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When selecting an electricity provider, you may be overwhelmed with the choices available to you. Ads promise: “Free nights and weekends!” “No credit check!” “No contract!” Why is that? Since the electricity market in Texas was deregulated in 2002, Texas residents have had the freedom to choose from dozens of retail electricity provider companies. Initially, electricity plans were a monopoly of one company, making plans expensive and distribution inadequate. Now, there are more than 70 retail electric providers in Texas.
With competition for your business, the cost of Texas electricity is competitive for consumers.The competition is not just about the price per kilowatt-hour (kWh), but also involves discounts, promotions, and offers geared to attract as many consumers as possible. If you’re setting up electricity in a new home or switching providers in your current home, plenty of options exist.
Before you take what sounds like the best deal, it’s important to understand pricing, discounts, and promotions. For example, it’s common for some consumers to pay more for 999 kWh, than those who have used 1,000 kWh. Rate tiers, bill credits, fees, and other hidden costs can present a challenge to consumers when trying to calculate their usage and determine their payment. Some online calculators can help simplify these calculations. One gimmick select retail electric providers use to attract your business includes offering free power on nights and weekends.
Before discussing the myths of free nights and weekends electricity plans, it is important to understand why companies offer these kinds of plans. By offering free nights and weekends, electricity providers incentivize consumers to use electricity during off-peak hours. By encouraging off-peak electricity use, it helps power companies avoid outages and equalize energy usage across all times of day. The concept of free nights and weekends can be beneficial to conserve energy, help minimize the strain on the power grid and keep prices stable.
The same can be achieved, however, with thoughtful energy-savvy actions at home. Whether you have a free nights and weekend electricity plan or not, doing chores like laundry or dishes in the evening can help conserve energy – especially during the summer months. It saves you money to use less energy during peak hours, like the heat of the day when demand from air conditioning is high.
Electricity providers advertising free nights and weekends may not provide the full picture. As you’re looking for affordable electricity for your home, consider these common myths associated with free electricity plans..
Sure, free nights and weekends electricity plans list your price per kWh as free within certain timeframes. However, in order to make a true cost comparison, compare the cost per kWhoutside of the free timeframes. Often, the cost is much higher during the hours that you are paying forthan plans that charge you during all hours of the day. For example, some comparisons show free nights and weekends plans can be as high as 25.5 cents per kWh, whereas the average price for Texas prepaid electricity is well under 20 cents per kWh (as of September 2022). . So, even though you don’t pay for electricity on nights and weekends, you pay more for the electricity you use the rest of the week.
The advertised kWh rate is also based on what percentage of electricity is expected to be free. For example, one leading plan estimates 34.90% of night and weekend usage, but your actual percentage may be lower, while you’re paying more per kWh during daytime hours.
How to read free nights/free weekends EFL
Examining the free nights and weekends Electricity Facts Label (EFL) will reveal the true cost of electricity for your household.. One leading provider with “free hours” advertised average rates at 25.5 cents* per kWh, but the daytime energy charge is actually 39 cents per kWh upon reading the EFL. By comparison, Payless Power’s prepaid plans are approximately 21cents* per kWh, much less than the “free nights” plan. Offsetting the free nights and weekends with higher daytime rates could result in higher bills for the customer.
Marketing materials for free nights and weekends plans have stated that between 30% and 40% of electricity is used on nights and weekends. This statistic leads people to believe that by switching to free nights and weekends, they can save 30% to 40% on their total electric bill. However, after examining the cost structure in myth #1, these savings don’t translate because you are often paying more for the electricity you use during weekdays. Additionally, if 30-40% of electricity is used on nights and weekends, that means 60-70% is used during weekdays. If you and your family spend a lot of time out of your home on weekends or go to bed before 10:00 p.m., it is likely that you won’t see true cost savings from switching plans.
True cost savings with free nights and weekends plans are not as high as some providers lead you to believe. In some cases, the higher price per kWh actually leads to a higher bill than traditional or pay-as-you-go electricity plans. Additionally, these plans often have long contract periods and charge high cancellation fees (of $150 and upwards) that can ultimately trap consumers into paying a higher price for longer periods of time. Additionally, if you don’t have a good idea of your electricity consumption and your peak usage hours, it can be difficult to make adjustments that take advantage of free nights and weekends.
All in all, free electricity plans can save you money in the right situation, but almost never save you as much as you think. In some cases, consumers have spent between $700 and $1,000 more per year on electricity after being locked into a long-term, high-energy-price contract. Before signing up for a long contract, take time to read the fine print so you completely understand the cost implications.
Payless Power offers simple, gimmick-free prepaid electricity plans that require no deposit or lengthy approval process. Our plans offer a guaranteed rate for the contract term, including short six- and 12-month contracts that don’t lock you in if the plan’s not right for you. Enter your Texas zip code to discover the right plan for you today!
It depends on two things: First, when you use the majority of your electricity, and second, the cost per kilowatt-hour for the electricity you do pay for. These too-good-to-be-true plans are often marketing gimmicks to get you in the door. Customers then discover much higher costs per kilowatt-hour for weekday pricing, spending hundreds more on electricity each year as a result. If you check your EFL, you can see what hours and days of the week make up your peak usage times. If you work outside the home at a typical 9 to 5 job, then you might be drawn to one of these plans because the majority of your electricity use is during nights and weekends. Fixed-rate prepaid and traditional electricity plans often result in lower costs than “free nights and weekends” plans.
The short answer is “no” — often because the “free electricity” hours are offset by higher weekday rates, sometimes at double or triple the cost! Many electricity companies use pricing gimmicks like free weekends to attract new customers. But customers end up paying significantly more per kilowatt-hour for weekday electricity, often with pricey usage and cancellation fees. And if 50% of your power is used during the week, then a free weekend plan will cost more than a prepaid or traditional plan with fixed rates.
Nighttime electricity is often cheaper due to less demand during off-peak hours (typically after 9 p.m.). At night, high-consumption appliances like dishwashers and clothes dryers are typically not in use, and cooler nights mean air conditioners aren’t trying to cool homes in the hottest part of the day. Likewise, industry demand for electricity decreases when businesses or factories are closed for the weekend, resulting in lower costs. However, gimmicky free night and weekend plans often charge much higher daytime rates and result in little or no cost savings overall. Plus, changing your schedule to consistently run appliances overnight to catch the “free hours” can be hard to manage or sustain. Conversely, simple prepaid electricity plans with a low fixed rate, plus smart usage habits, can help you lower your electricity bill.
Competition to power your home is high, so many retail electric providers (REPs) use catchy gimmicks to attract customers: “Free nights and weekends!” or “Pay nothing from 9 p.m. to 7 a.m.!” While these plans may seem attractive, customers quickly discover free isn’t truly free. Companies often recover those costs with higher daytime and weekday rates (sometimes even double the cost per kWh!), higher usage fees, and pricey termination fees. While free nights and weekend plans are popular sales tactics, customers will save more with fixed-rate prepaid or traditional electricity plans.
“Free nights and weekends” electricity plans charge customers nothing for electricity used during their “free” periods. Typical free electricity hours run from 9 p.m. to 7 a.m. on week nights and weekends from Friday night until 11:59 p.m. on Sunday, though designated hours may vary by company or plan. However, companies often offset the cost of these free hours with higher rates per kilowatt-hour for all other electricity used by the customer. Customers could end up paying hundreds of dollars more per year with “free nights and weekends” rather than fixed-rate prepaid or traditional electricity plans.
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