What Electric Company Service My Area – In Texas, four utility companies deliver electricity to most of the state AEP Texas, CenterPoint Energy, Oncor Electric Delivery, and Texas-New Mexico Power (TNMP). If you fall into the service area of one of these companies, you have the power to choose your electricity provider.
When you choose an electricity supplier, it supplies the electricity you use, while the local utility company for your area distributes that electricity to your home.
What Electric Company Service My Area
AEP Texas is a subsidiary of American Electric Power (AEP) and delivers electricity to more than a million customers. AEP Texas is unique because the electricity plans available to you and how much your electricity delivery costs depend on where you live in AEP Texas’ service area.
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Oncor is the largest electric utility provider in Texas, serving more than 10 million customers across the state. Most of their service areas are in Dallas, Fort Worth and surrounding areas. However, it is also a portion of western Texas.
Texas-New Mexico Power (TNMP) is the smallest utility provider of the four, serving 260,000+ homes and businesses across the state. Its service area is sporadic, with a larger area in west Texas and south of Houston, and some service areas in the Dallas-Fort Worth metroplex.
Other utility companies in Texas do not offer Energy Options like the above utilities. There are two types:
If you want to learn more about the electricity market in Texas, check out our page on comparing electricity rates in Texas. It will walk you through everything you need to know about Texas’ competitive electricity market.
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Electric utility companies deliver electricity to your home. It owns and maintains the electrical infrastructure (poles, wires, transformers, etc.) to ensure you have reliable electrical service.
There is only one utility provider for the designated area. For example, Houston’s only electric utility company is CenterPoint Energy. If you live in Houston, you can’t switch to another utility company like Oncor, because CenterPoint is the only company that delivers electricity to your area.
Utility companies in Texas are regulated by the Public Utilities Commission of Texas (PUCT). To ensure utilities have the funds to maintain their electric infrastructure, the PUCT approves transmission fees (aka “TDU Transmission Fees”) for each utility. These costs are the same, regardless of who your electricity supplier is.
The utility also works with the Electric Reliability Council of Texas (ERCOT) to ensure grid stability across the state.
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While your local utility in Texas is responsible for delivering electricity to your home, your electricity supplier is responsible for providing the electricity you use.
In most countries with Energy Choice, your utility company can also provide your electricity. But this is not the case in Texas. Utility providers only deliver electricity, and you must get your electricity supply from a retail electricity provider.
The above delivery charges are effective as of September 1, 2021, and are set to change on March 1, 2022. PSE&G, or Public Service Electricity & Gas, is New Jersey’s largest utility serving approximately 55% of New York’s electricity customers. Jersey. Its service area runs from the northern part of the country near New York City south (and slightly west) to Philadelphia.
JCP&L, or Jersey Central Power & Light, is the second largest utility in New Jersey. Its service area covers two areas separated by PSE&G’s service territory. The eastern portion of JCP&L’s service territory covers the northern half of the Jersey Shore, and the inland portion. The western portion of JCP&L’s service area covers the area in northern New Jersey along the Pennsylvania border.
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ACE, or Atlantic City Electric, is the third largest utility in New Jersey. Its service area covers the southern third of the state of New Jersey, from Atlantic City in the east to Philadelphia in the west.
RECO, or Rockland Electric Company, is the smallest IOU. Its service area is in the northern part of New Jersey along the New York border.
Vineland Municipal Utilities is the only municipal utility located in New Jersey. This utility serves customers in the City of Vineland, and is operated by the City of Vineland. Its service area is within the ACE service area. Sector investments offer targeted opportunities for shares of companies in specific economic segments. The utility sector includes companies such as electric, gas, or water utilities, or those that operate as producers or distributors of electricity.
As of July 2022, the sector has a market capitalization of more than $1.58 trillion. Although utilities are private, for-profit companies, they are part of the public service infrastructure and are highly regulated. People who include utilities in their portfolio hold them as long-term investments and usually use them to generate income through dividends.
