Electricity Industry News

Welcome to our Resources page. Here, you will find coverage of electricity industry news that has a significant impact on the industry and those whom it serves, as well as helpful topics for businesses and consumers, such as how to reduce your electricity bills, eco-friendly electricity usage practices, finding the best electricity rates and plans for your needs, and more.

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Vault Electricity is committed to bringing you resources that increase your knowledge of our industry and what you can do to positively affect your electricity usage as a business or a homeowner. Check in regularly; we continually have new, informative resources to share!

Luxury Electric Car Confrontation: BMW i3 Challenges Tesla

Tesla motors has company in the luxury electric vehicle market. BMW recently revealed its first mass-produced electric vehicle, dubbed the BMW i3. According to Business Insider, this futuristic-looking two-door coup will hit the U.S. market in 2014 and retail for $41,000. That’s significantly cheaper than the Tesla Model S electric car, which starts at a base price of $69,900. Electric car shoppers could be eligible for federal tax credits on both vehicles, but the BMW i3’s lower price tag will appeal to a broader range of shoppers.

With a unique design, an impressive engine the features immediate full torque and an available home charger that operates 80 percent faster than normal outlets, the BMW i3 is a welcome addition to the electric car market. With EV sales on the rise, expect to see plenty of i3s on the road come 2014.

The Specs

Most EV shoppers start their investigation of a new vehicle with the same question: How far can it go? Using its electrical engine, the BMW i3 can travel between 80 and 100 miles in between charges. That’s slightly more than most EVs, which typically have a 70 to 80 mile range. Unlike many EVs, which need speed to build torque, full torque is available immediately on the BMW i3. An intelligent heating and cooling system keeps the lithium-ion high-voltage battery at the prime temperature for peak performance. BMW includes an 8-year, 100,000 mile warranty for the battery. Shoppers who are on the fence about the range may opt for the optional two-cylinder, 34-horsepower gas engine that doubles the range. It may increase your carbon footprint, but the $4,000 option also makes the car much more convenient. Drivers looking to offset this small gasoline engine may consider eco-friendly TireBuyer Kumho tires, which cut rubber dust emissions by 10 percent.

i3 Vs. Tesla Model S

It’s natural to compare the BMW i3 to Tesla’s Model S, the polarizing EV that earned scathing reviews from the New York Times and the title of Motor Trend’s 2013 Car of the Year. But as their price tags indicate, the i3 and Model S aren’t exactly direct competitors. Tesla offers three different batteries in the Model S, all of which outperform the BMW i3’s lithium-ion battery. The Tesla Model S features a classic, sporty design, while the i3 is more likely to turn heads because of its unusual look.

Electric Car Sales Grow

Both BMW and Tesla will be encouraged by 2013’s EV sales numbers. Electric Vehicle sales more than doubled in the first half of 2013 compared to the same period of time in 2012, according to Autos.aol.com. Nearly 42,000 EVs have hit the road since January, and 36 percent of all EVs on the right were purchased in the last six months. We may not see 1 million electric cars on the road by 2015 like President Obama suggested, but the news is encouraging for an industry that hasn’t been putting its foot on the gas (or electric battery). The BMW i3 is one of the most anticipated vehicles of 2014, and could boost this EV surge even more.

Texas Tops States in Grid Modernization

Texas ranks at the top of 41 states for the modernization of its electricity grid.  This is according to a report released by a group called Gridwise Alliance in conjunction with the Smart Grid Policy Center.  The report assigned a Grid Modernization Index score (GMI) to 41 states and the District of Columbia.   The GMI value for Texas was 83, putting it alongside California at the top of the 41 states included in the report.  Nine states were not included in the analysis.

The Grid Modernization Index consists of three components.

  • Policy – State policies and regulatory mechanisms that facilitate grid investment
  • Customer Engagement – Investments throughout the state in customer enabling technologies and capabilities
  • Grid Operations – Investments throughout the state in grid enhancement technologies and capabilities.

