Direct Energy Featured Plans
All plans listed include a $4.95 monthly base charge. Fixed rate plans also include an Early Termination Fee of $135 that will be applied if the customer cancels the plan contract before it expires.
Direct's two flat rate fixed energy plans discussed below are not complicated by tiers, usage windows, or bill credits. They have just one rate for all usage amounts. The energy charge is the same no matter if the amount used is 500 kWh, 1,000 kWh, or 2,000 kWh. Flat rate plans are usually easier to understand as there's just one price.
Some low usage customers shy away from flat rate plans when they first look at them because it appears that the price penalizes people who use less energy. That's not exactly what's happening. Instead, there's a distortion that happens because the rate, base charges, and TDU charges are all added together and then divided by the usage amount to show the average price per kwh. For that reason, only the plan's energy charge rates are discussed.
Live Brighter 12 This is a straight forward flat-rate contract for 12 months. Compared to other providers, Direct Energy's plans features one of the lowest energy charges around. However, because this plan is a flat rate, the lack of discounts makes it one of the more expensive. But since this plan IS a flat rate, low usage customers don't get penalized for using too little. That makes this plan a reasonably good choice for small apartment dwellers.
Live Brighter 24 With a slightly lower energy charge, this is the 2 year version of the Live Brighter 12. The same features also apply here: while it's not the lowest rate due to the lack of discounts or bill credits, low usage customers will find the flat rate let's them pay a lower monthly bill without being penalized compared to many tiered-rate plans.
Free Power Weekends 24 According to the plan's EFL, the average price calculations are based on a total consumption profile over a 12 month period that assumes 31.0% of consumption occurs during the “Designated Free Period” or weekend. Unfortunately, the plan's energy charge during the week is nearly twice that of other Direct Energy's regular fixed rate plans.
Let's assume that usage is 1500 kWh/month and the Free Power Weekend energy charge is 13.8 per kWh. If we drop 30% of usage amount (500 kWh) as the Free Weekend, the energy charge alone would then look like this: 1000 kWh x $0.138 cents per kWh = $138.00.
But if we assume that the Live Brighter 24 energy charge is 7.5 cents per kWh and also assume same usage of 1500 kWh, the energy charge looks like this: 1500 kWh x $0.075 = $112.50.
So, even with Free Weekend discount, Direct Energy customers are still more likely to pay more on average than they would with the flat rate plan at the same term length. That doesn't mean that Free Weekend customers will pay more. But, it does show that this plan requires customers to know much more about their usage and their usage habits and how to adapt them in order to take advantage of the weekend discount.
Bright Choice A month-to-month variable rate plan, it offers a low rate for the first month. Afterwards, customers will likely see their rate rise and they should expect that to happen. A was already mentioned, these sort of plans should be used for temporary electricity service. Because their rates vary with the change in electricity demand in the ERCOT grid, they shouldn't be seen as a long term energy solution.
Why do flat rate Direct Energy plans show I pay more for using less? Recurring base charges and TDU charges tend to make the lower usage price per kWh appear higher. That's because the lower the usage, the higher the contributing cost per the same base charge amount. Both Direct Energy and the TDU have recurring base charges that are fixed amounts (and all their customers pay them). Therefore, the lower your usage per kWh, the higher percentage of your bill goes to paying for base charges. For example, Direct Energy charges $4.95 as a monthly base charge. Dividing that base charge amount by the usage equals how much that base charge contributes to the total cost of electricity.
- 500kWh usage: $4.95/500 kWh = $0.0099 (or .99 cents per kWh)
- 1000 kWh usage: $4.95/1000 kWh = $0.00495 (or .495 cents per kWh)
The same rule applies to TDU prices. For example, plug in Centerpoint's TDU charges:
($0.040512 per kWh + $5.47 base charge):
For 1,000 kWh
1000 kWh x $0.040512 = $40.512 + $5.47 = $45.982
$45.982/1000 kWh = $0.045982 OR 4.5982 cents per kWh
For 500 kWh
500 kWh x $0.040512 = $20.25+ $5.47 = $25.726
$25.726/500 kWh = $0.05145 OR 5.145 cents per kWh
In both cases, the price per kWh amounts for 500 kWh usage are higher than 1,000 kWh. If we plug these amounts into an energy charge rate of 10 cents per kWh, the average price per kWh looks like this:
For 1,000 kWh: 10 cents per kWh + 0.495 (Direct Energy base charge/kWh) + 4.5982 (TDU) cents per kWh = 15.0932 cents per kWh
For 500 kWh: 10 cents per kWh + 0.99 (Direct Energy base charge/kWh)+ 5.145 (TDU) cents per kWh = 16.135 cents per kWh
Low usage customers must remember that it's the energy charge that matters. On flat rate plans, no matter how all the base charges and TDU charges and sliced and diced, customers who use 500 kWh of electricity will still pay lower monthly bills that those who use 1,000 kWh.
Direct Energy App and Alexa
Direct has also used technological innovation as a way to win customers. In 2014, it partnered with Nest Labs to offer customers savings with the smart thermostat. Now, with smart thermostats no longer a novelty, customers can get an Amazon Echo Dot with a Direct Energy plan to manage their home energy and their Direct Energy account. Customers can interact with Amazon's Alexa digital assistant to log into their Direct Energy MyAccount and check on account balances, due dates, referring friends, and managing energy usage.
Direct Energy also helps customers stay informed via their smart device with its Direct Energy Account Manager app. This app lets customers sign up for service, transfer service, manage payment methods, set up AutoPay, check usage, and pay bills. Reviews at the Apple App store gives the iOS version 4.5 stars. The Google Android version fares worse with only 2 stars.
Direct Energy Bill Pay
Customers can choose a variety of payment options. These include paying online at the Direct energy website through their secure Account Manager portal. There is also payment by mail, overnight mail, in person at a convenient location in your area, or with a Direct Energy care center agent via phone for a $4.95 fee.
Direct Energy offers its customers a reward for paying their bills on time. There four reward programs include movie tickets, gift cards, and even free electricity upon your sixth on-time payment.
Direct Energy EFL and Plan Expiration
When a Texas electricity customer signs up for a plan, what happens when the plan expires is usually the last thing on their mind. All the same, it's an important feature in an energy plan to consider when shopping. To be clear, Texas law states that Texas electricity customers shall be notified (by mail or electronically) at least 30 days or one billing cycle prior to the date of contract expiration, but no more than 60 days or two billing cycles in advance of contract expiration for a residential customer.
According to Direct Energy's terms of service, variable rate plans and fixed rate plans do not have the same rules about notifications.
For variable rate/month-to-month customers, Direct Energy will not notify the customer about rates changes. Direct can change variable rate prices at any time and for any reason. And the rate can change every month.
For fixed rate customers, Direct sends out notices at least 30 days before the end of the initial contract term as spelled out on the Direct Energy EFL. This contract term notice tells customers that if they do not renew their contract or switch by the time the contract ends that they will be automatically switched to Direct's month-to-month variable rate default plan.
In other words, if your new 12 month plan began on January 1, you should expect a contract term notice later that year by December 1 at the latest. If you don't renew with Direct or switch to a different plan or provider, your next bill's rate could jump by 2 or 3 times the amount you were originally paying during the contract period.
So, when you receive your plan's expiration notice, it's time to shop for a new plan.