Direct Energy Free Power 100 Review

“Free Power 100” is Direct Energy’s latest heavily-advertised “free weekends” rehash. It’s identical to last summer’s “Free Power Weekends 12” plan, except for a bundled $100 Visa gift card and 0.3-0.4 ¢/kWh higher energy rates. As usual, a high weekday energy rate means that overall it costs upwards of 20% more than many competitors. The table below compares the options for customers in DFW, which is the best case. Houston-area premiums are higher.

Direct Energy “Free Power 100” (DFW/Oncor area)
Avg monthly usage (kWh)
500 1000 2000
Average rate (¢/kWh) 1 10.1 9.3 8.8
12-month cost (after $100 gift card)  $506  $1,016  $2,012
 – Lowest-cost fixed-rate competitor 2  $369  $755  $1,670
 = Direct Energy cost premium +$137  +$261  +$342
+37% +35% +20%

laundryAs a reminder, Direct Energy’s “average rate” claim already assumes 31% of your usage occurs within the “free” period. So unless your electricity usage is extremely weekend-centric, don’t expect you’ll make up the difference. See the previous review for more on why “free weekends” plans generally aren’t a great deal.

To find your true lowest cost electric plan options, click the link below and enter your monthly usages into our RateGrinder tool. There’s no simpler way to save the most on your electric bill!

 

Find Your Best Plan »

 

1 Data from “Electricity Facts label (EFL) Direct Energy Free Power 100 – Indexed Oncor Electric Delivery Service Area 11/7/2017”
2 Competitor data per RateGrinder analysis on 11/15/2017. See Today’s Best Rates for the latest survey of offerings.

Review: iChoosr “Texas Power Switch”

11/1/2017 update: This plan is no longer available, so we’ve removed it from the RateGrinder database.

 

Auction gavelToday iChoosr announced the results of their 9/28/17 “Texas Power Switch” electricity auction. For those not familiar, iChoosr is a UK-based electricity aggregator that bundles customers to negotiate volume discounts from retailers. Their latest auction targeted customers in the Oncor and TNMP service areas.

Per their link, Champion Energy won iChoosr’s auction with a low bid of $5.25/month + 3.1 ¢/kWh, plus TDU-specific pass-through charges. Is that a good price? Compared to the average offerings today, it’s not bad. Is it the lowest available price? That depends.

Your lowest-cost electric plan depends on your particular month-to-month electricity usage. For users who average a relatively large ~2500 kWh/month or more annually, Champion’s plan may beat the competitors listed publicly on PowerToChoose.org. But for Oncor-area customers averaging only 500, 1000, or 2000 kWh/month, other plans may save them $186, $157, or $92 per year, respectively.

To Champion’s credit, this plan’s rate structure is fairly gimmick-free. But to its detriment, gimmickry is what enables informed consumers — with the help of a tool like TPG’s RateGrinder  to pay even lower rates. In today’s deregulated electricity market, broad offerings rarely yield the best price for everyone.

iChoosr won’t provide complete offer details or allow sign-ups for Champion’s plan until October 9. Until then and while the plan is offered, TexasPowerGuide.com will include this plan in our RateGrinder tool for reference. To find out instantly if iChoosr or another plan is the best for you, click the link below.

 

Find Your Best Plan »

Review: Direct Energy Free Power Weekends plan

Direct Energy set their sights on homemakers this summer with a slew of sponsored blog posts with not-so-subtle plugs for their “Free Power Weekends” plan. They weave claims of big weekend savings with tips for energy savingpenny pinching, household chores (herehere, here, and here) and even a recipe for salmon pasta. Direct Energy’s marketing department is clearly focused on their job. But our job is to do the math and set the record straight.

Free cheeese in mousetrapDirect Energy touts more hours of “free” weekend electricity than their competitors. But as usual, the weekends are “free” only because the weekday rates are inflated. So how inflated are they, and can a person realistically come out ahead?

For the answers, we look to Direct Energy’s own math on their Electricity Facts Label (EFL)1. Then we compare it to the cheapest alternatives currently posted on PowerToChoose.org.

