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What You Need to Know About The TXU Free Pass Plan (Updated 2020)

TXU is the company that popularized Free Nights and other time of day electricity plans in Texas.  Now the electric company that brought you Free Nights and Solar Days has introduced a plan called the TXU Energy Free Pass 12 Plan.

Note: Texas electricity rates change often.  The rates referenced in this review are as of July 2020.  To compare current TXU rates with other electric companies, enter your zip code at the top of this page.

How does the TXU Free Pass Plan work?

The plan is fairly simple.  For each billing period, TXU takes your 7 highest electricity usage days and subtracts those days from your bill.  For those days you are charged a 0¢/kWh energy charge and the typical pass through fees associated with Oncor or your local distribution utility are waived.

What is the KWh charge on the TXU Free Pass plan?

The electricity rate for the days you do pay for is very high.  In the Oncor service area which includes, Dallas and Fort Worth, the energy charge is 15.7¢/kWh.  In addition to that, you will pay the Oncor passthrough fee of 3.577¢/kWh.  This brings the total electricity rate to 19.3¢/kWh for the days you pay for.

If you used exactly the same amount of electricity every day of a 30 day billing cycle, your 7 free days would account for 23.3% of your total electricity usage.

TXU publishes an average electricity rate of 13.9¢/kWh for 1000 kWh of usage in the Oncor delivery area.  To arrive at this number, they assume that 33.1% of your electricity usage occurs during your 7 free days.

electricity rate for TXU Free Pass Plan

Every household is different. Its hard to predict exactly what your final average electricity rate would be.

The table below shows TXU’s published 1000 kWh average electricity rate for each delivery area including the 7 free days.  It also includes the energy charge plus TDU pass through charge for the non-free days of the plan.


TXU Free Pass Electricity Rates

City (TDU) 1000 kWh Average Rate Non-Free Day Rate
Dallas (Oncor) 13.9¢/kWh 19.3¢/kWh
Houston (Centerpoint) 14.9¢/kWh 20.9¢/kWh
Lewisville (TNMP) 14.9¢/kWh 19.9¢/kWh
Abiliene (AEPN) 13.9¢/kWh 19.1¢/kWh
Victoria (AEPC) 14.3¢/kWh 19.8¢/kWh

Is the TXU Free Pass plan a good deal?

TXU’s other time of use plans also have high base rates.  The challenge for consumers is to shift their electricity usage habits to take advantage of the free periods.  With Free nights or mornings plans, consumers can change when they do their laundry or wash their dishes.  They can change their pool timers or do other things to plan their daily electricity-intensive chores at the right time.

It’s a little more difficult, however, to shift electricity usage to specific days of the month.  Summer is approaching in Texas which means A/Cs are about to be running all day every day.  You can’t just shove all of your air conditioning into 7 days of the month.

For most consumers, this plan would act somewhat like a free weekends plan.  If you work during the week, you should be adjusting your thermostat to use less electricity to cool your home during the days when you are working.  On the weekend, when you are more likely to be home, you probably want to keep the thermostat at a more comfortable temperature.  You’re also more likely to do energy intensive household chores like laundry during the weekend.  This adds together to make the weekends likely your highest electricity usage days.

 

What else do I need to know about the Free Pass plan?

  • The plan comes with a 12 month contract commitment
  • The cancelation fee is $150
  • It has a base charge of $9.95 per month plus a pass through base charge from your TDU of between $3.42 and $10.53 depending on where you live.
  • The plan has a renewable energy content of 6%

See Also: TXU AutoSaver Plan

Filed under: TXU Free Pass Plan Review

What You Need To Know About the TXU AutoSaver Plan

Shopping for a cheap electricity rate in Texas is a tricky business.  Most electricity plans in Texas feature rate formulas rather than actual guaranteed rates.  The TXU AutoSaver plan is no exception.  At the end of the day, your actual electricity rate will depend on several factors; some of which are outside of your control.

Here we outline the details of this new plan and compare it to plans available from Gexa and TriEagle Energy.

The TXU Autosaver plan is advertised as a way to allow consumers to benefit from any drop in natural gas prices while protecting them from rising prices beyond a certain level.

The electricity rate in the TXU Autosaver 12 plan is tied to the price of natural gas.  As the primary source of fuel for electricity in Texas, natural gas drives much of the pricing of electricity. It should be noted that this plan comes at a time when natural gas prices are already near historical lows.  The plan features a price cap feature that puts an upper limit on the electricity rate once natural gas hits a price of $3.50/MMBtu.  At the time of this writing, that is about double the current price of natural gas.

