Demand Response Programs and 2015

Now that the new year has been rung in, and everyone is getting back to their regular daily lives, it is time to focus back in on Texas electricity in 2015. I previously wrote about Critical Peak (or Demand Response) programs last July. Now that we’ve rung in 2015, lets take a quick look at the programs. With lots of people shopping for electricity ahead of the summer heat and higher electricity bills, Demand Response programs might be a good way to save money.

In short, a Demand Response program is a plan where when the electricity grid is threatened by potential rolling blackouts (when electricity demand exceeds supply), customers can reduce their only electricity consumption and receive a rebate from their electricity companies. Commercial electricity customers have had the opportunity to do this for years, but only recently has Demand Response become available for residential electricity customers.

Lots of companies offer their Demand Response plans in different ways. Some people offer bill credits, others offer specific demand response plans a customer must order. However, some demand response plans, like Direct Energy, offer their Demand Response programs a little differently. At Direct Energy, customers simply enroll in a Demand Response plan program the same way they’d enroll for something like auto bill-pay. Any plan, and any customer in Oncor and Centerpoint qualify except for pre-pay customers. So if you’re already a Direct Energy customer, simply enrolling in their plan and lowering your electricity consumption on days when you get a notice that it is a Peak Event. By doing that, customers will get a 5% bill credit on their next bill.  As far as Demand Response programs go, it’s the easiest and most seamless one on the market today.

Learn more and enroll below:


Direct Energy Purchases Bounce Energy

This morning Direct Energy has announced their purchase of Texas retail electricity provider Bounce Energy. Bounce Energy, who has consistently been at the top of the Texas Electricity Ratings rankings (currently #1), has easily been the most innovative electricity provider in the country in terms of their online technology/capabilities and their success in reaching out to potential and existing customers through social media outlets.

Additionally, just recently, Bounce made groundbreaking contributions to the electricity space with the launch of their new MyAccount functionality, as well as their Build Your Own Plan functionality. The Build Your Own Plan is the only one of it’s kind in the electricity space, and allows customers to select their own plan term length, the amount of renewable energy in the plan, whether they want automated and paperless billing, and more.

In contrast, Direct Energy has long been lacking in the realm of online functionality, digital customer outreach, and a customer friendly web-portal. So on the surface, this seems like a very smart purchase by Direct Energy, but only if it’s viewed as a strategic purchase of specialists and experienced personnel to bolster some trouble areas of their business. If it is just viewed as a purchase of a customer book, then I’d purport that Direct Energy is wasting a great opportunity.

Fortunately, from some of the quotes in the press release, it looks like Direct Energy is very much viewing this as a strategic purchase:

“We are always looking for new ways to enhance our customers’ experience and satisfaction,” said Steven Murray, President of Direct Energy Residential. “Bounce Energy’s digital marketing insights and e-commerce platform will bolster our capabilities as we expand our product offerings to current and potential customers.”


“Direct Energy is the ideal organization with which to expand our e-commerce platform and digital marketing capabilities,” said Robbie Wright, CEO of Bounce Energy.

If that is the case, and by all appearances it seems to be a strategic purchase, this is great news for both Direct Energy and Texas electricity customers alike. Bounce’s technology and marketing savvy along with Direct Energy’s resources (which allow them to go toe to toe with incumbents like TXU and Reliant), could create the kind of Texas electricity company that will push innovation in new ways that will only benefit Texans, as well as customers in all other states Direct Energy sells electricity.

All in all, it’s a very interesting day for Texas electricity customers. The #7 company on Texas Electricity Ratings is purchasing the current #1 company, but there’s a lot of hope that the union will mean great things for customers. Congratulations to both Direct Energy and Bounce Energy!

Texas Electricity Ratings: Rankings Update: 6/17/2013

Now that Summer is in full swing, with higher electricity rates hitting the market and several months of new customer reviews in the system, it is once again time to update the Texas Electricity Ratings company rankings and see how providers stack up.

Unsurprisingly many established providers lost points this time around with the higher market electricity rates, although that was somewhat offset by other ranking factors. That being said, there’s no arguing how higher electricity prices are altering the Texas electricity landscape. Without further ado, here are the rankings:

Bounce Energy                 4.01
Champion Energy             3.89
TriEagle Energy                3.75
StarTex Power                  3.71
Gexa Energy                     3.68
Amigo Energy                   3.15
Direct Energy                    2.98
TXU Energy                       2.84
Green Mountain Energy     2.75
Reliant Energy                   2.47

Congratulations to Bounce Energy, who once again held onto the top spot. Bounce is followed up by Champion Energy, another mainstay at the top of the ratings. Newcomers TriEagle Energy, StarTex Power, and Gexa Energy round out the top five.

