Texas ranked second nationwide for electricity disconnections in 2024, with roughly 23% of residential accounts shut off for billing or nonpayment issues, according to the Energy Information Administration. Only Oklahoma posted a higher rate.
Investor‑owned utilities lead the disconnects
A Dallas Morning News analysis of the same data shows that investor‑owned utilities in Texas disconnected about a third of their customers during the year—three times the rate of municipally owned and cooperative utilities.
About 85% of Texans can choose a for‑profit retail electricity provider because the state deregulated its market in 2002. The utility that owns the transmission and distribution lines varies by location. Residents of cities such as San Antonio and Austin must purchase power from city‑owned utilities, while many rural households receive service from electric cooperatives. Both municipal and cooperative utilities opted out of the deregulated market and manage their own infrastructure.
Profit focus may hurt low‑income families
Experts say the disparity reflects differing business strategies. Investor‑owned companies, which include transmission and distribution firms like Oncor and CenterPoint as well as retail providers such as TXU and Reliant, are accountable to shareholders and prioritize profit. This can leave lower‑income customers vulnerable when they have low credit scores or cannot afford required deposits.
“It’s based on profit. You can’t squeeze blood out of a turnip,” said Margo Weisz, executive director of the Texas Energy Poverty Research Institute. Higher infrastructure costs, such as grid expansions, are often passed on to residential ratepayers, further increasing the risk of disconnection for those already struggling.
Co‑ops and municipal utilities offer more flexibility
Municipal and cooperative utilities are owned by local governments or elected boards, giving them a customer‑focused mandate. While their rates may be slightly higher than some retail plans, they frequently provide options that help prevent shutoffs, such as waiving deposits with a letter of credit, prepaid plans, and local assistance programs.
“We’re really community focused. Any way we can help our members, we will always try to do that,” said Caitlin Creed, director of marketing and communications at CoServ Electric, a former Denton County cooperative.
These utilities can also generate and transmit power themselves, reducing reliance on costly grid expansions. Their emphasis on energy conservation leads to programs like local battery storage, home‑efficiency assistance, and demand‑response incentives that lower overall consumption.
Conservation efforts on both sides
Investor‑owned utilities do offer conservation programs. Oncor reports that about one million customers have participated in its energy‑efficiency initiatives over the past 24 years, and some retailers partner with Oncor for demand‑response plans.
Nevertheless, the higher disconnection rate among investor‑owned utility customers suggests that profit‑driven models may not provide the same safety net for low‑income families as customer‑owned utilities do.
What this means for Texas households
For Texans facing energy insecurity, the choice of utility can have real consequences. While local governments such as Dallas County and the Texas Department of Housing and Community Affairs offer payment assistance, the underlying structure of the utility—whether investor‑owned or community‑owned—plays a significant role in how easily families can stay connected to power.
Understanding these differences can help consumers make informed decisions and encourage policymakers to consider how utility regulation impacts the most vulnerable members of our neighborhoods.
Original reporting: Texarkana Gazette — read the source article.
