In regulated electricity markets, customers cannot choose their provider and are bound to the utility in that area. They have no choice but to purchase electricity from regional utility monopolies that own and operate all three parts of electric service. Customers also have to purchase at prices regulated by the state and federal government.
What electricity deregulation does is allow consumers to choose their own electric company and encourage free market competition. In deregulated areas, prices can be determined and driven lower than in regulated areas because of the competition. In a deregulated place, a person’s electricity is still delivered to them through local power lines. What changes is who they’re buying power, how much they’re paying for it, and the power to choose.
Texas’ move to full deregulation split the power sector into three parts: generation providers, transmission owners, and retail companies. Today, most of TX is deregulated. However, there are still areas of Texas that remain regulated markets.