When comparing these latest ratings to the ones from last summer, it is really apparent when just how much the market cap has really altered the way electricity companies are assessing risk in their portfolios as well as how the generators are bidding out electricity. In short, it’s really amazing just how much higher rates are across the board for customers, regardless of which provider they choose.


PUC Continues to Drop Ball on Consumer Advocacy?

I revieve reader questions on a regular basis about how the PUC handles their ranking system. The general thrust is “I see there is a state rankings system for Texas electricity, but it looks dated.” Or “I don’t see the electricity provider that I’m interested in listed on the PUC’s page. What gives?” I wrote an article in early November about some serious flaws and confusing inconsistencies in how the PUC updates and lists the Texas retail electricity providers (REPs) in their complaint scorecard in attempt to address some of these FAQs. I then posted an update in early January pointing out that yet again the PUC had fallen behind and failed to update their complaint scorecard. I’m not sure what the problem is, but  Continue reading “PUC Continues to Drop Ball on Consumer Advocacy?” »

Texas Electricity Ratings: Rankings Update: 10/16/2012

Summer has passed and we’ve had several events that have influenced some of the ways we rank providers at Texas Electricity Ratings, including rate changes as well as the releasing of the latest JD Power & Associates survey of Texas electricity providers, among others. And surprisingly enough, Continue reading “Texas Electricity Ratings: Rankings Update: 10/16/2012” »

Texas Electricity Ratings Updates Rankings: May 8th 2012

Everyone, I’ve been talking about updating the rankings for the past week or so, but we’ve been very busy getting the new Texas Electricity Ratings website launched and live. However, now that we’ve completed that, it is time to focus on the site’s core responsibility: Ranking Texas Electricity Providers and helping customers shop for electricity plans. We’ve updated our rankings below, and I want to talk about the importance of the rankings and shopping during the summer months.

We have a new #1 Electricity provider… Continue reading “Texas Electricity Ratings Updates Rankings: May 8th 2012” »

Texas Electricity, AEP Texas and the Rules of Deregulation – Part 3

If you’ve read Part 1 and Part 2 of my examination of AEP’s application to sell deregulated electricity in Texas you are acquainted with both the basics of the situation, as well as just how much confusion exists by consumers in the Texas marketplace. In this section, I’m going to pick back up on market confusion and competition, examine why AEP is insisting on operating under the AEP brand and talk about how the rest of the Texas electricity market views AEP’s application.

Brand Awareness, Competitive Advantages, and Market Confusion

Anyone who has ever taken a marketing class or just watched a healthy amount of television understands the importance of marketing and brand awareness. When viewed under that lens, it is easy to see why AEP wants to sell electricity service under the AEP brand name. In the same survey we referenced in Part 2, which was commissioned by AEP to support their REP application, it was revealed that 52% of all customers in the AEP Texas TDU service area expressed some form of brand recognition for AEP Retail Energy. To recap, AEP Retail Energy is the brand name AEP hopes to sell retail electricity under and for all intents and purposes is a company that does not even exist to retail customers in Texas. Yet 52% of people expressed recognition. Additionally, it had the second highest recognition of any REP brand currently operating in any AEP territory behind only West Texas Utilities (37% to 36%), the former AEP retail electricity branch which was sold to Direct Energy in 2002.

That is the power of branding. When a company that doesn’t even exist yet in Texas has 56% total state market awareness and is effectively tied for first as the most known brand in a company’s native service territory, it is easy to see why AEP is so intent on doing business as AEP Retail Energy. The AEP name brand gives them a huge competitive advantage.

If you don’t believe brand awareness is that big a deal, lets further shine a light on the competitive advantages and their importance in the Texas deregulated electricity marketplace. Here are some more telling facts from the survey results turned up by AEP.

