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 saving, penny pinching, household chores (here, here, 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.
Direct 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.
1 Data from “Electricity Facts label (EFL) Direct Energy Free Power Weekends 12 – Indexed Oncor Electric Delivery Service Area 8/1/2017”
This is incorrect– at least NOW in Austin, TX.
Go to Austin Energy…
https://austinenergy.com/ae/rates/residential-rates/residential-electric-rates-and-line-items
You’ll see that 1000 kWh in Austin costs about $103 in the Summer AND in the Winter… It is about $1236/year… That is $200 more expensive than Direct Energy.
I’m trying to do the calculations as well- because I want to change companies.
Prices have increased since this was written 11 months ago, but the key message is still correct: Direct Energy’s July’18 24-month Free Weekends plan in Oncor costs 11.5+ ¢/kWh, which is at least a 20% premium vs. numerous competitors at 9.5 ¢/kWh or less.
Even though Austin Energy customers can’t choose their electric provider, most still pay less than this Direct Energy plan.
Hey Fred,
I remembered last year when you emailed me warning about doing free nights plan. I want to report back now that I’m 10 months into my plan with Infuse Energy. I managed to use 72% of my electricity at night (I run my AC to 65-70 deg), which carries out the coolness throughout the day, even in the summer months (sometimes I jack up the AC from 4pm so that I can make it to the 9pm mark). Looking back at all my bills, I managed to have average $60 monthly for my electric bills, with average 4 to 6 cents per kWh. In summary, free nights can be very useful for Texas homes if done right.
Thanks for the follow-up, JT. While most customers overpay on a Free Nights plan, it is possible to make them work if you have a _very_ night-centric usage profile. Glad to hear you made it work. -Fred