Direct Energy “Free Power Weekends 12” (DFW/Oncor area)
Avg monthly usage (kWh)
500 1000 2000
Average rate (¢/kWh) 9.6 8.7 8.3
12-month cost  $576  $1,044  $1,992
 – Lowest-cost fixed-rate competitor  $357  $695  $1,656
 = Direct Energy cost premium  $219  $349  $336
+61% +50% +20%

Per the table above, the Direct Energy plan costs $349/year extra for a Dallas homeowner using an average of 1000 kWh/month. For Houstonians, the premiums are higher. Direct Energy assumes 31% of your total usage occurs on the “free” weekends, which they’ve already factored into the average rates above. The weekday rate including TDU charges is upwards of 11.4 ¢/kWh.

[The generic comparison above uses Direct Energy’s assumptions. If you want to plug in your own daily usage and see the results, see our “Indexed and Time-of-Use Plans Roundup” and associated calculator tool.]

As the third largest Retail Energy Provider in Texas, Direct Energy knows how much electricity people use and when. They wouldn’t invent and promote a gimmick like free weekends if it lost them money. Many consumers perceive the word “free” as an opportunity to beat the system. But they’re not doing the math.

To beat the cheapest fixed-rate plan, a household averaging 1000 kWh/month would have to defer over 55% of their usage to the weekend. This is very unlikely if air conditioning is part of your daily Texas life. It’s true that many of us necessarily do a lot of cooking and cleaning on the weekend. But those electrical loads don’t compare to an always-running HVAC, fridge, water heater, and /or pool filter.

If you’re already on this plan, check the mandatory “average price you paid” disclosure on your past electric bills. If you consistently pay a rate below 7.5 ¢/kWh, then feel free to share the details of your weekend-centric activities in the comments below. For the rest of you, use TPG’s RateGrinder tool to easily find the cheapest plan for your home for ALL days. Because salmon pasta tastes better when it doesn’t cost you an extra $300.

 

Find Your Best Plan »

 

1 Data from “Electricity Facts label (EFL) Direct Energy Free Power Weekends 12 – Indexed Oncor Electric Delivery Service Area 8/1/2017”

Review: TXU Free Nights & Solar Days plan

TXU’s “Free Nights & Solar Days 18” is the most expensive Time-of-Use electricity plan we currently track, costing the average homeowner nearly double the best fixed-rate plan.

Lately you can’t watch TV for an hour without seeing a commercial for this plan. It touts “free” electricity from 9 p.m. until 6 a..m., with the rest as renewable solar and wind. Together, that’s the trifecta of red flags in our “How to Shop for Electricity in Texas” article. But let’s start with the math…

For simplicity, we took TXU’s own EFL usage and average price claims at face value. Then we compared them to the cheapest 18-month, fixed-rate, 100%-renewable plans on PowerToChoose.org using our RateGrinder tool, including typical month-to-month usage variations:

TXU Free Nights & Solar Days (DFW/Oncor area)
Avg monthly usage (kWh)
500 1000 2000
Average rate (¢/kWh) 15.2 13.7 12.9
18-month cost  $1,368  $2,466  $4,644
 – Lowest-cost fixed-rate competitor  $707  $1,318  $2,544
 = TXU cost premium  $661  $1,148  $2,100
+93% +87% +83%

Like most “free” weekends/nights plans, TXU’s Free Nights & Solar Days jacks up the base rate more than enough to compensate for the free periods. In this case, it’s upwards of 18.5 ¢/kWh after TDU charges. For comparison, the best alternatives above averaged <7.7 ¢/kWh annually. So a house that averages 1000 kWh/month usage would pay an extra $1,148 over 18 months. If you try to change your mind, you’ll encounter a $295 cancellation fee, the highest of any 18-month plan we currently track.

Can savvy consumers make up the difference by deferring their electricity usage until the free periods? Not likely. As the largest electricity retailer in Texas, TXU knows how much their customers use from 9 p.m. to 6 a.m. Their EFL “average rate” math above already assumes 32.7% is free. Their press release claims “customers on these plans received nearly 40 percent of their energy usage for free”1. But even that extra 7.3% barely dents the 83%+ cost premium.