 

Historical Price of Natural Gas

Natural Gas Historical Price Chart

 

What is the electricity rate on the TXU AutoSaver Plan?

The rate customers pay for this plan is based on a complicated formula that includes a “Natural Gas Factor”.  This allows the rate on the plan to fluctuate based on the monthly closing price for natural gas.  The plan also includes a flat monthly charge of $9.95, a Base Rate of 7.4¢ per kWh, and TDU pass through fees.

Here is how that looks:

Base Rate (per kWh) 7.4¢
Base Charge (per Month) $9.95
Natural Gas Charge (per kWh) 1.995¢
Flat Pass-through Delivery Charge $3.42
Pass-through Delivery Charge per kWh 3.5778¢
Total Average Rate (1000 kWh) 14.3¢/kWh

* For this illustration we used the pricing for the Oncor delivery area which includes the Dallas / Fort Worth area.  Different parts of the state have different rates. We will also assume a natural gas price of $1.50/MMBtu

The above data is pull from the plan’s Electricity Facts Label on July 14. 2020

TXU Autosaver EFL

Is the TXU AutoSaver Plan a Good Deal?

The plan does have an upside cap that prevents the Natural Gas Charge from going above 4.655¢.  This puts an upside limit on your effective electricity rate of 17.0¢ per kWh if you use 1000 kWh in a billing cycle.

But let’s consider a mathematically best case scenario where natural gas prices go to zero.  This is not a realistic real world scenario, but it allows us to see the absolute lower bounds of the electricity rate under this plan.

Base Rate (per kWh) 7.4¢
Base Charge (per Month) $9.95
Natural Gas Charge (per kWh)
Flat Pass-through Delivery Charge $3.42
Pass-through Delivery Charge per kWh 3.5778¢
Total Average Rate (1000 kWh) 12.3¢/kWh

Even at a zero cost of natural gas, this plan would still have an all-in electricity rate of 12.3¢ per kWh for the 1000 kWh usage level in the Oncor delivery area.  At the time of this writing, there are plans available with advertised rates below 6.0¢ at 1000 KWh usage in the Oncor delivery area.

To be fair, these plans have their own potential drawbacks.  Many of them rely on usage credits that kick in right around 1000 kWhs of usage to create a best case rate scenario right at 1000 kWh.  If your actual usage falls outside of this range your effective all-in electricity rate could be much higher than the advertised rate.  This is illustrated in the chart below.  You can see that the effective rate for the Gexa Saver Deluxe 12 Plan drops substantially at 1000 kWhs of use but jumps sharply once usage exceeds 2000 kWh.  This is because the usage credit only applies to usages that fall between 1000 and 2000 kWhs.

So how does the TXU AutoSaver plan compare to plans with a simpler structure?

Trieagle Energy, a company known for less complicated rate plans currently has a plan available for 9.7¢ per kWh at the 1000 kWh usage level.  This plan doesn’t rely on usage credits and isn’t indexed to the price of natural gas. This means your actual rate is going to be close to the advertised rate once your bill arrives.

Bottom Line

It’s very easy for a consumer of electricity in Texas to get stuck in the weeds trying figure out what is the cheapest electricity plan for them.  The plans are usually complicated, and the numbers can be overwhelming.  Below we have developed a chart that compares the TXU AutoSaver Plan to plans from Gexa and Triangle.  You can see at a glance what you might expect to pay for electricity based on how much electricity you use.  It also serves as an illustration of just how volatile electricity rates can be even under a single plan.

TXU vs Gexa and Trieagle kWh

This chart shows what your actual bill would be based on the same data.

TXU Gexa Trieagle cost

Study Finds Consumers Overwhelmingly Prefer Electric Choice

A study of 1000 likely voters commissioned by The Retail Energy Supply Association shows a strong majority of consumers prefer to see choice in electricity markets.

 

The study billed as a “national scientific poll” questioned 1,000 likely voters.   They were asked about their preferences pertaining to consumer choice in several categories including electric company choice.  74% of the respondents said that they agreed that choice in the energy market is important.  Only 17% disagreed while 9% said they didn’t know.    The results echoed public attitudes on other consumer products such as internet plans and cell phone plans.  In addition, 49% of respondents said that an electric infrastructure funded totally by investors is preferable.  This is the model followed in the Texas electricity market.  35% of people said they prefer that infrastructure be funded entirely by consumers.  16% said they didn’t know.

