TXU, Reliant exploring rate ideas linked to daily peak, off hours

DALLAS, TEXAS - Two electricity providers will soon introduce new pricing plans that offer savings for using electricity when it is cheaper for the companies to provide.

Reliant Energy introduced a pricing plan that tracks natural gas prices.

And TXU Corp.'s retail arm, TXU Energy, plans to launch a time-of-use pricing plan sometime this year that would charge a higher price for electricity used during peak hours.

Meanwhile, TXU will launch on Jan. 31 a pricing plan that includes a free electricity monitor that customers can use to watch their daily electricity use and set a strict budget.

"A lot of it goes into the way people want to be served," said Matthew Benner, senior vice president of retail marketing and operations for Reliant. "Are you price-conscious? Are you risk-averse? Do you want stability in your monthly payments? Do you want to take advantage of trends?"

The new plans come during the first month of full deregulation in Texas and mark examples of the innovation that policymakers have anticipated.

Reliant's new pricing plan, called PowerTracker, rises and falls each month with the volatile natural gas markets.

With natural gas prices at winter lows, the plan kicks off at 10.3 cents per kilowatt hour for customers in North Texas. That's cheaper than any other pricing plan listed on the Public Utility Commission's Power to Choose Web site.

"This product is clearly not for people who need level bills and low risk," Mr. Benner said. "In a state like Texas, where a lot of people understand energy, and work in the industry, there's a lot of folks who know when this makes sense for them and when it doesn't."

And TXU's pricing plan that comes with a free energy monitor that will allow customers to observe their electricity use minute-by-minute.

The next step for TXU is to include the energy monitor with a time-of-use pricing plan sometime this year. The company is testing such a plan in a pilot program.

The pilot program charges 29.8 cents per kilowatt hour during peak times: 1 to 6 p.m. weekdays during summer months. All other times are off peak, at 11.9 cents.

TXU spokeswoman Sophia Stoller said company officials will reset the prices to make them more competitive. Currently, other companies are charging less than 11 cents per kilowatt hour all day long.

Also, Ms. Stoller said, before a full launch, TXU must install special meters that can collect customer usage data.

The energy monitor and the time-of-use plan are meant to help customers become more mindful of the amount of electricity they use and when they use it.

Wholesale power is typically more expensive during the afternoon, when demand is strong and generators are going full-tilt.