The Texas electricity grid is often looked at as the paradigm for wind energy for an electricity grid. And in many ways, that’s absolutely true. Texas achieved another milestone on Thursday night, Continue reading “Texas Electricity Hits New Wind Milestone on Thursday” »
I saw this nice little article in the Texas Monthly today as a primer of things customers should know about deregulated electricity in Texas. It’s a great premise, and the three things they listed are certainly things Texas customers need to understand, but I’d definitely expound on a few things that Texas electricity customers should be aware of when looking for electricity providers. Continue reading “Texas Deregulated Electricity Primer” »
After falling to Green Mountain Energy last year in the annual J.D. Power & Associates award for customer satisfaction, Champion Energy has regained the top spot in the coveted customer survey. Congratulations Champion Energy Services! This marks Champion Energy’s 5th finish Continue reading “Champion Energy Wins Customer Satisfaction Award for 2015” »
As I’ve stated for years, the bankruptcy of Energy Future Holdings has been inevitable. It was coming ever since the bottom dropped out of the natural gas market due to innovations in fracking. And finally, it looks like we can finally see how the Texas electricity market might look once the inevitable finally happens and we survey the surviving landscape. Continue reading “Energy Future Holdings to Sell ONCOR” »
For years I’ve been writing about the folly of the PUC in pushing for huge changes in the Texas electricity model out of fear of running out of energy. The combination of the Texas population boom in recent years and the lack of investment in new energy generation plants has led to plenty of fear mongering and poor decision making, specifically the raising of the market cap. There have also been rumblings about overhauling the Texas electric market into a capacity market, which would be about the worst idea in the history of bad ideas.
However, throughout all of this noise, many people (including myself) have been attempting to stress patience and caution with any major changes to the Texas electric marketplace. And more or less, we’ve been proven correct. The “shortage” of generation has proven to me mostly mythical, with many studies showing that Texas has more than enough energy to meet the market reserve for coming years. There’s many reasons for this, but one of the mostly often ignored ones has been the improvements made in technology. We may be be growing as a state, but every year energy conversion technology gets better and better, and as a result people are actually using LESS energy, or using it much more efficiently, than in years past.
A perfect example of advances in technology would be the new Tesla battery that was announced recently. Sure, it’s a home battery, but what if we’re talking about these batteries on a larger scale? Batteries that efficient could solve much of the problems we have with wind power in Texas…namely that it blows when we don’t need it (the winter) and not when we desperately need it (the summer). Batteries this efficient could be a step in long term storage of solar energy to be used when we desperately need it in Texas. Granted, Oncor is slow to move on these developments, but the technology itself proves that we don’t need to recklessly change an energy market that WORKS, saves people money, and isn’t really in any immediate danger of not being able to keep the lights on for Texans.
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:
In a recent article in the Dallas Morning News, Mitchell Schnurman does an outstanding job of highlighting several of the existing challenges with navigating the Texas electricity market. As someone who has operated a website for electricity in Texas for five years that prioritizes consumer advocacy, I’ve long been beating the drum that the best way to maximize customer savings is through customer education. Unfortunately, it is shocking just how many people really don’t understand how our electricity market works. This is an article that really helps drive home that necessity.
The Texas electricity market can be confusing, and things like minimum usage fees or the differences between fixed and variable plans can be easily overlooked or ignored by customers shopping for different plans available in the market. That is until their bills hit their mailboxes. Schnurman is correct, many of the fees that customers will be tagged with are hidden in paragraphs of legalese and contract fine print and can be difficult to identify if someone isn’t well informed on exactly what to look for when comparing electricity plans.
For example, I work in this space. I know that when I’m shopping for an electricity plan, I need to look first at the plan’s kWh rate, as well as the length of the contract term (I don’t shop for variable plans). Then I need to check the contract cancellation penalty (just in case I decide to leave). Next on the list is the minimum usage charge, both how much that charge is and the electricity thresholds where that charge activates. Next I check the EFLs (electricity facts labels) to see if the electricity company has any other listed items for which they can charge, as well as the plan’s Terms of Service. After that, I check out company reviews from previous customers and see if anything stands out, such as poor customer service or a company with lots of complaints for not mailing out bills consistently…anything that might be a red flag. Finally, I would see if there are any benefits, such as sign-up bonuses or rewards programs that might sweeten the deal.