Think you’re up for deferring YOUR usage enough to come out ahead? It is theoretically possible. Sweltering without air conditioningBut you’ll be plenty hungry sitting in the dark until 9 p.m. to cook canned soup for dinner because you have no fridge or freezer. And without AC your stagnant, algae-filled backyard pool will offer little relief from the Texas heat. Get the picture? Yes, your dishwashing and laundry can be put off until nighttime, but that difference is relatively small. If you really want to do the math on your house’s usage, we’ve posted a tool to help in our “Indexed and Time-of-Use Plans Roundup“.

Finally, TXU has added “Solar Days” to their prior Free Nights offering, via purchases of solar power and solar and wind renewable energy credits (RECs). But as “Green Energy Plans: The Reality” notes, RECs in Texas are sadly too cheap to do much more than boost retailer profits. Perhaps TXU’s “purchases of solar power” include more meaningful Power Purchase Agreements with generators, but that information is lacking. (If so, we welcome TXU to provide details in the comments below.)

Don’t pay the price for marketing gimmicks like Free Nights & Solar Days. To find the lowest cost options for your home, just plug your monthly electricity usages into TPG’s RateGrinder tool. You won’t find a cheaper rate easier anywhere else.

 

Find Your Best Plan »

Review: Reliant First Month Free plan

Broken light bulbReliant’s heavily advertised “First Month Free” electricity plan is more expensive than alternatives from other providers and even Reliant themselves.

For comparison, here’s a table of the annual costs of three options at three different average usages:

Annual Electricity Costs (DFW/Oncor area) *
Avg monthly usage (kWh)
500 1000 2000
Reliant “First Month Free”  $657  $1,067  $2,017
 – Lowest-cost competitor plans  $357  $695  $1,656
 = “First Month Free” cost premium  $300   $372   $361
Reliant “Secure 12” (as FYI)  $506   $889   $1,656

Even after rebating the most expensive [August] bill, the “First Month Free” plan costs Dallas residents hundreds extra per year.  (For Houston residents, all the numbers in the table above increase slightly.) While it’s by no means the most expensive plan we’ve seen, TPG recommends numerous options from other providers over Reliant’s “First Month Free” plan. And if you’re set on Reliant, the “Secure 12” plan is currently their best offering for most cases.

To see all the costs and best options for your home, just plug your monthly electricity usages into TPG’s RateGrinder tool. You won’t find a cheaper rate easier anywhere else.

 

Find Your Best Plan »

 

* Notes: Calculations are based on the plan EFLs posted on Reliant.com and competitor sites as of 7/30/2017, and assume the 2016 average Texas monthly residential load profile from EIA scaled linearly to each target monthly usage.  Annual cost projections exclude taxes and non-recurring fees.

Don’t Let Your Electric Plan Expire

Lighted house

Failing to renew your expired Texas electric plan can cost you hundreds or even thousands of dollars a year.

Many Retail Electricity Providers (REPs) are notorious for raising your rates when your original contract expires. In many cases, their business model counts on you forgetting to renew so they can quietly move you into an expensive month-to-month “default renewal product”. How expensive? So expensive that you generally won’t find the details online or by calling their customer service reps. These rates are so special that they generally only reveal them once, to comply with PUC requirements, somewhere between 60 and 14 days prior to your contract’s expiration. (Note: At 14 days prior, you can switch providers/plans without incurring an early termination fee.)

We need your help to shed light on this problem. If your fixed rate plan is near or past its expiration, please email us the Electricity Facts Label (EFL) of the default renewal product your retailer will apply if you take no other action. We’ll anonymously add it to the chart below to help other Texans understand the significance of never letting your electric plan expire. And to whomever submits the worst plan (as judged by us), we offer two very special prizes: anonymous fame forever and free personal use of RateGrinder for life!

Of course, after sending us your default renewal details, you should then use RateGrinder to find your better options and save. Signing up with a new provider takes as little as 15 minutes. By law, your new provider will completely manage the switch (you don’t need to inform the old provider) and there’s no risk of electricity loss. Don’t let rate creep happen to you.

We welcome your thoughts in the Comments section below.

