Thousands of TXU Energy customers are taking advantage of the utility company’s offer of free electricity at nighttime. The free overnight plan offered by TXU is just one of the more than 50 other retail electricity companies in Texas offering similar savings over the last three years.
Energy companies are running aggressive campaigns, including radio and television commercials, billboard advertisements, and on social media networks, promising free electricity for cooling the home, cooking, and using electricity for entertainment devices at certain hours.
TXU Energy’s chief executive, Jim Burke, commented about the importance of consumer choices.
“The American consumer wants choice. Consumer choice, with its impacts and benefits, will drive the future of the power industry. I think the pace at which it evolves is the unknown.”
TXU Energy believes the free electricity plan they offer their customers is a tremendously significant marketing tool and a greater alternative than paying higher costs for the necessity.
However, the utility companies are not giving out free electricity for altruistic reasons. Utility companies are clamoring to get more customers and keep them, due to intense competition, resulting from Texas deregulation.
By offering free electricity at night, utility companies reduce some of the energy costs and the burden an oversupply of wind energy places on the power grid.
In addition, it turns out that utility companies in Texas have more wind power than any other state, accounting for roughly 10 percent of the state’s energy generation. In addition, Texas runs their own electricity grid – it is barely connected to other electricity grids in the United States. Being connected to their own electricity grid allows them to have plenty of nightly wind power generated and available, which must be consumed.
Another reason companies can offer free electricity is because they use wind turbines to collect wind power. The wind blows stronger at night and the power it produces is less costly because of its great quantity and federal tax breaks it allows.
Utility companies like TXU Energy would rather have their consumers using less, more costly electricity during the daytime hours and use more, readily and inexpensive electricity at nighttime. Additionally, using less power during peak daytime hours equates to lower wholesale prices, and the possibility of avoiding the costly alternative of building more power plants.
Other utility companies throughout the world are also offering unique and varied incentives.
For example, Enel — a leading utility company in Italy — offers incentives for customers keeping their electricity use below a predetermined level during high demand.
Baltimore Gas & Electric, in Baltimore, offers rebate credits on their customer’s bills for every kilowatt-hour less that they use during certain high-demand times. Opower runs the program, along with various other programs for a number of utility companies.
In Worcester, Massachusetts, National Grid has installed a home energy management system from Ceiva Energy in about 11,000 homes, where they connect an assortment of devices like high-tech thermostats, smart plugs, and digital picture frames that display the home’s energy use along with the photos.
However, no major utility company has gone as far as the companies in Texas. The companies in Texas are conducting an enormous energy experiment involving the nearly universal distribution of residential smart meters they installed at homes and businesses in recent years. These smart meters are capable of receiving and transmitting data on electricity.
Soner Kanlier, a retail energy markets expert at DNV GL, a consulting firm based in Oslo, Norway told the New York Times how far ahead Texas is in comparison to other utilities around the world.
“Texas is head and shoulders above everybody else with really unique packages for the consumer.”
Texas’ power market is unique. It can take advantage of innovation better than most others can. It has the largest deregulated electricity market in the United States. TXU Energy’s new marketing plan of offering free electricity to their customers is one more way for the company to stay ahead of their competition.
[Photo by Justin Sullivan/Getty Images]