  • As we’ve established already, the AEP footprint in Texas is a mess. The highest percentage of recognition by any retail electricity provider was a meager 37%. The second highest response was for a fictional AEP company that doesn’t even exist. Reliant and TXU, the market incumbents for Houston and Dallas respectively, both had a 35% recognition with the people surveyed. No independent REP mentioned in the survey had higher than 13% recognition, and most were in the single digits.
  • In the Oncor service area, TXU had a 73% recognition amongst people surveyed. This is a perfect example of the power of brand awareness. Everyone in Dallas knows TXU. Reliant, the other big incumbent in Texas had a 30% recognition with people in the Oncor footprint. Almost no other REP mentioned in the survey had higher than 10%.
  • In Centerpoint, the results are basically the opposite if Dallas. Reliant had a 79% brand recognition while TXU had a 39% brand recognition, which is impressive considering it is outside of their historical footprint. And again, no other REP was even close to TXU and Reliant in the survey.
  • So what does all this data tell us? It tells us that brand recognition is extremely important when competing for customers. It’s no coincidence that TXU and Reliant are far and away the largest two REPs in the state of Texas. The two companies combine to serve almost 45% of all deregulated electricity customers in Texas. Is it any wonder that AEP wants to also capitalize on their own pre-existing brand awareness? They want to be one of three companies fighting for that 45%, as opposed to one of the other 50 or so REP’s slugging it out for the other 55% percent of customers.

    What Does Everyone Else Think?

    Not surprisingly, not everyone is on board with the AEP license application. CPL (Central Power & Light), sold by AEP to Direct Energy in 2002, has filed an intervention in their petition protesting the move. We can assume Direct Energy is frustrated by the idea that AEP could resume business in the REP space. Much of the value they got when they purchased CPL and and WTU (West Texas Utilities) from AEP was in the familiar brand names to the people in those service areas. The same way Reliant and TXU have the name recognition and history of brand awareness that comes with being an incumbent. If AEP suddenly comes into those areas and sells electricity as anything with AEP in their name, it drastically devalues Direct Energy’s purchase. And customers in that area will likely be even more confused, as has already been illustrated.

    Direct Energy is not alone in their protests. The Alliance for Retail Markets (ARM) and The Texas Energy Association of Marketers (TEAM) have also filed motions to intervene in protest of AEP’s application. ARM is a coalition of REPs that act together in some matters, including Gexa, Champion Energy, Green Mountain and more. TEAM is a similar group of deregulated market participants made up or other REPs with members that include Bounce Energy, Amigo and Tara Energy, StarTex Power, Cirro Energy and more. So basically, all of the other REPs in Texas are opposed to AEP’s application to sell deregulated electricity. They know that AEP will be have a distinct advantage because of established brand recognition. Additionally the PUC will also weigh in with their opinion in court, and my understanding is that they’re strongly against the idea of allowing AEP to do business as AEP Retail Energy. Whether that prevents them from doing business as some other name isn’t clear

    This concludes my examination of the importance of brand awareness and the market confusion that still exists in the world of Texas electricity. In the last post in this series, I’ll offer my own opinions on AEP’s actions as well as some other concerns that aren’t being addressed in the hearings.

    Texas Electricity, AEP Texas and the Rules of Deregulation – Part 1

    In a series of articles, I want to take a look at American Electric Power’s (AEP) court hearing regarding their application to become a Retail Electricity Provider (REP), similar to Reliant, TXU, Gexa, or Bounce. The interesting thing about their application is that AEP is currently a Transmission and Distribution Utility (TDU) for 2 regions of Texas. This is interesting because all TDU’s like Centerpoint, Oncor and AEP were forced to split from their REP businesses as a part of deregulation in 2002. Consequently, this hearing is big news and could have a huge impact on the entire Texas electricity landscape.

    Understanding the Basics

    To start, lets take a quick look at the intent of the rules put in place by the PUC when deregulation was first enacted. In section 25.342 of PURA (Public Utility Regulatory Act), the general purpose of the separation of TDU’s (Transmission and Distribution Utilities) and REP’s is laid out as follows:

    The commission seeks to prohibit practices between regulated and
    competitive activities that may unreasonably restrict, impair, or reduce the level of competition during the transitional separation of personnel, information flow, functions, and operations, and after a competitive market is established

    In short, the intention of the rules are to prevent a competitive advantage in the deregulated areas of the Texas electricity market. Companies like Centerpoint and AEP who operate transmission utilities and have access to valuable customer information as well as an established brand shouldn’t be allowed to sell electricity. This separation is the reason that a deregulated electricity market can function and succeed. It is why in 2002 Reliant spun off Centerpoint and TXU spun off Oncor. AEP sold Central Power & Light and West Texas Utilities, which were their retail electricity business units, to Direct Energy. If the PUC hadn’t forced companies to separate their retail and transmission businesses then creating a fair deregulated market would have been impossible.