In addition to a top overall score, Texas obtained top scores in the Policy and Customer Engagement categories.   The Policy score includes components such as the presence of a grid modernization strategy and the presence of Renewable Portfolio standards.

Texas obtained a top score for Customer Engagement which is a metric that includes such things as the availability of dynamic pricing plans or rates that leverage smart grid technology.  In recent years, Texas has seen a proliferation of innovate products made available because of smart grid technology.  These products include Free Nights plans, Free Weekend plans, and prepaid electric plans that rely on smart meter technology.

The Texas electricity marketplace is substantially different from other states in a number of ways.   The Texas grid is independent from the other major electric grids that serve North America.   Texas is also by far the largest deregulated electricity marketplace in the U.S.  The authors of the report point to a positive correlation between a state’s GMI score and the availability of retail choice within the state.

Challenges Remain

Despite Texas’ strong showing in this report, significant challenges remain for the state’s electricity grid.  Capacity has been a concern for a number of years and continues to be so.  Each summer there is concern that the state’s electricity producers will not be able to supply enough power to meet demand; especially in the event of an unusually hot heat wave.  Such concerns have led to, as yet, unsuccessful attempts to convert the state to a Capacity Market for electricity.  Under such a scheme, producers are paid simply to build additional capacity and have it available if needed to meet peak demand.  Such a move would inevitably lead to higher electricity rates.

According to numbers published by the Energy Information Administration, the average Texan pays 11.59 cents per kilowatt hour for electricity.  This average, however, is not indicative of what a motivated consumer who is willing to shop and compare rates should expect to pay.  For example; as of this writing, 4ChangeEnergy is currently offering a rate of 9.0 cents for a 12 month electricity plan in the Houston area.  Month-to-month rates are even lower.  Reliant energy, for example, is currently offing a rate of 7.9 cents in the Dallas area.

See Also: Texas State Senator Pressures ERCOT to Leave Reserve Margins Unchanged


Texas State Senator Pressures ERCOT to Leave Reserve Margins Unchanged

Texas State Senator Troy Fraser, a central Texas Republican, warns that an increase in reserve margin would be seen as a backhanded attempt to bring about a capacity market in Texas.  The Electric Reliability Council of Texas (ERCOT) had been considering a move to raise the state’s reserve margin from the current 13.75% to 16.1%.

The reserve margin is the excess capacity maintained within the state’s grid as insurance against unexpected loss in supply or an unexpected spike in electricity demand such as might occur during extreme weather events.

The scorching summer of 2011 was an example of just such an event.  The unprecedented heat wave put a great deal of pressure on the Texas electricity grid and threatened the state’s electric users with rolling blackouts.

Fraser’s argument against the raised reserve margin is twofold.   He argues that 2011 was an outlier in terms of Texas weather and that any analysis that uses 2011 data to set the future target reserve margin would be overly aggressive.

In his letter to ERCOT he writes:

“Both electric end users and I have expressed a desire to exclude extreme years when computing future reserve margins.”

His second, and perhaps primary, argument is that the contemplated raise in the reserve margin would strengthen the case for the controversial proposal to introduce a capacity market in Texas.  Under a capacity market, ratepayers would pay power producers to build power plants regardless of whether the resulting power is ever sold.  It’s a move that would inevitably result in higher electricity rates in the state.

In his words:

“With the makeup of the ERCOT Board heavily weighted in the electric industry’s favor, any vote to drastically increase the reserve margin appears to be self-serving and could increase electric costs for all consumers.”

In the end, ERCOT chose to leave the reserve margin unchanged as of now.  Deciding instead to wait and see how the policy debate between the PUC and the Texas legislature plays out.

If a capacity market is eventually instituted in Texas, it would be a drastic change for the nation’s largest deregulated electricity market.  Under Texas’ current “energy only” model, producers are only paid for the electricity they sell to the market.