Recent Default Renewal Electric Plans

TDU Area Retailer Product ¢/kWh @500 ¢/kWh @1000 ¢/kWh @2000 Issue Date
CNTRPT DISCOUNT POWER Default Renewal Plan 12.5 12.5 12.5 6/15/15
CNTRPT PENNYWISE POWER Wise Buy Monthly 14.6 12.0 11.7 6/1/17
ONCOR PENNYWISE POWER Wise Buy Monthly 14.2 11.7 11.4 6/1/17
CNTRPT RELIANT Reliant Clear Flex Plan 12.7 10.1 9.9 12/15/16
CNTRPT RELIANT Reliant Flex plan 12.1 11.0 10.5 12/15/16
CNTRPT RELIANT Reliant Keep Your Cash Nights & Weekends plan 14.4 13.8 13.5 12/15/16

Source: Electricity Facts Labels variously submitted by TPG users

Find Your Best Plan »

Indexed and Time-of-Use Plans Roundup

Electricity plans like Reliant Truly Free Weekends, TXU Free Nights, and Griddy all charge based on when you use electricity, but beyond that they’re very different. We do the math to see which are gimmicks and which deliver the goods.

Risk vs. Reward

When shopping for electricity, most consumers choose plans with a “Fixed” rate over the contract term. Such plans offer predictable bills and relatively simple math. In theory, however, they do not offer the lowest cost.

To offer you a fixed rate for a period of time, retailers must first estimate how much they’ll pay for your electricity. The wholesale price of electricity depends on many variables. These include the price of natural gas, weather changes like heat waves, hurricanes, and wind, and consumers’ daily patterns of electricity use. As a result, electricity pricing can vary a lot: from -260% to over +11,000% of the ~2.6 ¢/kWh average just last year. Facing these uncertainties, retailers add safety margin to their cost estimates so they don’t undercharge customers and go bankrupt. The longer the contract, the more uncertainty and risk, so the more they have to add to your rate.

Houston Electricity Price History

To offer lower rates, some retailers create plans that shift some or all of their pricing risks to you. “Indexed” plans base their pricing on underlying market indices like the monthly price of natural gas. “Time-Of-Use” (TOU) plans generally increase their pricing during late afternoon peak use periods. And some plans do both with rates based on the real-time wholesale price of electricity, which changes every 15 minutes. To the extent they transfer pricing variation risk to the consumer, these plans have the potential to offer lower prices. (They’re also more difficult for consumers to quantify, but Texas Power Guide is here to help with that.)Houston Electricty Prices vs Time of Day

Plan Comparison

To see how they stack up, we pitted 9 indexed and/or Time-of-Use plans from PowerToChoose.org and elsewhere against each other. We ran the numbers using the past twelve months of pricing data matched with the actual usage of two Houston-area homes. Home #1 is a 1-story, 2-occupant house with an average consumption of ~1130 kWh/month — about the Texas state average. Home #2 is a 2-story, 4-occupant house with a pool and average consumption of ~2100 kWh/month. Neither home participated in an indexed or TOU plan during the sampling period, so their owners weren’t shifting their normal consumption behavior. We’ll discuss the practicality of doing so in the results.

For comparison, we also included the current best 3- and 12-month Fixed rate plans per our RateGrinder tool.  While the best plans from one year ago would make a better comparison, those details are hard to come by. Energy prices are slightly higher in 2017 than 2016, which unduly benefits Indexed/TOU plans computed using last year’s pricing.

We did not include plans that PowerToChoose.org categorizes as “Variable”. Unlike Indexed plans tied to a public index, retailers can often change pricing on Variable plans at their sole discretion. Finding details of price histories can also be challenging. As a result, Variable plans don’t meet our threshold for either predictability or transparency.

Per TPG’s philosophy, all our data and calculations are posted here. If you export your home’s usage data from SmartMeterTexas.com, you can paste it into our file to see your own results. We also include historical data on wholesale electricity and natural gas prices to lend insight into the frequency and severity of [usually weather-related] price spikes.

The table below summarizes our results. Time-of-Use plans are in blue. Plans indexed to the monthly price of natural gas are in purple. Plans indexed to real-time (15-minute) electricity pricing are in green.

