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Champion Energy Texas Time-of-Use Rates

One of the promised benefits of Texas smart meter deployment was that retail electric suppliers would develop rates based on the availability of the interval usage data.  While traditional watt-hour meters only record cumulative electricity usage, smart meters record, store, and transmit energy usage in 15-minute intervals.  This means a smart meter will generate 2,880 usage data points in a 30-day billing period compared the single data point of a standard meter.

The benefits of smart meters to power grid management and delivery system design are significant.  Instead of relying on statistical sampling methods to determine residential usage patterns, the Transmission and Distribution Utilities (TDUs) now have a detailed data stream to use in meeting the needs of their customers.  Given these system benefits, one could ask how smart meters directly benefit retail energy consumers.

Time-of-Use Electricity Rates

The answer lies in time-of-use rates.  Retail electric providers are developing rate plans that reward customers who use less energy during peak times.  Two types of customers benefit from time-of-use rates.  First, there are customers who inherently use less electricity during weekday daytime hours.  These electricity customers may travel away from home during the week or reduce heating and cooling use during the day when their home is unoccupied.  Second, there are customers who are able to shift energy-intensive processes to nights or weekends.  Examples of high consumption processes include laundry, dishwashing, and baking.

Off-Peak Electricity Rates

Champion Energy Services has launched two time-of-use products for Texas retail electric customers.  The Night Owl product is a 24-month plan that offers fixed prices for two usage blocks.  The day rate is effective from 6 am until 10 pm.  The night rate is effective from 10 pm to 6 am.  When estimating an overall effective rate, Champion Energy Services uses the assumption that 70% of electricity usage is in the day block and 30% is in the night block.  Customers who are not home during the day or can delay laundry and other high consumption tasks until the night block may fare well on this rate plan.

Free Electricity Plans

Champion Energy Services also unveiled its Free Time electric rate plan for Texas consumers.  This plan has a zero energy charge for all usage on Saturday and Sunday.  TDU charges still apply to all electricity consumption.  Therefore, it is important to note that the energy used during the weekends is free but te delivery of the electricity is at standard rates.  This approach to TDU charges differs from the time-of-use plans offered by TXU and Direct Energy.  When calculating an effective overall electricity rate, Champion Energy Services uses the assumption that 80% of electricity usage occurs during weekdays and 20% is used during weekends.  Customers who travel during the week or can postpone using energy-intensive appliance until the weekend may benefit from this rate plan.

The most important thing to know when considering a time-of-use electricity plan is where you currently stand with regard to when you use energy.  Texas electricity customers can access their smart meter usage data and see how they compare to the default assumptions used by the retail electric provider.  Then, customers should carefully consider if they can shift energy usage to the lower price or free time blocks.  As these products become more prevalent in the market, retail electric providers will be able to use consumer feedback to refine and perfect their offerings.  Look for more time-of-use rate plans to be launched in the near term.

About: Charlie Hewitt

Charlie Hewitt has more than 25 years of in-depth energy experience having served in executive and managerial roles at some of the largest retail energy providers in North America. His expertise covers a wide range of retail energy disciplines including pricing, contracting, risk management, and credit. He holds an MBA from UT Arlington, MA and BS degrees in geology from UT Austin, and was a TXU environmental research fellow.

1 Comment on “Champion Energy Texas Time-of-Use Rates”

  1. The Free Time weekend rates sound like what we need to, and will, sign up for. This is great, and it’ll really help cut down on some of the expense, which we’ll be able to see in the long run. As a mother of 3 girls, all laundry is done during the weekend, which with the five of us, is alot of laundry. Can’t wait for this option.

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