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The Difference Between Energy and Utility Companies – and Why it Matters

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When you get your power bill, it may be confusing regarding who sells you power and who actually generates electricity and maintains the power lines. In deregulated energy states like Texas, residents have a choice when it comes to Retail Electric Providers (REPs) but not utility companies.

We help outline the differences between a utility company and an energy company — and how that impacts you and your budget.


What are Utilities? Clarifying the Terms

Utility Company

Utility companies transmit, connect, and disconnect electricity for homes or businesses. They measure how much energy you’re using (kWh) and pass that on to your energy provider for billing. Utilities read and maintain your electric meter, plus maintain power lines and poles. Your electricity bill may label utility companies as the Transmission and Delivery Service Provider (TDSP) or Transmission and Distribution Utility (TDU).

Each month, your power bill will include a delivery charge for the TDSP or TDU to help cover operational costs and equipment. Residents are assigned a specific utility company based on geographical location, not choice. Texas has five utility companies that serve deregulated areas:


When to Contact Your Utility Company: If you have a damaged meter, meter reading issues, or a power outage (numbers listed above), call your utility company or check their website.


Retail Electric Provider (aka Energy or Power Company)

Sometimes casually referred to as your “energy company” or “power company,” REPs like Payless Power offer a variety of prepaid electricity plans. Texas has dozens of providers in the competitive energy market that set rates and bill the customer directly. Your bill will come from Payless Power or your REP.

When to Contact Your Provider: When you have a billing issue, want to switch plans, or need to make a payment, contact Payless Power or your REP. Many companies, including Payless Power, have apps or online portals that help you easily track your usage, your account balance, and add money to your account.

Finally, generators are the source that generate power, send it to the utility company to transmit to customers, who then chose a provider that sells the plans. Customers don’t interact directly with this source. Rest assured, you don’t need to be an expert on the Texas power grid to get reliable, affordable electricity.

Payless Power was created to offer Texas communities cheap electricity rates and excellent customer service. With prepaid no-deposit electricity, customers don’t need to worry about a lengthy approval process or credit check. Plus, Texans can keep their account balance positive with daily alerts and the ability to add funds quickly and easily.


Find a Payless Power energy plan in your Texas zip code — and start saving money today.

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