    AEP Texas & Retail Electricity in Texas

    When PURA went into effect in 2002, AEP opted to sell their retail electricity interests outright and concentrate on their power generation and transmission businesses. Now, nine years later, AEP Texas has filed an application with the PUC to become a certified retail electricity provider. And surprisingly, AEP has been granted a hearing that will determine whether or not they will be certified to sell electricity to all mass market customers in Texas. As I write this, parties are giving testimony in the hearing and a decision will be made sometime in early 2012. If their motion fails, AEP will still have the right to appeal in another court.

    How is this even possible? As previously mentioned, deregulation forced the separation of retail and transmission energy companies in 2002 and AEP was forced to sell their retail interests. How can they now be allowed to start a new retail company using the AEP name?

    The short answer, unsurprisingly, is legalese. The company seeking a PUC license is a subsidiary of parent company AEP, registered as AEP Texas Commercial & Industrial Retail Limited Partnership. The two separate companies that operate the transmission and distribution services, commonly referred to as AEP or AEP Texas in this article, are officially known as AEP Texas North and AEP Texas Central, respectively. In the eyes of the law, these are all three separate and independent companies.

    Of course, there is some precedent in this situation. Oncor, the TDU for the Dallas and Ft. Worth area, and retail electricity provider TXU operate as two individual entities under parent company Energy Future Holdings. But this isn’t quite the same situation at all. The split of Oncor and TXU was carefully handled with massive PUC oversight in 2002 to ensure the two companies were truly separate. Oncor operates completely independently without any management from Energy Future Holdings. Additionally, great pains were made to separate TXU and Oncor with very different names and separate branding. And over time, Oncor has taken on separate minority ownership and board members from their parent company to even further the separation. AEP is simply coming along almost a decade later, starting a new subsidiary, and saying they’d also like to sell retail electricity to everyone in the deregulated areas of Texas-despite the fact they also operate two TDUs. The kicker is that they’d like to do it under the AEP name or some variation of the highly recognized AEP brand. But more on branding and marketing later.

    These are just the basic facts surrounding the AEP case in regards to their intentions, the complications, and how it relates to the rules and boundaries set up by the initial laws put in place during deregulation in 2002. In the next section I will examine the details of AEP’s application and the issues surrounding their efforts to sell deregulated electricity in Texas .

    Texas Electricity Provider Map

    Last week’s purchase of First Choice Power by Direct Energy was yet another major acquisition of a Retail Electricity Provider by a major energy conglomerate. There’s been around a half a dozen of these deals in the past year, and in my opinion things have gotten a bit muddled and confusing. So I wanted to write a post to chart exactly who owns who in the deregulated electricity space in Texas.

    Dominion Resources: Dominion Energy probably isn’t a name that is very recognized by Texas electricity customers. However, they are a huge energy company that deals in both energy generation and distribution in multiple states. Headquartered in Richmond, Virginia, they own the incumbent and regulated electricity providers in Virginia and North Carolina. In Texas, they own Cirro Energy, which they purchased in 2008. Earlier this year, Cirro Energy purchased Simple Power and absorbed their customers.

    NRG: NRG, a new Jersey based company, is another huge energy company with massive power generation resources. On top of energy generation plants, NRG also owns Green Mountain Energy, which they purchased in 2010 for 350 million dollars. In 2009, they purchased former incumbent Texas electricity provider Reliant Energy for 287 million and change when Reliant was under heavy financial distress. This was a steal considering Reliant was the second largest REP in the state at the time and has huge brand recognition. In turn, Reliant Energy owns (and I believe operates) Pennywise Power, which is a new brand they’ve put into the deregulated Texas electricity market to try and capture different customers without effecting their core brand. So NRG owns Green Mountain and Reliant, and Reliant in turn owns Pennywise Power.

    Just Energy – Just Energy is yet another big energy company, with resources all over North America. They had been a fairly smaller player in the retail electricity market in Texas until recently. Just Energy itself was mostly a niche provider, offering 5 year long term contracts to customers. However, they recently purchased the entire retail arm of Fulcrum Power. That includes Amigo Energy, Tara Energy, and Smart Prepaid. So now all of those brands are part of the Just Energy portfolio. They’ll likely keep the branding and still do business under the names Tara and Amigo, but it’s all Just Energy. Just Energy also owns another smaller REP, Commerce Energy.

    Direct Energy: Direct Energy is actually a subsidiary of a British company called Centrica, but they’re known almost exclusively in North America as Direct Energy, so that’s the name we’re going with. Direct Energy is yet another huge energy generation company with huge and varied resources. In the retail electricity space they do business as Direct Energy and they are one of the biggest REP’s in Texas. They also operate in Texas as WTU Energy and CPL Energy in two respective TDSPs. In the Spring, Direct Energy also purchased Gateway Energy Resources for 90 millions dollars. Since then, Direct has removed Gateway as a brand from doing business in Texas. Just last week, Direct Energy made another huge purchase, this time of First Choice Power for 270 million dollars. Which is a huge price tag. So, as of now, every company I mentioned above is really a subsidiary of Direct Energy.

