I’ve been intending to do a Provider Spotlight section for Texas electricity for awhile, but this weekend I saw something that inspired me to start writing. My intention for these provider spotlight segments is to break down individual electricity providers in more detail so people can learn about the individual companies offering them electricity service in Texas. This could include anything from the kind of plans they offer, as well as how their rates stack up, or the details of their rewards and promotions.
It was that last part that prompted me to write this provider update for TXU Energy, but we’ll get to that in a minute. TXU Energy is one of the major incumbent electricity companies operating in Texas, along with Reliant Energy. They formerly were the exclusive electricity provider for the Onocor footprint of Texas. With over 2 million residential and commercial electricity customers, they are easily the largest electricity provider in the state of Texas. So generally speaking, they’re one of the most recognizable and trusted electric providers in the state.
Next lets take a look at their rates, which is quite possibly the most important aspect an shopper looks for when determining their electricity plan. And compared to the rest of the electricity market, TXU’s prices are high. In fact, they’re some of the highest in the market regardless of fixed, month to month, or green electricity plans. They’re consistently about 2-2.5 cents per kWh (kilowatt per hour). That’s extremely high. To put it in Gas Terms, that’s like paying an extra 50 cents at the pump right now.
The next thing I’d like to examine is TXU’s recent promotion for Centerpoint customers, which was the inspiration for my typing this Provider Spotlight. This weekend, I saw this promotion that TXU has been advertising, and I spent some time exploring a little further because on the surface it seemed impossible. TXU is currently advertising $500 in savings that comes with their exclusive Energy Savings Package. At first I thought this meant a gift card or bill credits, but reading closer, this is not entirely the case. And because I was confused, I wanted to take the time to flesh out this promotion for other folks who might have had the same knee jerk reaction as myself. So it’s not strictly speaking $500 dollars in rebates. However, it is $200 in rebates, which is certainly as much as I can remember seeing in any single promotion. The rest comes in the form of a $25 credit to their new Brighten Online Energy store, which brings the total to $225. The promotion also offers a free programmable Brighten iThermostat and a professional installation (valued at $400). Customers also get a 10% discount on their electricity rates for summer months. All of this if shoppers sign up for TXU Energy Summer Savings 24 month plan.
On the surface, that is a lot of high ticket items to sign up for a 24 month plan, and it looks like quite a deal. However, dig a little deeper and there are certainly some catches to their offer that I think consumers should be aware of before committing to TXU. The $200 gift card is a great deal, there’s no question. That is a fantastic reward. The other large bulk of item for savings is the iThermostat with an installation, which they’ve valued at $400, which is is web programmable. If you’re a homeowner (to which this deal applies) and this kind of thermostat and installation appeals to you, then I’d say it’s a great deal, particularly for the web savvy. Go for it. However, this kind of thermostat and installation promotion might not appeal to everyone. The last item of the promotion, the 10% savings on electricity in summer months should definitely be viewed with skepticism. This plan starts off at 12.9 cents per kWh. The cheapest plan on the market for 24 months is 8.9 cents per kWh. That makes it 45% higher than the cheapest plan on the market for the same time period. Most competitive plans are in the 9 cent range, which at nearly 13 cents per kWh, TXU’s plan is still 3.5 cents per kWh higher than the market average, or 33%. So even if TXU offers you a 10% savings during the summer months, that’s still more than 20% higher than the market rates for the same length plan elsewhere. So in reality, it’s not savings at all. Customers are still drastically overpaying for this plan, even after the discount, so beware.
All in all, TXU is a known provider in the Texas electricity marketplace. They have a long reputation working for them, and they have the trust and recognition of Texans. However, their electricity plans aren’t in any way competitively priced. However, they do compensate on that to some degree with generous promotions and rewards for customers who select TXU electricity plans.
Hopefully this write-up will help shoppers understand a little bit more about TXU as a company, as well as what benefits and drawbacks they represent to Texans shopping for electricity.