Of the 50 states, only 14 have some level of electric choice for consumers. Texas is by far the largest market to allow homeowners and businesses a choice of electric companies.

Texas was once like most of the country in that electric consumers had to get their electricity from the regional utility monopoly.  Deregulated electricity in Texas broke up these monopolies (at least on the retail side).  Electric infrastructure such as power lines are still maintained by regional utility monopolies.   The difference with the Texas model is that consumers have the ability to choose their own retail electricity provider (REPs).  These REPs purchase electricity from power producers and resell the electricity to end users.  In the process they smooth out the volatile prices found in the wholesale electricity market.

Retail electric choice in Texas has led to lower electricity rates as well as innovation in the electricity market.  Retail choice puts the obligation on consumers to be vigilant to make sure they are on the cheapest electricity rate plan for their area.   If a consumer is willing to do their homework, they can find rates that are substantially lower than those paid in areas where electric choice is not available.

June 2020 Texas Electricity Rate Update

As the Covid-19 crisis of 2020 enters its 4th month, Texas electricity rates continue to decline. Average available electricity rates in deregulated areas of Texas are down from the prior month and down compared to last year.

In particular, three electric companies are offering aggressive rates targeted toward the 1000 kWh usage Texas customer.  4Change Energy, Gexa, and Frontier are all offering attractive plans featuring the cheapest electricity rates for small homes that use around 1000 kWh of electricity per month on average.

Compare The Cheapest Electricity Rates In Your Area
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This comes as residential electricity usage is near an all time seasonally adjusted high because of stay at home orders, school closures, and other measures that are keeping people in their homes rather than offices and schools.  Industry experts are expecting a record demand for electricity this summer even as rates are expected to hold steady.

In Dallas, the cheapest electricity rate available for a 12 month contract is the Maxx Saver 12 plan by 4change.  This plan features a targeted rate of 6.2¢/kWh for customers that use exactly 1000 kWh.  Due to the nature of the way electricity plans in Texas are structured, your actually average rate per kWh would vary depending on your exact electricity usage in a given month.

For larger homes, the Gexa Superb Saver 12 plan features a rate of 7.8¢/kWh for usages of 2000 kWh in a month.  The plan includes bill credits that kick in at the 1500 and 2000 kwh usage levels making this plan not a good choice for customers that use less than 1500 kWh in a given month.  These rates are for the Oncor service area which serves DFW and other parts of the state.   In Houston and other areas served by Centerpoint the rate is 8.0¢/kWh.  to find rates being offered by electric companies near you, enter your zipcode above to compare rates.

For apartments in most parts of the state, the Eagle 12 by Trieagle Energy offers the best rate at 10.0¢/kWh per kwh at 500 kWh.  This in the DFW area.  In Houston the rate is 10.6¢/kWh.

Summer Electricity Usage to be Lower in The U.S. but Higher in Texas

Nationwide electricity usage is expected to dip this summer even as electricity in Texas is expected to hit record highs.

The U.S. Energy Information Administration is projecting the lowest summer electricity usage in over 10 years across the country.  As with most things in 2020, these numbers are impacted by the Covid-19 pandemic.  Specifically, a decline in usage in the commercial and industrial sectors is expected to decrease overall electricity demand for the country.   Even with states easing stay at home orders, the type of economic activity that drives electricity usage will be slow to ramp up.  The EIA forecast calls for a decline of 12% in commercial electricity usage.  Residential electricity usage is expected to increase 3% as people stay home during the pandemic.

Ordinarily, long term weather forecasts account for the largest part of the government’s forecast of electricity usage.  This year, however, weather is a secondary driver to the unprecedented shifts in lifestyle, manufacturing, and retail activity brought about by the pandemic.

This reduction in electricity demand will also result in a lower utilization of coal.  Coal power plants are often the last sources to come online when demand on electricity grids peak.  This will accelerate the already multiyear trend of natural gas and renewable energy sources taking power market share away from coal.  Coal is expected to account for only 17% of electricity production across the US this summer.  This is compared to 24% in the summer of 2019.

Despite the expected national decline in electricity usage over the summer, Texas officials are predicting record high demand for electricity in Texas. According to ERCOT President and CEO Bill Magness:

“There is a lot of uncertainty in today’s world, but we are confident that Texas will still be hot this summer, Texans will need electric power as they do every summer, and ERCOT is prepared to do our part to keep it flowing reliably.”

