AEC Market Education - Module #7
How Electricity Service Works in ERCOT
Part 1
The big picture: who does what when electricity gets turned on
Most people think of electricity as a single thing — you call someone and the lights come on. In Texas, it actually involves three separate players, each with their own job. Understanding who does what makes everything else in this module make sense.
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Step 1
You (the customer)
You pick a Retail Electric Provider and sign a contract. That’s it. Everything else happens behind the scenes.
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Step 2
Your REP
The REP submits a Market Transaction to ERCOT. This is a digital request — no trucks, no crews. Just data moving through the system.
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Step 3
ERCOT
ERCOT processes the transaction and routes the instruction to the right utility company (TDU) for your address.
Step 4
TDU (your wires company)
Oncor, CenterPoint, AEP, or TNMP — depending on your address — owns the physical equipment. They’re the ones who actually touch the meter.
The most important thing to understand
Your REP sells the electricity. Your TDU owns the infrastructure. These are two completely different companies. When something goes wrong with your meter, the REP didn’t break it — the TDU owns it. When your rate goes up, the TDU didn’t change it — that’s your REP. Keeping these two separate in your head makes every other part of this much clearer.
Part 2
Three different situations — three very different experiences
Not all service requests are the same. Switching REPs on an existing account takes a few days and requires no truck. Getting power turned on at a brand-new building can take months and involves the city, the TDU, and your general contractor all having to finish their jobs in the right order. Select your situation below.
Path A — Standard switch
Path B — Move-in / new occupant
Path C — New construction
Path A — Most common
Standard switch — changing REPs on existing service
Your meter is already installed, service is already on, and you’re moving from one REP to another. No trucks. No inspections. This is almost entirely a data transaction between your new REP, ERCOT, and the TDU.
No truck required
1–21 days typical
No permitting involved
Path B — Move-in / new occupant
Meter exists — service is off or in someone else’s name
The building is already wired and the meter is already there, but service is either disconnected or held by the previous tenant or owner. You need to establish service in your name. Usually straightforward — unless the meter needs to be physically re-energized, which means a TDU truck.
May need truck
Same day to 5 days
Check ESI ID status first
Path C — The complicated one
New construction — no meter exists yet
There is no ESI ID. There is no meter. There is no account to switch to. Before a REP can do anything, the TDU has to install the meter — and before the TDU installs the meter, the city has to sign off. This is where the permitting wall lives, and it’s the single biggest source of “why is my power not on yet?” frustration in new commercial construction.
Permitting required
Days to months
GC coordination critical
Part 3
The permitting wall — what actually stands between you and a working meter
Every municipality in Texas handles this a little differently, but the underlying logic is the same everywhere: the TDU will not install or energize a meter without confirmation that the building meets minimum safety standards. That confirmation comes from the city — and it takes different forms depending on the situation.
The one thing that surprises people every time
A Clean & Show permit gets you power. It does not get you occupancy. A business that moves in under a Clean & Show — even accidentally, even just to store a few boxes — is in violation. The Certificate of Occupancy must come before any tenant takes possession of the space. These two things are not the same, and the city will treat them very differently if they find out.
Common violations that hold up a meter release — even after paperwork is filed
The pro move: start the permitting conversation on day one
The CO timeline sets everything. Your general contractor pulls the building permit when construction starts, but the certificate of occupancy is only issued after all inspections pass — electrical, mechanical, fire, and sometimes more. Nobody can rush a city’s inspection schedule. The right time to ask “when will we have power?” is not two weeks before opening. It’s the day you break ground.
Part 4
Multi-family & apartments: how electricity works differently when there are dozens of meters
A 200-unit apartment complex isn’t one electricity account — it’s potentially 201 of them. Every unit has its own meter and ESI ID, plus the property has a separate “house” account for common areas, hallways, parking lot lights, and amenities. Managing all of that requires a system — and that system is the Continuous Service Agreement.
Model 1
Master-metered
One meter for the entire building or complex. The landlord pays the whole electricity bill and folds the cost into rent. Simple for tenants — complicated for the landlord, who absorbs all cost risk.
Simple billing — one account, one bill
Landlord absorbs 100% of usage risk
Tenants have no incentive to conserve
Common in older and smaller properties
Model 2
Individually metered
Each unit has its own meter and ESI ID. Tenants establish their own REP accounts. Landlord maintains a separate house account for shared spaces. This is the standard in most newer Texas multifamily construction.
Tenants pay their own usage — fair allocation
Landlord only covers common areas
Vacant units need coverage — enter the CSA
Standard in new Class A construction
The continuous service agreement (CSA)
What happens when a tenant moves out?
When a tenant moves out of an individually-metered unit, their REP account closes. If nobody picks up that meter immediately, the TDU will eventually de-energize it — which means a truck roll to turn it back on when the next tenant arrives, plus potential delays. The Continuous Service Agreement solves this. The property manager maintains a standing REP account that automatically catches any vacant unit the moment a tenant account closes. No gap. No de-energization. No truck.
01
Tenant gives notice
Tenant notifies property manager they’re moving out. Their REP account will close on the move-out date.
02
Unit goes vacant
Tenant’s REP closes the account. Without a CSA, the meter is now orphaned and the TDU will eventually shut it off.
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CSA catches the meter
The property manager’s standing CSA account automatically picks up the ESI ID. Power stays on. No truck. No gap in service.
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New tenant establishes service
When the new tenant signs up with a REP, that account takes over the meter and the CSA releases it. Cycle repeats.
Why the CSA rate matters more than you might think
If a unit sits vacant for 60 days between tenants — not unusual — those 60 days of usage bill against whatever rate the property manager negotiated on their CSA. Across a 200-unit complex with normal turnover, that adds up fast. The CSA isn’t just a convenience tool; it’s a procurement decision that deserves the same attention as any other energy contract. A poorly-negotiated CSA rate on a large complex can cost thousands of dollars a year in avoidable overpayment on vacant units.
New construction multi-family: the permitting issue applies here too
A phased apartment development may have different buildings completing at different times. The TDU will not energize individual unit meters in any building until that building has its certificate of occupancy. In a phased project, this means Building A might be ready to lease while Building B is still waiting on inspections. Each building needs its own CO before its meters go live — and the property manager needs a CSA standing by from day one to catch units the moment they become available.
Part 5
When things don’t go smoothly — transaction scenarios worth knowing
Most service transactions process without a hitch. But the ERCOT retail market has defined procedures for a range of situations that can complicate or block a switch, move-out, or enrollment. These come up more often than people expect — and knowing they exist saves a lot of frustrated phone calls.
The underlying system: Texas SET swimlanes
All of these scenarios — and dozens more — are formally documented by ERCOT as Texas Standard Electronic Transaction (SET) swimlanes. These are the official business process flows that define how every market transaction is supposed to work, step by step, between REPs, TDUs, and ERCOT. They’re publicly available at ercot.com/mktrules/guides/txset/sw — dense reading, but authoritative if you ever need to know exactly what should have happened and why it didn’t.