See Also: Texas Electricity Rates Going Up – Again
See Also: Texas Electricity: 2013 Outlook Improves

Hoodwinked by Hybrids? A Resale Comparison of Gas and Hybrid Vehicles

Hybrid vehicles are touted by many to save you money at the pump and earn you money on resale, but you may be throwing money away. We compared four of the best-selling hybrid automobiles with their gasoline-powered counterparts and found that the resale value on the hybrids is similar or much lower than the gas models. For the purposes of these comparisons, we used the value calculator for used cars at kbb.com. Each car that we compared for this hypothetical was a fully loaded 2011 model with an automatic transmission and 30,000 miles on the odometer, so the estimates are as comparable as possible. We estimated each car to be in excellent condition, to level the playing field. We also used the private party values, as opposed to the dealer trade-in numbers.

Toyota Prius

First, take the Toyota Prius. The Prius is the best-selling hybrid on the market, and it has held that distinction since it was first released in 2000 to the United States market. The Prius started the hybrid craze, and Toyota keeps improving the vehicle so that it stays at the top of the game. We compared the Prius to its gasoline counterpart, the Toyota Yaris. Toyotas consistently hold their value, so when these two were compared, the Prius came out close to the Yaris in resale value. When purchased brand new, the Prius would cost you around $27,000, while the Yaris could be had for a little less than $15,000. For current value, the Prius came in at just under $25,000, while the Yaris sedan was estimated to be worth $12,000.

2010-2011 Toyota Prius -- 12-21-2011

Photo of 2010-2011 Toyota Prius via Wikimedia Commons. All Rights Released.

Honda Civic

Next up is the Honda Civic, which could be purchased in hybrid form or a gasoline model. The Civic retailed for about $23,000 for the hybrid, and about $22,000 for the gas model when brand-new. The current Civic hybrid retails for $17,000 and the gas model comes in around $18,000. This is much different from our Toyota comparison. The Honda Civic hybrid depreciated much more than the regular Civic.

2011 Honda Civic coupe -- 09-28-2011

Photo of Honda Civic via Wikimedia Commons. All Rights Released.

Ford Escape

For the SUV fans in the crowd, Ford makes a great hybrid in the form of the Escape. A brand-new Escape hybrid cost buyers about $33,000 in 2011, while the gasoline counterpart could be had for about $31,000. Current values on the Escape are $25,000 for the hybrid and $23,000 for the gasoline model. This amount of depreciation is very similar, and doesn’t lend credence to the idea that hybrids maintain their value.

2011 Ford Escape Hybrid -- 2011 DC

Photo of 2011 Ford Escape Hybrid via Wikimedia Commons. All Rights Released.

Volkswagen Touareg

For the higher-end buyers, Volkswagen has come up with a hybrid Touareg SUV. This is the top of the line model in the VW lineup. The 2011 Touareg hybrid cost buyers a little over $61,000 for the hybrid model, as opposed to just over $56,000 for the gas model. Volkswagen, like Toyota, consistently retains a high resale value. When comparing values on this car today, both Touareg models come in at just over $40,000 for the resale value. This is a much higher depreciation rate on the hybrid.

Volkswagen Touareg hybrid -- 2011 DC

Photo of Volkswagen Touareg hybrid via Wikimedia Commons. All Rights Released.

As evidenced by the above figures, hybrids don’t do as well on resale as many claim. The hybrids we compared were similar or lower in resale value than their gasoline counterparts. While these vehicles can save you thousands at the pump, our research and a similar study from the New York Times shows that you will need to own them for many years to recoup what you paid at the dealer. Whether this cost is worth it or not is up to the individual buyer, but the benefits of going green are worth the added cost for some buyers.

Government’s eGallon Figures Are Misleading

The Department of Energy has published a new tool to inform consumers of the financial benefits of switching from a gas vehicle to an electric vehicle.   The new tool called ‘eGallon’ compares the fuel cost of driving an electric vehicle vs. the fuel cost of driving a gas vehicle.  The results make it appear that anyone who is still driving a gas vehicle must be a complete financial idiot.  The problem is, the calculations are incomplete and misleading.

The calculations show that fueling an electric vehicle has a cost equivalent of paying $1.14 per gallon of gasoline.  That’s a national average.  Results differ by state. According to the government, this makes the fuel cost of electric vehicles about one-third that of gasoline.