Residential electricity usage represents a larger share of Texas energy usage than other parts of the country.  This is because of hot summers and larger houses.  Even though there is no statewide stay at home order in place, many people are still working from home and going out less.

As of June, summer 2020 electricity rates in deregulated parts of Texas are much cheaper compared to last year.   In both the Dallas and Houston areas the average electricity rate listed on Vaultelectricity.com is more than 1¢/kWh cheaper than this time last year for the 1000 kWh usage level.  This translates in to a $10 per month lower electricity bill at 1,000 kWhs per month.

 

 

August 2019 Texas Electricity Rate Update

The electricity market in Texas this August has been a tale of two markets.  Wholesale electricity rates at times during the month spiked to levels seldom seen before.  The electricity market in Texas is designed to drive up wholesale electricity rates substantially during times of extraordinary demand.  Electricity producers make much of their annual revenue during such periods.  This occurred multiple times throughout the month of August.  With temperatures soaring to over 100 degrees in most of the state, grid capacity struggled to keep up with demand.  At times the real-time price in the wholesale market hit an astonishing level of $9,000 per MW.  This is the price cap set in place by grid authorities.

Despite the historically high wholesale prices, retail electricity rates actually managed to fall during the month of August.  This is particularly true for plans targeting the 1000 kWh usage rate.   The average electricity rate for electricity plans being offered in the Centerpoint (Houston) delivery area fell from 8.5¢/kWh in July to 7.6¢/kWh in August for 1000 kWh of usage.

The cheapest electricity rates for the 1000 kWh usage level in most parts of the state are currently being offered by Pulse Power.  The Texas Saver 12 plan offered by Pulse has a rate of 7.0¢ per kWh in the Houston area.  The 24 month version of this plan is even cheaper.

August Top Electric Companies

 

Many electricity providers are currently marketing electricity plans that aggressively seek to have a cheap average rate at the 1000 kWh usage level.  As a shopper, however, you need to make sure that this fits your needs.  Many of these plans have rates that jump substantially if you use 2000 kWhs of electricity or more for a given month.

Go Griddy Customers Burned

Meanwhile, consumers whose electric bills are tied directly to the wholesale price of electricity have had a very difficult month.  Go Griddy is a retail electricity provider based out of California who promised Texas consumers savings by allowing them to buy directly from the wholesale market in exchange for a monthly membership fee.  Customers of Griddy found themselves paying more that 100 times the price of a fixed rate electricity plan at times.  Many unhappy Griddy customers took to social media to complain that their entire monthly budget was wiped out in a matter of a day or two.

 

Electricity rates for 2020 and Beyond

Although the turmoil in the wholesale market hasn’t directly hit customers who are on fixed rate electricity plans yet, wholesale prices will eventually impact the price consumers pay on their bills.  Electricity rates in Texas have been steadily falling through out 2019.  Even in the summer, when electricity rates usually go up, they have continued to decline.  Look for rates to bottom out soon, however, and start to clime towards the end of this year and going into 2020.

Texas Customers Are Consistently Switching Electric Providers

Not surprisingly, customers will switch their retail electric company if they feel they are being taken advantage of, or if brand trust erodes. Because the Texas electricity market is mostly deregulated, there are plenty of options in the area. And as Business Wire has recently showcased through a 2019 survey by Cogent Syndicated, there are a lot of customers regularly switching their providers these days. 

The data shows that 16 REPs in deregulated parts of Texas have shown an increase in brand trust, while 13 have shown a dip in brand trust. This would certainly mean a lot of switches for the 13 who were dissatisfied. Cogent puts it at about 25%.

The study by Cogent shows the strong correlation between trust and longevity of customer base. Transparency is obviously important. And with such a high percentage of people preferring Retail Electric Providers (the competitive providers in deregulated Texas), brand trust is as important as ever. 

The numbers from the study say that “ after 17 years of deregulation, 38% of Texans prefer to purchase their electricity from a REP, while 28% would like to use their incumbent utility.” A lot of people choose to go through the incumbent utility because they may not understand the ease of switching, or because they aren’t aware they could be saving more money.   Electricity rates in Texas can vary substantially from one electric company to the next.

As the Houston Chronicle states, historically, many haven’t switched despite the amount of money they could save if they did switch. That looks to be changing. Because some companies hike up rates after initial promotional offers, there is a lot of erosion of trust. And clearly, as Cogent has pointed out, many are actually switching because they customers are realizing that prices are dropping, so they should be paying less and with a provider that looks out for customer savings over profitability.