Results: Indexed and Time-of-Use Plans Comparison
Home #1
(~14 MWh/yr)
Home #2
(~25 MWh/yr)
Retailer / Plan $/year ¢/kWh $/year ¢/kWh
[Best 3-month Fixed rate plan] $876 6.5 $1,580 6.2
[Best 12-month Fixed rate plan] $1,002 7.4 $1,881 7.4
Griddy Zero $1,116 8.2 $1,890 7.4
Volt EP Signature Index Plan $1,113 8.2 $2,016 7.9
Champion Energy Free Time-12 $1,173 8.6 $2,135 8.4
Direct Energy Free Power Weekends 12 $1,287 9.5 $2,323 9.2
Reliant Solar Sell Back $1,363 10.0 $2,501 9.9
Reliant PowerTracker $1,411 10.4 $2,535 10.0
TXU Energy MarketEdge $1,499 11.0 $2,698 10.6
Reliant Truly Free Weekends 24 $1,519 11.2 $2,789 11.0
TXU Free Nights 24 (9 p.m.)
TXU Free Nights & Solar Days 18
$1,861 13.7 $3,368 13.3

Observations

For both homes, a 3-month fixed-rate plan undercut the Indexed/TOU options by at least $230/yr. And for the average Texas home (~ Home #1), a 12-month fixed rate also beat out those options.

For those with higher usage, however, Griddy Energy may be worth a look. New to Texas in April, Griddy’s prepaid daily plan offers the real-time wholesale rate (plus TDU charges) for $9.99/month and 2.9%+30¢/payment. The fees overshadow the wholesale benefit at low or average usages. But above ~2000 kWh/month usage Griddy starts to compete with the better 12-month fixed rates. Griddy also offers the most potential for consumers to shift their consumption for more savings — including occasional negative pricing — with a phone app for real-time pricing, forecasts, and alerts. If you’re willing to assume the risk of pricing disruptions (see first chart, above) in exchange for a lower long-term bill and/or less frequent shopping, Griddy may work for you. That said, Griddy is brand new and TPG hasn’t directly sampled their service, so stay tuned for more. If you have, let us know your experience in the comments.

Beyond that, there’s currently little else in the Houston market worth considering:

Volt EP‘s Signature Index Plan is the other product indexed to the wholesale price of electricity, but on a monthly postpaid basis. With a different fee structure, it is cheaper than Griddy only for lower-than-average usages. Unfortunately, that’s the space where fixed-rate plans outcompete both.

Three “Free Weekends” options from Champion, Direct Energy, and Reliant are nominally Time-of-Use plans, but not in the traditional sense of passing through higher afternoon pricing. Instead, they’re largely marketing tactics to lure customers into higher average rates obscured by trickier math. As such, they are frequently panned on the Internet. Only an extremely weekend-focused consumer might come out ahead of the better fixed-rate options.

The three plans indexed to the NYMEX Natural Gas Futures index also performed poorly, due to their unremarkable pricing.

Finally, TXU‘s identically-priced Free Nights 24 (9 p.m.) and Free Nights & Solar Days 18 plans cripple their usage-shifting potential with a staggering 13+ ¢/kWh average cost, ranking worst in our survey.

Bottom line

For those seeking the lowest cost, a shorter-term fixed-rate product such as those found with our RateGrinder tool is still the best bet. But for risk-tolerant consumers with higher usage or a desire to capture savings by shifting their consumption, Griddy may be a worth a look.

Find Your Best Plan »

 

Article updated 8/6/17 to include TXU’s Free Nights & Solar Days 18 plan, which as of that date has identical pricing terms as the Free Nights 24 (9 p.m.) plan.

Review: TXU Texas Choice 24 plan

10/26/17 update: We received a new version of this offer, similar to that below except for a $100 less up-front Bonus and 0.8 ¢/kWh lower energy costs. See RateGrinder for the costs for your home, and/or these links for the Centerpoint– and Oncor-area details.

——————–

TXU Energy’s “Texas Choice 24” is another expensive electricity plan with a cheap gimmick: Cash back rewards that are hopelessly outgunned by an inflated Energy rate.

This week as I was shopping for my own next provider, I received a TXU mail offer loaded with consumer bait: a $350 bonus, 3% cash back rewards, and $150 to escape my current plan. Potentially tempting, but the offer lacked any mention of pricing. Checking TXU.com, it didn’t list “Texas Choice 24” among the plan options for my area.1  So as a last resort I phoned for details as requested (…and quickly, so as not to miss out on the “limited-time offer”).

