There are no free toaster ovens, but there are gift cards, saplings and cash back offers. In Texas, these overtures are not to lure consumers to banks or credit cards; they are enticements for people to think twice about their REP, or retail electricity provider.
The Lone Star State has had a competitive electric retail market for about a decade, yet the offerings, besides variations in price and contract length, are limited. Customers have seen prices decrease since 2002 by an average of 13 percent for fixed rates and 17.5 percent for variable rates (not adjusted for inflation).
However, it is early days indeed when it comes to innovation in product offerings for consumers, despite being nearly a decade in. The Public Utility Commission of Texas tries to keep the average person abreast of the changes -- and opportunities -- in the shifting market through a variety of campaigns, including the “Power to Choose” website, which is a clearinghouse for REP plans. As of January 2010, more than half of the residential customers in competitive markets had chosen a non-incumbent provider. Although Texas continues to be one of the most dynamic markets in the U.S., retailers have not even begun to scratch the surface of creativity when it comes to luring customers.
Smart meters will provide new opportunities for REPs to offer additional plans and services. Still, variety and innovation will likely always take a backseat to price. Currently most residents can pick from more than 200 rate packages, based on terms of service, up to 100 percent renewable energy and fixed or variable rates. To get a feel for what it's like, this reporter picked a few zip codes (Prosper and Garland, TX seemed to have some nice options on the market), then picked some houses (nice ones, with pools) and got cracking on finding out what I could get at different suburban addresses in terms of service.
The Power to Choose website brings up the basics of each package, including term of service and average price per kilowatt hour, usually based on 1,000 kWh per month. The lowest rates start around $0.05 for month-to-month plans from about half a dozen providers, but closer inspection reveals that unless you’re using closer to 2,000 kWh per month, it’s going to run closer to $0.08. I don't know exactly how much electricity my Dallas-esque house would use, but probably more than average, as I'm planning on making the most out of my new pool when the weather heats up.
Once you get into annual contracts with a fixed rate or 100 percent renewables, the price starts to climb towards $0.11. There are certainly savings available, especially if you’re unknowingly paying upwards of $0.14 with an incumbent, but the PUC’s website only gives the basics. For nitty-gritty plan details, you have to dig into each company’s website or pick up the phone. Like many people, I'd prefer to not spend my day on the phone with utilities, so the more information I could get online, the more apt I'd probably be to use that company. The more details I can get on the webpage versus opening up text-heavy PDF files, even better.
It can get time-consuming, since many plans look similar at face value. Even so, it’s a big step up from other competitive markets, like New York, where plowing through different options is downright painful (trust this Brooklynite), as many providers require you to call to get more information. So hats off to the Texas PUC for at least consolidating basic pricing information into one place.
Beyond price, there are the add-ons, such as a tree planted for every 1,000 kWh used, 3 percent cash back or gift cards for signing up. Even more subjective than whether you like cash now or cash back is the subject of customer service. “How easy or difficult is it to get a clear answer?” asked Terry Hadley, Spokesman for Texas’ PUC. “We suggest customers take note of that.” The PUC is certainly taking note of it. Besides plan options, there are charts that show the percentage of complaints that each REP receives monthly relative to its customer base. The chart is tough to garner a lot of information from, as it only gives a 1 to 5 rating of the volume of complaints in relation to the size of the utility. But the same utilities seem to sit at the top and bottom month after month, which gives a sense of which ones you might want to call first.
In addition to a fair price and not-so-terrible customer service, there’s not a lot out there. If you choose Reliant Energy and have a smart meter, you can get a time-of-use pricing, but it’s not one of the choices on the PUC website, and you have to call to find out how much it costs (oddly enough, peak summer rates at about $0.123 are only 2 cents more than the off-peak rate). I was careful to be slightly vague about the plan I was looking for -- since really, what sort of average person uses the phrase 'dynamic pricing'? -- but the female customer service representative was ready to assist me and easily pulled up the pricing request. Hadley said a few others also had TOU rates, but TXU’s plan only brought you to a dead link and no others were listed directly on the PUC website, or were easy to find.
Smart meters also allow for prepaid service, which was “too unwieldy” with traditional meters, according to Hadley. There were limited options for prepaid plans prominently displayed on the PUC website when searching under a Houston area zip code. If prepaid is gaining traction, I couldn’t find many options in multiple visits to the Power to Choose website.
The reality is that even in the most progressive markets, there is little value added besides price options when it comes to the competitive structure. TXU’s website had options to enroll in programs for a smart thermostat and other energy efficiency programs, but far too many websites just rolled out plans that were nearly indistinguishable from those offered by other providers. For REPs that can streamline their customer service and offer true variation from the pack, whether it’s energy efficiency programs or rebates on home area technologies, the world (or at least the Texas electricity market) will be their oyster.