The calculations are based on an assumption that the average 2012 model automobile has a fuel efficiency of 28.2 miles per gallon of gas.  Starting with this number, it’s then a matter of calculating how much electricity would be required to drive the average electric vehicle that same distance then calculating the cost of that electricity.  The result is the eGallon value.  So far, so good.

Because both electricity rates and gas prices can vary quite a bit from state to state, the tool breaks down the eGallon cost by state.  In Texas, for example, the average gallon of gas costs $3.37 as of 6/10/2013.  The eGallon rate is $1.09.  In New York the spread between the gas rate and the eGallon rate is smaller.  Gas costs on average $3.70 while the eGallon rate is $1.80. 

But here’s the problem

The eGallon tool, while interesting, is still only a very rough approximation of the true savings any given consumer might expect as a result of going electric.  And it ignores some important facts which make its ultimate conclusions somewhat questionable. 

For starters, it doesn’t take into account battery costs.  The batteries required to make electric vehicles work aren’t found in gas vehicles.  They are very expensive, and have a finite lifespan before they must be replaced.  This replacement cost should be factored into the fuel cost for an electric vehicle.   

If we assume, for example, a replacement cost of $7,000 for the EV battery and a lifespan of 100,000 miles for the battery it adds about $1.97 per gallon to the eGallon rate (7 cents per mile x 28.2 miles per gallon).  It turns out that electricity cost isn’t even the primary factor in the fuel cost of an electric vehicle.  That’s a pretty significant omission in the government’s eGallon calculation.

Note:  100,000 miles seems to be a reasonable estimate for an average EV batter lifespan.  To play with different assumptions of battery lifespan and replacement costs use this electric vehicle cost calculator.

Who’s going to pay those taxes?

A large amount of the cost of each gallon of gas is made up of federal and state taxes levied on each gallon of fuel.  The amount varies but in Texas it is around 38 cents per gallon. It can be as high as 69 cents per gallon in places like New York.  A very large portion of these taxes go to pay for things like highways and bridges. 

The money needed to keep roads in usable condition must come from somewhere.  If the entire country magically switched to electric vehicles today we would have to come up with the equivalent of around 40 cents per gallon of money from somewhere to pay for the roads and other public obligations.   

In other words, at a macro level we aren’t avoiding 40 cents per gallon of cost by not buying gas for our cars.  We are just shifting that cost somewhere else.  It will ultimately come back to us in the form of another tax.  This is precisely why some states have toyed with the idea of a tax on electric vehicles.

One could reasonably argue that when comparing the “per gallon” cost of gas vs. electric, the tax amount should be removed from the equation.  This money does not represent a fuel cost. Wear and tear still happens to the roads regardless of how the car is powered.  That cost doesn’t disappear because we stop buying gas. It just gets shifted somewhere else.

For the sake of a proper comparison, you can either remove the taxes from the cost of the gallon of gas or you can add it to the eGallon.  Since eGallon is the star of the show, let’s add the value to the eGallon price.

An Adjusted eGallon calculation

Taking into account the battery cost and the expenses involved in highway upkeep (taxes) we can derive an adjusted eGallon calculation.   The result is not so one sided as the government’s calculations.

$1.09  – Government’s eGallon calculation for Texas (6/10/2013)
$1.97  – Per gallon EV battery cost (7 cents per mile x 28.2 miles per gallon)
$0.38  – Taxes per gallon (Texas)
$3.44 Adjusted eGallon rate for Texas

This is compared to an average gas price in Texas of $3.37 per gallon.

It’s not all bad

All of this is not to dissuade the adoption of electric vehicles.  It’s only meant provide a more realistic comparison between gas and electric.  There are some things that can be done to tilt the equation back in favor of the electric vehicle.

Hopefully, battery technology will continue to improve resulting in longer lifespans and cheaper replacement costs.  Also, second life applications for used EV batteries such as local or grid level power storage in support of wind and solar energy may help the residual value of old car batteries.  That would help improve the numbers in favor of the eGallon.   