The TXU rep first congratulated me on catching the $350 bonus level (normally $250?). Then he divulged the current pricing: $9.95/month plus 9.2 ¢/kWh plus Centerpoint’s pass-through $5.47/month and 3.57 ¢/kWh. For the uninitiated, that’s a lot. But what about all the bonus rewards? Let’s check the math for the typical Texas household scaled to various average usages:

Avg monthly usage (kWh)
 TXU Energy Texas Choice 24 500 1000 2000
Average rate (¢/kWh) 15.9 14.3 13.5
Two-year cost $1,896 $3,434  $6,500
  – Cost of cheapest competitor plan – $796 – $1,660 – $3,698
  – Best-case rebates value – $557 – $603 – $695
= TXU cost premium $543 $1,171  $2,107

With it’s 57%-70% higher costs, TPG does not recommend “Texas Choice 24” for anyone. We will, however, include it in our RateGrinder database and calculator for now as a warning and reminder to others of the importance of doing the math. The fact that you took the time to find and read this review makes you a more diligent shopper than most. Next, click below and we’ll help you find the true lowest rates for your home’s usage.

Find Your Best Plan »

1 Note: We eventually found the plan and it’s EFL on TXU.com by substituting a promo code in the URL.

 

 

Green Energy Plans: The Reality

100% Renewable Power Plans

Form vs. Function

Texans should think twice before buying a “100% renewable” power plan. Despite their green credentials, most do little more than boost retailer profits.

First, some background: Nearly all Texas homes get their electricity from a common grid. At any given moment, that grid is fed by a vast array of both renewable and fossil-fueled generation sources. You can’t physically track or control the path of electrons from a particular source to your house, so in the 1990’s a proxy financial mechanism was created to encourage the development of renewables.

Called Renewable Energy Certificates (or RECs), generators earn one REC for each Megawatt-hour (MWh) of electricity they produce from renewable sources. Utilities and retailers then buy these RECs to comply with legislative mandates or to resell them to customers who want to support clean energy. Each REC gives you claim to the green attributes of 1 MWh of certified generation, such as to offset your consumption from the grid. REC prices vary with supply and demand, so more demand theoretically drives higher prices that support the development of more renewables capacity.

In Texas, however, REC supply far exceeds the demand, so the incentives no longer work as designed. With wholesale prices below $0.50, voluntary RECs provide neither the necessary funding boost [~$8] nor the long-term commitment needed to finance a new wind or solar project.

If you’re considering a 100% renewable plan from PowerToChoose.org or elsewhere, ask yourself why. If it’s only to claim your energy consumption is offset by existing green sources, the cheap RECs bundled with those plans nominally do that. But they obscure and undermine a more impactful goal: the growth of new renewable energy. Cheap RECs don’t motivate new construction, a concept known as “additionality”. At best, their ~$0.50/MWh value adds a little gravy to an existing plant’s balance sheet. (They are, however, a great deal for the Retailer if they charged you a $3/MWh premium for your “green” plan.)

If you want to promote renewable energy growth, skip the “100% renewable” power plan. Existing generators, REC brokers, retailers and others who profit from RECs may assert that every REC is a vote for green energy. But at inflated retail prices with no promise of additionality, your dollars are better spent elsewhere.

Alternatives

So what can you do to support renewables growth? Here are some options:

  1. Give Directly.  Rather than wasting money on RECs, donate those premiums directly to an organization that enables fiscally-challenged renewables projects with minimal overhead. [We’re still researching the credentials of a few options; your inputs are welcome.]
  2. Shift Your Consumption.  Aligning your electricity usage with the times that wind and solar are producing encourages their development, even if it doesn’t currently displace fossil-fueled sources. Wind blows strongest in the evening and night; solar shines during mid-day.  In the gaps are the peak load times when families wake up and return home, which forces more fossil-fueled generation to kick in to meet the demand. Until energy storage systems become common, rescheduling your dishwasher, laundry, AC, pool filter, etc. to minimize the 3:00-6:00 pm peak plays to renewables’ strengths.
  3. Build Your Own.  While not for everyone, a new rooftop or community solar installation is undeniably “additional”. Pricing continues to fall rapidly, and it’s easier than ever to weigh your options. See TXSES for general information and helpful local resources.
  4. Change The Game.  Part of the reason for Texas’s oversupply of RECs is its weak Renewable Portfolio Standard, which was exceeded many years ago. Lobbying for a higher standard could increase mandatory REC demand and take the slack out of the system, although it’s unlikely given contrary legislative trends.
  5. Purchase “Forward” RECs.  Unlike the cheap voluntary RECs bundled with most electric plans, “forward” RECs support specific new projects and truly determine their viability. But they are more expensive, of much longer duration, and difficult for individual consumers to source.
  6. Do Nothing.  Fortunately for Texas renewables, growth doesn’t depend on REC-based subsidies. Falling equipment prices, new transmission lines, and the $18.40/MWh federal Production Tax Credit (PTC) continue to drive aggressive renewables expansion in west Texas, with 20 gigawatts of installed wind capacity and counting. Solar also is beginning to ramp.