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Utilities include large companies that offer multiple services such as electricity and natural gas or specialize in one type of service, such as water. Some utilities rely on clean and renewable energy sources such as wind turbines and solar panels to generate electricity.
Utilities typically offer investors stable and consistent dividends, coupled with less price volatility relative to the overall equity market. As a result, utilities tend to do well during recessions and economic downturns. Conversely, utility stocks tend to fall out of favor with the market during times of economic growth.
Utilities require a significant amount of expensive infrastructure and consequently carry a large amount of debt on their balance sheet. This debt burden makes utilities hypersensitive to changes in market interest rates. And because utilities are capital-intensive, they require a continuous inflow of funds to finance infrastructure upgrades and new asset purchases.
In July 2022, higher inflation poses new challenges for utilities. During the inflation of the 1970s and 80s, utilities faced huge debts, soaring fuel costs, blackouts, increased regulation, and bankruptcy. Utilities that successfully weather economic challenges will likely continue to rank among the best investments for security, generous income, and steady wealth building.
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Because utility stocks pay reliable dividends, investors often favor them over lower-dividend paying equities. After the financial crisis, the Federal Reserve cut interest rates, to stimulate the economy. As a result, investors flocked to Utilities, as safe investments as utility companies are viable defensive options for investors during macroeconomic downturns.
If interest rates rise, investors can find higher-yielding alternatives than utilities. When utilities pay a 3% dividend yield but rising interest rates raise Treasury bond yields to 4%, utility companies must increase their dividend payments to match the rising yields.
Aside from investing in individual shares of utility companies, investors can also buy regional utilities or invest in exchange-traded funds (ETFs) or sector funds containing a basket of shares of utility companies located throughout the US.
The Fidelity Select Utilities Portfolio (FSUTX) includes 29 utility companies as of March 2022 and produces an annual dividend of 1.52%. Utility Select Sector SPDR Fund (XLU) is one of the largest utility sector funds, with $15.5 billion in net assets, and is one of the most actively traded utility ETFs, with more than 18 million shares traded daily. The fund typically pays a dividend yield of around 3%.
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XLU’s dividend yield beats the yield for the S&P 500 equity ETF, the SPDR S&P 500 Trust ETF (SPY), which as of July 2022, pays about 1.56%.
Utilities are stable investments that usually provide regular dividends to shareholders, making them a long-term buy and hold option. Dividend yields of utility stocks tend to be higher than those paid by other equities.
In times of economic downturn with low interest rates, utilities become attractive. They show lower volatility and provide a desirable source of predictable investment returns from the dividends they pay on their shares.
Utilities, however, face strong regulatory oversight and require expensive infrastructure that requires regular updates and maintenance. To meet these infrastructure needs, utility companies often float debt products that, in turn, increase their debt burdens. This debt also makes these services sensitive to interest rate risk. If rates rise, companies must offer higher yields to attract bond investors.
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The utility sector consists of companies that provide electricity, natural gas, water, sewage, and other services to homes and businesses. Public utilities are privately owned companies regulated by public utility commissions that operate at various levels of jurisdiction, usually at the state level.
The commission is overseen by the National Association of Regulatory Utility Commissioners. NARUC members are responsible for ensuring reliable utility services at fair and reasonable prices. In 2022, utility companies in the United States with strong investor interest include:
In 2020, President Joe Biden called for the country to achieve a 100% clean energy economy and net-zero greenhouse gas emissions no later than 2050, implementing an investment of nearly $2 trillion to achieve this goal. The energy industry and utilities have the opportunity to promote grid modernization and clean energy efforts by tapping into funds allocated under the Infrastructure Investments and Jobs Act which includes $65 billion earmarked to improve the national electricity infrastructure.
The 2022 industry outlook report by Deloitte identifies five trends for the utility industry that include enhanced competition, infrastructure expansion, greater transportation electrification, an emphasis on disaster preparedness, and traditional.
