Electricity plans tout savings with gimmicks (video)


Direct Energy today promoted the latest offer in what has become an increasingly competitive and gimmicky electricity market.

Though it doesn’t match up with the donuts surrounding a recently announced Reliant Energy “sweet deal” plan that is advertised to give consumers a free month of electricity after a 12-month term (Matthew McConaughey did the voiceover for the commercial), the Direct Energy offer appeals to customers’ interest in getting some cash back.

Electricity companies say their plans can save customers money. TXU Energy, for example, says its loyalty rewards plan will give $36 million back to its residential and business customers this year.

But some in the industry have pointed out flaws with options promoted by some companies.

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The new deal from the Houston-based electricity retailer will give 3 percent credit back to customers after three months of use, according to a Direct Energy news release.

That could mean a savings of about $45 on a 12-month plan, according to Direct Energy, which has also created some plans to appeal to other customer interests, like natural gas pride.

While the number of such offers is rising, with plans featuring free weekend or night electricity, they can be misleading, said Jake Dyer, a policy analyst for the Texas Coalition for Affordable Power, which represents 160 cities and advocates for consumers in the competitive electricity market.

“I think what it does point to is that these plans can be very complicated,” Dyer said. “There could be some gimmicks in the fine print.”

Some plans may involve a deposit, a dramatic change in rates after a 12-month term, termination fees, late fees, or other requirements that are not easy to find, even in listings detailing some aspects of plans listed on the state’s powertochoose.org website, Dyer said.

“I think it’s super important that consumers go in with their eyes open when they look at these plans and realize that the low rate that they see might not be the full story,” he said.