More concerned about carbon emissions in general? Then start with investments to reduce your home’s energy usage. LED lighting, insulation, and smart thermostats are common solutions that often pay for themselves.

TPG’s RateGrinder tool can filter Texas power plans by their renewable energy content, but we suggest ignoring this feature. If RateGrinder indicates that the cheapest plan for your home is also 100% renewable, then all the better; that provider is clearly competing for your business.

For more on this topic, see here, here, here and here.

Did we miss any alternatives? Do any Retailers provide forward REC-based products that we’ve overlooked? If so, please share your thoughts in the comments.

Find Your Best Plan »

The Problem with ‘Power To Choose’

Power To Choose and most other online shopping sites don’t let you compare electric plans over your range of monthly usages, which can cost you hundreds of extra dollars each year. Shopping by only a single electricity usage number — even if it’s your home’s average — almost guarantees you’ll overpay.

Consider this real-life example: For a Houston home that consumes an average of 1500 kWh per month annually, PowerToChoose.org recently suggested these 12-month plan options:

Power To Choose default results
Default results from PowerToChoose.org (2/17/2017)

All ten first-page options tout rates of 5.6 ¢/kWh or better in big text. Pick one with a good company “rating” and you’re good, right? WRONG. Choosing any of those ten will actually cost you an average of 7.9 to 9.8 ¢/kWh. Pick the “4.7¢” plan listed first and you’ll pay $699/year more than necessary.

Why? The devil is in the details that Power To Choose doesn’t implement.

Most importantly, your monthly electricity usage varies over the year, typically doubling or more from the spring/fall month lows to the air conditioned summer peaks. Retailers know this. They also know Power To Choose and most other shopping sites only let you search by a single usage number. So retailers design rate profiles that are low at the one usage you can search for but higher everywhere else, which increases your average cost. Per the chart below, the “4.7¢” plan ends up costing a hefty 9.8 ¢/kWh over the year.  (The 4.7 ¢ teaser rate never even applies for our example usage range.)

Teaser plan actual costs
“4.7¢” teaser plan actual costs

It doesn’t help that Power To Choose doesn’t let you search for plans that are centered on a 1,500 kWh/month average usage. (The “Estimated Use:  1,001 – 2,000 kWh” selection in our example actually sorts results by pricing at 1,000 kWh/month.) But even if PTC offered the option to search at any single average usage, retailers could just design more plans with different teaser points to lure in customers. To truly find the best plan, you must compute and compare pricing across each of your 12 months of usage.

With a proper search tool — such as TPG’s RateGrinder calculator — you can easily identify teaser rates and even work them to your advantage. That’s how consumers occasionally get pricing below the wholesale rate. Our 1500 kWh/month example usage perfectly matches the strengths of the true cheapest offering (shown below) while avoiding it’s weaknesses. The result is an average annual rate of only 5.9 ¢/kWh, for a $699/year savings vs. the “4.7¢” option above. Even if usage shifts a little lower or higher than expected, such an inexpensive baseline easily offsets any minor pricing risk.

Best Plan Actual Costs
Best plan actual costs

Although Power To Choose is valuable as the marketplace for most of the best electric plan offerings, don’t rely on it’s inadequate search engine to actually find your plan. Instead, always shop based on your home’s particular month-to-month usage profile. Texas Power Guide’s RateGrinder calculator provides everything you need to easily find and compare the best plans yourself.

Find Your Best Plan »