Zach Dell

market, and 20% is still regulated.

So I live in Austin, I'm here in our office in Austin, and we're in Austin energy territory.

We buy our power from Austin energy, and we don't have a choice.

If you live in San Antonio, you probably are a customer of CPS Energy.

They're another municipal utility.

Across Texas, you have a bunch of co-ops like Blue Bonnet and Peternalis and Bandera Electric and Guadalupe Valley Electric Co-op that are member-owned co-ops.

And this is really a relic of the period of deregulation, where in the early 2000s, the

We're going to create retail choice.

We're going to create energy competition in most of the state, but not all of the state.

And the answer to why not all of the state is probably something I don't fully understand, but I think is politically motivated for the most part.

And then a lot of it, frankly, is that many of the geographies where these co-ops exist are rural.

You kind of needed this community-driven effort to build out electricity infrastructure.

And that's why they're member-owned.

That's why they're cooperatives.

So 80% of the state, you have this deregulated construct where you have utilities like Encore, Centerpoint, TNMP, AEP that manage the poles and wires.

They charge everyone in a certain rate class, the same rate based on their rate structure, and they earn a regulated rate of return on their CapEx.

In those same areas, you have generators, you have retailers, and then you have what are considered gen tailors, which kind of do both sides.

And then at about 20% of taxes, you have vertically integrated municipally owned utilities, MOUs, or co-ops.

And those look more akin to the investment utilities in the rest of the country.

There's a chart I imagine many people have seen which plots energy consumption per capita with GDP per capita.