That’s a lot of steps for shopping for an electricity plan, and I’m certain that a majority of folks shopping for electricity do not go through as rigorous a research protocol as myself. But they should. It’s just like buying a car, the customers that come in the most informed have a better chance of walking away with a much better deal on an automobile. Which is what makes some of the comments by Kenneth Anderson frustrating in the DMN article.
We’re almost 15 years into deregulation in Texas, and many people still don’t know the difference between the TDPS (companies who are responsible for maintaining the poles and power lines) and REPs (the electricity companies who bill you each month). And while the PUC has a point in talking about not wanting to do anything (such as an apples to apples plan to allow easier electricity comparison) to deter the competition of the market, there are certainly things they can be doing to increasing the knowledge base of Texas shoppers. For example, they could change the rules for how plans are presented, highlighting and forcing companies to put the information that most directly impacts a monthly bill front and center when trying to sell their plans, instead of burying it pages into an EFL or the Terms of Service, specifically Minimum Usage charges and thresholds. Many electricity companies in the past have billed customers based on the historical usage of their addresses, as opposed to their actual usage. Having that information front and center for customers to look up to understand an address’s past usage and how it relates to computing a minimum usage charge would be helpful as well.
The point is, that there are a number of ways to make this process easier to understand for customers and better equip them for taking advantage of everything the Texas electricity market offers. And this can all be done without endangering the competition that makes this market greater. In fact, in my opinion, it is the deep pockets of electricity companies and their substantial lobbying budgets that prevent many changes, not the fear of curbing competition between providers. But regardless of the cause, the best solution is for Texas consumers to educate themselves and find the best deals.
Green Mountain Energy has nabbed the top score in the J.D. Power & Associates annual customer satisfaction survey for Texas electricity! Congratulations Green Mountain! This is the first time in 4 years a company has beat out Champion Energy Services for the top spot in the survey.
Additionally, the survey also shows that customer satisfaction for Texas electricity has increased dramatically over last year as well. From the article:
Despite an extremely severe winter and correspondingly high electricity bills, satisfaction with retail electric providers has improved dramatically from 2013, driven in part by improved communications, according to the J.D. Power 2014 Retail Electric Provider Residential Customer Satisfaction Study released today.
Overall satisfaction increased 24 points from a score of 682 to 706 from 2013 to 2014. The survey also highlights the increase in the quality of communication between customers and their electricity companies based upon the customer recall of communication. This is great news, as it illustrates that electricity customers are doing a better job of reaching out to their customers in this digital age.
Green Mountain Energy scored a 762, followed by Champion Energy at 759, Cirro Energy at 736, and StarTex Power at 735. Bounce Energy rounded out the top 5 with a score of 730.
I’ll be back later with an article examining some more of the key findings in the survey and what it represents to Texas electricity customers.
Critical Peak Rebate programs are likely to become a new hot trend in the world of Texas electricity. So what are critical peak rebate programs, and what do they mean to you? Lets take a look. Continue reading “Critical Peak Rebate Programs. What Are They?” »
Recently Reliant Energy announced a new electricity plan for Texans, the Reliant Predictable 12 Plan. As the Houston Chronicle outlined, the plan calls for customers to sign a one-year electricity contract at a flat, monthly rate, regardless of electricity usage. This kind of plan is normal in other industries, specifically cell phone service providers, but it is the first of its kind in the Texas electricity space. I’m no stranger to questioning some of Reliant’s past electricity plans, so I figured it was worth the time to take a closer look at this new “unlimited plan.”
On the surface, the plan is pretty straightforward. Customers will pay a flat fee to Reliant every month to receive unlimited electricity service. So whether they use five or five thousand kWh in a month, their bill will be the same. The appeal (or the demographic Reliant claims to be appealing to) might be older folks on a fixed income, or perhaps younger college graduates who have to make very careful budgeting plans each month. Customers visit Reliant’s website, input their address, and select the Reliant Predictable 12 Plan. They will be then be given a monthly estimate, presumably based upon the historical usage of the building in question, and possibly some other factors. Easy enough, right?