Also, the electricity costs used in the government’s calculations are only averages.  There is a lot consumers can do, particularly in deregulated states like Texas and New York to reduce that cost.  The simplest is by just shopping multiple electricity providers to find the cheapest providers and plans.

As ‘time of day’ pricing becomes more practical because of smart meters, many electric companies are offering innovative plans such as Free nights and weekends electricity plans.  With such a plan an electric vehicle owner could theoretically charge their vehicle overnight at zero electricity costs.   

Keep in mind, however, as with the aforementioned taxes, costs rarely just disappear.  More often they are just shifted elsewhere.  This is the case with most free nights electricity plans.  The day time rates are often substantially higher with these plans than traditional electricity plans.  This means that while you may top off your car battery for free at night, you will pay a lot more to brew your morning coffee and keep your refrigerator running.

Alas.  There truly is no free lunch…

New York Electricity Rates Are High And Going Higher

Con Ed is petitioning the state’s Public Service Commission to approve an electricity rate hike and a gas rate hike for New York City and Westchester county consumers.   The $400 million in additional funds would be used to better storm-proof the New York electricity infrastructure; doing such things as burying overhead transmission lines and upgrading gas system equipment.   $25 million of the $400 million would come from rate increases on gas service.

This is despite the fact that New York’s electricity rates are already the highest of any state in the country with the exception of Hawaii.   According to the U.S. Energy Information Administration, New Yorkers pay on average 18.26 cents per kwh as of March 2013.  This is compared to a national average of 11.59 cents.   Although, savvy consumers who live in areas open to electric choice can usually find much better rates.

Consolidated Edison, the utility responsible for the transmission and delivery of power to the New York City area, has been the target of criticism lately from labor unions, green energy advocates, and New Yorkers who are unhappy with the company’s handling of the aftermath of Hurricane Sandy.

The unionized utility workers claim that Con Edison’s ability to ensure safe and reliable electric service has been compromised by recent massive cuts in labor.   According to the union, the utility isn’t investing in maintenance and prevention but rather scrambling from one emergency fix to another.  The also claim that it wasn’t prepared for Hurricane Sandy because of it’s labor issues and the resulting lockout last year.

In the company’s letter to the Public Service Commission they point out that their proposed rate filing for November of 2012 was postponed in other that they might focus their attention on the aftermath of Sandy.

Specifically with regard to future improvements meant to mitigate the impact of future storms, the filing says this:

“We have identified several strategies based on our own recent experience, as well as our understanding of several preliminary recommendations made by new commissions established by Governor Cuomo following Superstorm Sandy. Our plans include strategic undergrounding and flood protection projects, including flood walls for certain electric and steam equipment, raising critical equipment in light of higher potential flood levels, upgrading gas system equipment, and accelerating installation of submersible equipment, where appropriate.”

See Also: New York Power Plant Could Go From Coal To Natural Gas


Feds Not Optimistic About Texas Electricity Capacity

The Electric Reliability Counsel of Texas (ERCOT) is feeling a little better about Texas’ chances of having enough electricity to meet demand this summer and in 2014.  The North American Electric Reliability Corp (NERC) is not so sure.  NERC is the federal authority responsible for the reliability of the country’s electricity grids.

ERCOT has issued a number of warnings in recent years about potentially not having enough electricity supply to meet demand during peak periods; warning last summer that blackouts or calls for emergency conservation could occur if there was a sudden spike in demand our unexpected loss of power generating capacity.

At issue is the so called reserve margin.  The reserve margin is the safety cushion between expected peak demand for electricity and the supply that the electricity grid is able to provide at full strength.  Having an adequate reserve margin insures against blackouts in the event of weather related spikes in electricity demand such as summer heat waves.  It also helps in the event that there is a loss in power production as sometimes happens as a result of bad weather. 

13.75% is considered an adequate reserve margin for the Texas electric grid.  NERC anticipates that Texas will have a 12.88% reserve margin (pdf) this summer.  That equates to 6,780 MW of power.  ERCOT officials, however, are saying that they are comfortable that the state will make it through the summer without any significant issues based on their projections of a relatively mild summer.