    Constellation Energy: Constellation Energy is the largest energy supplier in America. Their 2007 revenues were 21 billion dollars. So yes, they’re another big energy guy. They own the regulated electricity entity Baltimore Gas and Electric. In 2 month period last spring and summer, Constellation announced purchases of both StarTex Power as well as MX Energy, two retail electricity providers that operate in the Texas deregulated markets.

    Gexa Energy: NextEra Energy is the parent company of Florida Power and Light, the regulated electricity provider for much of Florida. They’re another big energy company, having generation resources in over 20 states. In 2005, Florida Power & Light purchased Gexa Energy. They still do business in Texas under the name Gexa.

    Dynowatt: Dynowatt is a subsidiary of Accent Energy, which is a large company with natural gas ties in Ohio. Accent also serves deregulated New York, but they do business in Texas as Dynowatt.

    TXU Energy: TXU is actually a subsidiary of Energy Future Holdings, which also owns Luminant, the power generation portion of the old TXU company that was forced to split because of deregulation laws. Now Luminant and TXU operate separately. TXU is the largest individual REP in Texas and one of the two former incumbent providers.

    The following Retail Electricity Providers are stand-alone entities:

    Texpo Energy: Texpo Energy is a smaller company operating in Texas. What makes them interesting is that they actually operate under 3 different brand names while all sharing the same PUC Certificate. The other two brands are Southwest Power & Light and YEP. So to sum things up, Texpo, Southwest Power & Light, and YEP are all the same company operating in Texas under different names.

  • Champion Energy
  • Stream Energy
  • Ambit Energy
  • Brilliant Energy
  • Texas Power
  • Liberty Power
  • Mega Energy
  • APNA Energy
  • Bounce Energy
  • Spark Energy
  • Hopefully this helps to give people a clearer picture about who some of the players are in Texas electricity. It is important that people know exactly who the company is that is supplying their electricity. For example, if someone had a bad experience with one company, they might not want to get service from another one of their subsidiaries. And since there’s been so many purchases and mergings of REP’s in the last 6 months, I thought it might be a good idea to chronicle which companies have ended where after the dust has settled. I’ll try to update this page moving forward as well. I doubt we’ve seen the last of big REP acquisitions, so this family tree might change.

    I’ve included a crude flowchart below. Yes, I do realize it looks like it was put together by a 3rd grader.

    Texas Electricity Ratings Update: New Rankings Released

    Good afternoon, everyone. I just wanted to post a quick update that I’ve revised the Texas Electricity Ratings ranking of providers this week. The new rankings and numbers are posted, although there wasn’t much change in the actual order of providers.

    Bounce Energy remained in the top spot, boosted by their great freshman performance in the JD Power Rankings that were released in August. They raised their average a few tenths of a point with that addition and by continuing to work to their strengths as an REP. So congratulations to Bounce Energy!

    Champion Energy held onto the number 2 spot, although Gexa (leapfrogging Direct Energy) closed the gap after Champion was hit with some negative reviews by customers after August heat spikes wreaked havoc on their indexed plans. Direct Energy and StarTex power rounded out the top 5.

    It was a tough summer for electricity providers in Texas. Lots of companies suffered losses because of the energy shortages. And because of some bad pricing scenarios with some variable and indexed plans, many providers have pulled their Month To Month plans from the market completely. By the same turn, lots of customers had bad summers as well, just because of bad circumstances and the worst summer in Texas recorded history. That being said, the wheels keep turning. Below is a full list of the provider rankings.

  • 4.36 Bounce Energy
  • 3.98 Champion Energy
  • 3.93 Gexa Energy
  • 3.65 Direct Energy
  • 3.43 StarTex Power
  • 3.19 Tara Energy
  • 3.05 Green Mountain Energy
  • 2.75 Spark Energy
  • 2.66 Dynowatt
  • 2.51 WTU Energy
  • 2.44 CPL Energy
  • 2.23 Amigo Energy
  • 2.13 TXU Energy
  • 2.08 Reliant Energy
  • Texas Electricity Ratings rates providers in the marketplace based on a number of different factors, including pricing, PUC complaint statistics, Better Business Bureau evaluations, third party surveys, customer service and many other important categories.