I’ll caveat this portion by saying two things: 1) The price given by Reliant when I input my address is very likely just an estimate of my monthly rate 2.) It’s impossible for me to know what anyone else’s estimates would be without putting in their addresses. That being said, what I can certainly do is analyze that plan with my own address. I live in a two-thousand square foot town-home, fairly new construction, and with a 2 year old A/C unit that is on the lower end of energy efficiency. Here were my results:
Your Predictable 12 amount is $150.00 per month.
|Average Monthly Use||5000 kWh||4000 kWh||3000 kWh||2000 kWh||1000 kWh||500 kWh|
|Average Price Per kWh||0.03||0.04||0.05||0.08||0.15||0.30|
Now, lets explain what that means. The math is simple, just multiply the kWh by the Average price to get your monthly average. The first thing that should jump off the page is that the 1000 kWh plan is LITERALLY the exact same price per month as the 500 kWh user. Use 500 or 1000 kWh? Who cares, pay Reliant $150. In fact, if you stretch the math onward, you’ll see that 4 of the 6 possible rates per usage come out to…exactly $150. The other two come out at $160. So basically, Reliant is going to make sure they are making $150 a month on these customers, whether they’re living in a 1 bedroom studio the size of a broom closet or a 5,000 acre compound with a private zoo.
I suppose this should immediately disabuse anyone of the notion that this kind of plan makes sense for a budget conscious retiree or recent college graduate. The .3 rate they quote for someone using 500 kWh is more than three times the cheapest plan available on Power To Choose, and double the most expensive fixed rate plan in the 500 kWh range. In fact, it’s more than twice as expensive as all but one of the five Reliant plans listed on Power To Choose. Personally, I don’t think it’s very budget friendly to charge double or triple rates just so you know exactly what your monthly bill will be, but that’s just me.
And it gets worse. Again, I can only compare this bill to my own historic electricity usage but I pulled my bills to make a comparison. Thanks to Reliant’s easy math, my yearly bill on their plan would be $1800. But looking at my past 12 bills, I can immediately tell this is a bad proposition. Over the past 12 months, I had exactly one bill that was higher than $150. My bill for last July clocked in at $157. So one bill, in the hottest month of the year, topped the $150 Reliant would look to charge me every month. Of course, I also had 7 bills less than $100, including 5 bills under $60. The total cost of my last 12 months of electricity was $1148.45. That’s $651.55, or 36% less expensive than Reliant’s Predictable 12 Plan. That seems like a pretty expensive premium to pay just to know exactly what your electricity bill will be each month. Anyone who can afford that probably isn’t worried about budgeting their monthly bills in the first place because they are affluent, and the irony is they can still get a better deal simply by doing nothing.
The price tag alone isn’t the only thing to consider. As we’ve demonstrated above, despite being tagged as a “budget friendly” plan, this isn’t a plan that makes sense for anyone who is financially concerned about their budget. On the lower end of the spectrum, the plan is extremely expensive.
There are also a couple energy efficiency points. First off, it appears that Reliant is estimating the monthly rate at least in part on past usage. But what happens if someone were to spend money outfitting their home with new energy efficiency appliances? Any possible energy savings or improvements would be lost on their bill simply because the plan doesn’t take into account actual usage. And in this day and age we’re making improvements on the energy efficiency of home appliances and electronics by leaps and bounds. But none of that would matter to any customer on this electricity plan.
Another energy efficiency point to consider is responsible conservation. This plan doesn’t exactly encourage customers to be on their best behavior. It doesn’t really matter if they would leave their electricity on all hours or run their A/C at 65 degrees in the middle of August…because no matter what the bill is going to be the same. So in that regard if someone is looking to raise a dozen penguins in their home year round, well, this is the electricity choice for you! That’s hardly a positive considering the state of Texas is facing an uphill battle to build new electricity generation plants even as our population continues to boom. Of course, Reliant likely doesn’t care about that since their parent company, NRG, currently owns a huge percentage of Texas’s electricity generation and can only make more money from any electricity shortages.
I think it’s safe to say that Reliant Energy’s Predictable 12 Plan probably isn’t the best option for anyone even remotely concerned with their monthly electricity bills. For all but the largest users of electricity, the rates are extremely high. Anyone who can afford $1800 a year on electricity service probably doesn’t have to concern themselves much with their monthly utilities budget. However, for a small niche of customers wealthy enough to want to build snowmen in their living room year round this plan might make good sense. But an average customer like myself can save more than $600 a year just by paying for the electricity I actually use.