Texas, which operates its own grid independent from the major continental US grids, is deregulated and relies on free market dynamics to ensure that there is enough electricity to meet demand and that electricity prices reflect market balance.   In this model, independently owned power producers sell their electricity to retail electricity providers in a wholesale market.

Cheap electricity in Texas for the past few years, while great for the consumer, has made it tough for power generators to invest in more capacity.  This has resulted in the current tight margin between supply and demand for electricity and has lead some to (unsuccessfully) try to push the state into a capacity market model for electricity.  ERCOT indicates that new natural gas power plants expected to come online in 2014 along with an improved demand response program will improve the situation going forward.

Three Great Electric Motorcycles For A Range Of Budgets

Electric vehicles, both automobiles and motorcycles, continue to make noticeable improvements in both performance and range. For motorcycles, the performance ability gains have been huge, although the gains in range have not been enough to widen their appeal. People want emissions-free vehicles, and they want to pay as little per mile as possible. It may be a while, however, before electric bikes knock their gas-powered cousins out of the top spot.

Creating an electric bike that really sells and turns a profit is much harder than one might imagine, according to the New York Times. They can compete in performance, but range and price continue to hamper their competitiveness in the market.

Three Promising Electric Bikes

A silent motor, no shifting, cheap to run and sometimes quite fast — electric motorcycles do have a lot going for them. Here are some of the more notable electric motorcycle out there.

Yamaha EC-03

This little bike is deceptively small and slight in appearance, but it provides everything the average commuter needs to zip around town and back and forth to work. The Yamaha parts and synchronous motor, according to TopSpeed.com, allow riders to switch easily from Standard to Power mode at the push of a button. Granted, the top speed is only 25 mph, but when the rider needs to merge into traffic, power mode can make a serious difference.

What makes the EC-03 special is its affordability and its ease of use. At only $2,559, it is an affordable option for the daily commuter. The user can also charge it in a simple three-pronged wall outlet. At 123 lbs., it is quite light and maneuverable for bringing indoors or situating into a parking space.

Zero DS

The Zero DS is on the other end of the spectrum from the EC-03. This is a serious electric bike designed to compete in the full-sized motorcycle market. It is a remarkable improvement over its predecessor, delivering horsepower and range increases that are nearly double those of previous models.

According to Wired.com, traveling from zero to 60 mph on the DS takes only a little over five seconds. The bike sports 54 horsepower and weighs around 400 pounds. Riders have the option of a Sport mode or an Eco mode.

In Sport mode, the rider can hit a top speed of 95 mph, while in Eco mode the max speed is 70 mph and the torque is reduced to 70 percent. Range is limited to 95 miles in the city using the base battery. With a $2,000 battery upgrade, users can expect about 126 miles of range in city driving.

Driving at top speed reduces the range significantly. At 55 mph one can get about 57 miles with the base battery and 76 with the upgrade.

The Zero DS base model costs $14,000.

Brammo Enertia

Falling somewhere in the middle, the Brammo Enertia aims to provide a fun riding experience in a more affordable package. Weighing in at 324 lbs., the Enertia achieves a top speed of 59 mph and costs $7,995. According to Brammo.com, the bike can get about 42 miles from a single charge.

The Enertia is made using premium components, including shocks from Elka, brakes from Brembo and forks from Marzocchi. The bike is supposed to ride quite well as a result.

Susan Carpenter of the LA Times reviewed the first model year of the Enertia in 2009, in the video below, and got some background on the company and manufacturing. 


The Future

The general public may have not bought in to the idea of electric motorcycles just yet, but the manufacturers continue to push out more competitive models. The future of these zero-emission options will largely hinge upon price and range. If manufactures can improve significantly in these areas, electric models are likely to become far more appealing in the future.

Yamaha EC-03 photo from Flickr user kosabe.

