The How, Why & What of Choosing a Texas Electricity Plan
An Energy Expert Explains How to Shop Electricity
Direct Energy was one of the first Texas retail electricity providers to offer a variety of ‘service plans’ vs. a straight meter read. This meant more for what Texans could get out of their energy company.
We sat down with Cullen Hay, General Manager of U.S. Energy for Direct Energy, to find out what to consider – and what to watch out for – when it comes to choosing an energy provider in Texas.
Cullen Hay, General Manager of U.S. Energy for Direct Energy
How long has Direct Energy been in Texas?
We started here in 2002, after the Texas retail electricity market opened, and we found a very competitive market. Most areas don’t have a “fallback” option (city-provided service), so their choice of a provider is important, both for their comfort and their budget.
If it was so competitive, how did you differentiate yourselves?
Really, we just connected the dots from what the Telecomm industry was doing in a deregulated market. At first, the telecom industry thought they were just selling minutes, but they figured out that, to create customer loyalty, they had to offer more. They got there pretty quickly, but electricity providers… not so much. So we were one of the first to venture into the home energy services world, offering discount plans and home warranties (protection against faulty devices, like HVAC). Now we have plans that include solar options, free weekends, smart tech and more.
Can you give an example?
Sure. One of our most popular tools is Direct Your Energy. Other providers offer only a usage-based option, but Direct Your Energy takes it deeper. With this online dashboard, customers can get a day-by-day breakdown of how appliances are performing not just in kilowatt hours but in dollars and cents. If you see a spike in usage, you might have an issue. Direct Your Energy gives a high-level review of your recent energy performance so you can make informed decisions about your energy usage.
There are so many options out there, some not so clear about the details. How can someone identify hidden fees or gimmicks?
The first step in making the right electricity provider choice for your home is to understand who currently provides your energy and how much energy your household uses in a typical year. Once you know your current contract details and understand your usage levels, you can begin to research different retail energy providers and the rate plans they offer for your area.
Look for an Electricity Facts Label (EFL) and Terms of Service. They have to clearly state what’s included, so study it. Also, ask friends and neighbors about their provider. Or just call the provider directly and ask them to explain. The last thing this industry should want is for a customer to sign up for something they don’t need.
Several factors you should consider when looking for an energy provider are the length of the contract, the rate per kWh you pay during the contract, the availability of value added services such as protection plans for the home, wires, pipes, or any available technology packages like smart thermostats or leakage protection devices. Make sure to ok for the presence of any fees associated with the contract you might be obligated to pay beyond the energy charges. There is not one perfect plan, but with a bit of research you can find the perfect plan for your needs.
So, what are some tips for picking the right plan?
It helps to think about your lifestyle. If you’re monthly spending may be tight, go for a low price plan, or even a fixed rate so you know what to expect every month.
There are some plans that offer “free weekends.” If the whole family is home on weekends, as opposed to away at work or school, you’re going to use more energy. But with this plan you won’t have to pay for it. It’s also helping to shape behavior, like when to do laundry. That’s a high-energy activity, so why not save it for Saturday or Sunday when energy is free?
We have an option called Direct Your Plan. It helps customers ask some questions about how they use energy so they can create the best plan for their home and the way they live.
What about all the “smart home” products?
We’re seeing a lot of smart thermostats. They “learn” your schedule – when you’re home and when you’re not — and adjust the temperature to save you money. LED bulbs are great, too. They can last up to 10 times longer than a compact fluorescent. Smart refrigerators let you view the inside of your fridge from your smart phone to see what you might need from the grocery store.
Direct Energy is working on a “Whole Home” concept that packages electricity, service/insurance plans, and retail sources (like an HVAC company or plumber) into one offer. We think that’s where the smart value really is.
Your company is very active on social media.
We have a whole team focused on that – experienced people who have taken that landscape and just blown it up for us. An increased social presence and dedicated social care team have been great avenues to educate customers on how to use less of what we sell.
Direct Energy has several community-focused initiatives. Can you tell us about a couple of them?
I’d love to. Giving back is a core belief of the company. It’s what makes us different. Direct Energy is a proud partner of the Children’s Miracle Network Hospitals. In December 2015, Direct Energy announced a commitment of $5 million to Texas Children’s Hospital, the Children’s Miracle Network Hospital in Houston, to help expand Texas Children’s Heart Center. This commitment is the largest corporate gift ever made to a Texas Children’s campaign priority.
Another way we give back is through our Neighbor-to-Neighbor program. Customers can check a box on their bill to have a portion of their payment go to help lower-income customers pay for electricity.
My favorite right now is Give Brighter. When you choose this plan, we work with MPOWERD™ to provide a Luci® solar-powered light to an area of the world where electricity isn’t readily available. We’ve sent more than 35,000 so far, and we’re hoping to turn that into hundreds of thousands.
Figuring out which plans are available to you, what – if any – hidden fees there might be, and how a particular plan will fit within your lifestyle and budget is much simpler when you know a few basics:
- Understand your current plan and how it’s working for you.
- Check the provider’s Electricity Facts Label and Terms of Service.
- Consider the length of the contract and the rate per kilowatt hour.
Beyond that, look for value-added services that could provide both short- and long-term benefits for your home and family. These could include smart technologies, home warranty plans, or an active social media presence that allows you to easily interact with and learn from your provider.
Most of all, remember that – in Texas’ open market – the customer is king (or queen). Shop around for an energy provider offering the best overall value for your particular needs.
Direct Energy is committed to offering convenient, cost-saving plans to its customers across Texas. Whether it be in the area of transparency, smart technology or comprehensive home solutions, Direct Energy continues to generate plans, procedures and products that help Texans use less of what they sell.