The first electric power plant in Texas was built at Galveston in the early 1880s, and thereafter industrial development was slow. By 1900 there were numerous small privately owned generating systems, some steam, some hydroelectric. The next decade brought a few larger developments, of which perhaps the best example was the hydroelectric plant established at a dam built across the Colorado in 1891–92 to serve the city of Austin. Thought expected to provide 14,000 horsepower, the system, it was found, would produce only 900 horsepower during the summer months of minimum flow. The dam was destroyed by flood in 1900. In 1912 a high-voltage transmission line was built from Waco to Fort Worth with a branch line from Hillsboro to Ferris, whence it branched north to Trinity Heights (near Dallas) and south to Corsicana. In 1920 the state consumed 679,000,000 kilowatt-hours, evidence of a marked expansion of the power industry. By 1925 consumption reached a total for the year of 1,268,000,000 kilowatt-hours, and in 1930 the total was 2,922,000,000. The only drop occurred in 1935, when only 2,538,000,000 kilowatt-hours was consumed. In 1945 more than 6,780,874,000 kilowatt-hours was sold to about a million customers. The average cost per kilowatt-hour to the consumer in 1945 was about one-half what it was in 1925.
Although rural electrification began with the first cross-country transmission lines, it was not until the organization of rural electric cooperatives in 1936 under the Rural Electrification Administration that rural electrification began to be widespread. In 1946 seventy-one co-ops served 146,000 rural homes, and privately owned lines served approximately 118,000. By 1950 the transmission lines in Texas of all power-producers were coordinated into the Texas Grid System. By 1954 the total generating capacity of Texas power plants was 5,521,180 kilowatts, four times as much as in 1944. Of the 192 plants, seventy-two were powered by steam and produced 4,971,400 kilowatts; 101 were powered by internal combustion engines and produced 196,990 kilowatts; nineteen were hydroelectric and produced 352,790 kilowatts. By 1963 the 176 electrical power plants in Texas increased their total generating capability to 11,990,392 kilowatts, more than twice the 1954 figure. Although by 1970 the number of electric power plants had decreased to 171, their generating capability had risen to 25,117,928 kilowatts, almost five times the 1954 capacity. Of the total number of plants, eighty-two were steam-powered and had a capability of 23,955,741 kilowatts, sixty-eight were internal combustion engines or gas turbine-powered and had a capacity of 644,727 kilowatts, and twenty-one hydroelectric plants had a capability of 517,460 kilowatts. Seventy-seven distribution cooperatives of the Rural Electrification Administration served 97 percent of the total Texas farms in 1970.
In 1992 there were 132 electric power plants serving Texas (fourteen were not located in the state) with a combined capacity to generate 67,806 megawatts. Sixty-seven percent of the power plants were fueled by natural gas, 30 percent by coal and lignite, 7 percent by nuclear power, and 1 percent by water flow. Electric power in Texas was supplied by municipally owned systems, rural electric cooperates, federal and state financed projects, and ten investor-owner electric utility companies. In 1992 Texas electric utilities employed more 40,000 people and received $14 billion in revenues.