Natural Gas Exports Mean Likely Higher Electricity Rates in Texas

A decade ago the idea of exporting natural gas from the U.S. would have been unthinkable.   Now energy companies are lobbying federal regulators hard to get permission to sell cheap U.S. natural gas to overseas markets.  A facility in Freeport, Texas becomes one of the first to receive conditional approval from the Energy Department to begin exporting liquefied natural gas (LNG).

The controversial practice of natural gas fracking has lead to a paradigm shift in U.S energy policy.   New drilling techniques have resulted in a surge in natural gas production in the U.S.  But energy producers have become so good at extracting natural gas from the ground they are no longer able to get a premium price for their product in the U.S. 

The supply of natural gas relative to the demand makes it a much less precious community than in yeas past.  Prices have fallen dramatically.  The solution according to many is to begin exporting U.S natural gas to foreign markets where natural gas trades at much higher prices.

There are major political and financial hurtles that have to be cleared, however, before exporting can begin.  Exporting natural gas requires approval from the Energy Department.  The Department must determine that the project is in the best interest of the country.  In total there are around 20 applications pending to begin exporting.

Exporting natural gas is a capital intensive undertaking.  In order to ship natural gas it must be cooled to liquid form (liquefied natural gas) and loaded onto large vessels for shipping.  This necessitates infrastructure and large facilities; all of which means lots of money.

The Freeport facility can likely be up and running sooner than other projects because, ironically, it was originally built by Dow Chemical and several other partners as a LNG import facility.   This was at a time when natural gas prices were much higher and there were concerns about having enough natural gas in the U.S to meet domestic demand.  A consortium of investors will now be retooling the facility to ship LNG out of the country.

To the Texas consumer, this development is a mixed bag.  Energy is a large part of the Texas economy. What is good for the energy industry is generally good for the state.  However, once natural gas exports begin, it will almost certainly mean higher prices.  Since Texas electricity rates a driven in large part by the price of natural gas, electric rates will almost certainly go up.   This would first be reflected in the wholesale electricity market and ultimately be passed on to consumers by electricity providers.  

See Also: New York Power Plant Could Go From Coal To Natural Gas
See Also: How Texas Will Lead America’s Energy Future


Comparing the TXU SecureSaver Plan to Other Providers

TXU’s newest commercial promotes something they call the TXU SecureSaver Plan.  Taking a closer look at the details of the plan shows it suffers from the same problem as most TXU plans – the rates are just too high.

The plan promises to protect you from rate increases and save you 20%.  But 20% of what?  The reality is that TXU’s rates are so high that, even after a 20% discount, you are still paying way more than most other providers charge.

The Secure Saver plan is a 24 month plan.  At the time of this writing, the rate for the plan in the Dallas area is 13.9¢ per kwh (assuming you use 2,000 kWh per month).  The 20% discount promised in the advertising only applies to the first 12 months.  The rate is 11.2¢ per kwh in the first year after the discount. 

In the second year the rate would shoot back up to 13.9¢ per kwh.  Assuming you use roughly the same amount of electricity the second year as the first, that makes your average rate for the 24 months 12.6¢ per kwh.

How does this compare to other electricity providers in the Dallas area?

TriEagle Energy is currently offering a 24 month plan in Dallas for 9.0¢ per kwh.   That’s substantially better than even the 20% discounted first year of the TXU plan.  Bounce Energy is also offering a 24 month plan for just 9.6¢ per kwh.

The rates are slightly different but the results are the same in the other parts of the state, including the Houston area.  TXU’s plan is more expensive than almost any other provider.

Protection Against Rate Spikes?

If it’s protection against price increases you want, you could even consider the current 36 month plan being offered by TriEagle for the same 9.0¢ per kwh as their 24 month plan.

Bottom line

When shopping for electricity in Texas it’s easy to get lost in all the numbers.  But here is the bottom line:

Over the 24 months of the plan, TXU’s SecureSaver Plan would cost you $1,704 more than other providers.

Note:  Electricity rates in Texas change often.  The rates in this piece are as of 4/29/2013.  To get up to the minute rates for your city enter your zip code in the search box above.

See Also: Are TXU Rates The Most Expensive Electricity Rates In Texas?