastructure belongs to a completely different company: your utility.

Light Company vs Utility: Two Companies, One Bill

This trips up almost everyone. There are two separate companies involved in getting power to your home in Texas:

Your light company (the one you choose):

Sets your rate
Sends your bill
Handles your account and customer service
Examples: TXU Energy, Reliant, Payless Power, Pulse Power, 4Change Energy

Your utility (the one assigned to you):

Owns the poles, wires, and meter
Physically delivers the power to your home
Handles outages, meter readings, new connections
Examples: Oncor, CenterPoint, AEP Texas, TNMP

You never interact with the utility directly (unless there’s an outage or a meter issue). Your light company handles everything on the billing side. But the utility’s delivery charges show up on your bill too. They’re just baked in.

For a detailed comparison of how the major Texas utilities differ, check our Oncor vs CenterPoint guide.

How Deregulation Created the Texas Light Company Market

In 2002, Texas deregulated its electricity market. Before that, you had one power company for your area, period. After deregulation, the market split into:

Utilities that own and maintain the grid (regulated, no choice)
Light companies that compete to sell you power (deregulated, your choice)

The idea was simple: competition drives down prices and gives people options. In practice, it’s more complicated than that (more than 100 licensed light companies creates its own kind of confusion), but the core benefit is real. You can shop for the best rate at your address.

Where deregulation applies: Most of the big Texas metros are deregulated. Houston, Dallas, Fort Worth, Arlington, Corpus Christi, and many smaller cities. If you’re in Oncor, CenterPoint, AEP Texas, or TNMP utility territory, you’re deregulated and can choose your light company.

Where it doesn’t apply: San Antonio (CPS Energy) and Austin (Austin Energy) are the biggest exceptions. These cities run their own municipal utilities. No choice, one company. Some rural areas served by electric cooperatives also aren’t deregulated.

For the full picture of how Texas lights work, see our understanding Texas electricity guide.

How to Pick the Right Light Company

There are over 100 licensed light companies in Texas. Most ZIP codes have dozens of plan options. Here’s how to cut through the noise:

1. Start With Your Address

Your ZIP code determines which utility territory you’re in, which determines which light companies serve you. Not every company operates everywhere. Always start by checking what’s available at your specific address.

Check plans at your address

2. Decide: Traditional or Pay-as-you-go

This is the biggest decision, and it usually comes down to credit.

Traditional plans (post-paid):

Lower monthly cost (typically $90-$130/month for a 1,000-unit household)
Monthly billing after you use the power
Contract terms (usually 6-24 months)
Credit check required. Some companies require a deposit if your credit doesn’t clear.

Pay-as-you-go plans (prepaid):

Higher monthly cost (typically $145-$180/month for the same usage)
You pay before you use the power
No contract, leave any time
No credit check. No deposit. Ever.

If credit isn’t a concern, traditional plans save you money. If credit is a factor, pay-as-you-go gets your lights on today without anyone checking your history.

3. Compare the Total Cost, Not Just the Rate

Light companies advertise their rate, but your actual bill includes delivery charges from your utility. Those charges are the same no matter which company you pick, but they add 30-40% to your total bill.

Always compare plans using the all-in monthly cost. That’s what you’ll actually pay. Plans on our site show you the total cost so nothing sneaks up on you.

4. Read the Contract Length and Cancellation Terms

Fixed-rate plans lock in your rate for a set period (6, 12, 24 months). Good for predictability, especially through summer when rates spike. But if you need to leave early, there’s usually an early termination fee of $75-$200.

If your living situation is stable, lock in a rate. If things are uncertain, either pick a short-term plan, go month-to-month variable, or use pay-as-you-go (no contract, no fee to leave).

5. Check the Company’s Track Record

Licensing is mandatory in Texas. Every light company needs a PUCT (Public Utility Commission of Texas) license to operate. That’s your baseline protection.

Beyond licensing, check for:

Customer review volume and ratings
How long they’ve been operating in Texas
Complaint history with the PUCT

Bigger isn’t always better. Some smaller companies have great rates and solid service. But a company with thousands of reviews and years in the market gives you more confidence than one with a handful of reviews.

What Happens When Things Go Wrong

Credit Check Problems

Most traditional light companies run a credit check. If your credit is rough, they might require a deposit of $100-$400 before turning on your lights.

Here’s what most people don’t know: every light company sets its own credit threshold. Company A might want $300 from you while Company B says $0 deposit for the exact same credit score. The thresholds are different, and they change based on each company’s business needs.

That’s why we check multiple companies at once. Instead of you calling around for hours, we run your info against several companies simultaneously to find which ones will take you without a deposit. It works more often than people expect.

If none of them clear you, pay-as-you-go is always available. No credit check means no rejection.

Switch Holds

If you owe money to a previous light company, they might place a “switch hold” on your meter. This blocks you from signing up with any new company until the debt is addressed.

Switch holds are one of the most frustrating things in the Texas market. Learn how they work and what your options are in our switch hold guide.

Light Company Goes Out of Business

It happens. Small light companies occasionally go under. If yours does, ERCOT assigns you to a “Provider of Last Resort” so your lights don’t go off. You’ll want to shop for a new plan quickly since the default rate is usually expensive, but you won’t lose power.

The Full List: How to See Every Light Company at Your Address

Don’t browse company websites one by one. Enter your ZIP code and see every option at your address in one place. We show you:

All available light companies in your territory
Total monthly cost (not just the advertised rate)
Which plans require a credit check
Which plans offer same-day service
No-deposit options when available

For a full list of light companies we work with, visit our providers page.

Bottom Line

A retail energy provider is just your light company. The company that sells you power and sends the bill. In Texas, you get to choose that company, and the choice matters. Different companies, different rates, different deposit requirements.

If you’re reading this because you need lights and the credit check is the thing standing in your way, know this: not every light company has the same standards. We check multiple companies to find ones that will take you without a deposit. And if none of them work out, pay-as-you-go is always there. No credit check, no deposit, often same-day.

The system is confusing. Getting your lights on doesn’t have to be.

Ready to find your light company? Enter your ZIP code below. We show you every option at your address, with total costs and no-deposit plans upfront.

Check availability at your address