If you’ve lived in Texas for any length of time — or simply watch television on a regular basis — you’ve seen advertisements for certain retail electric providers offering free electricity. This deal, commonly known as free nights and weekends plans, allows residential electricity customers to use power for free either all night, every night or for the entire weekend.
Such plans were initially regarded as a classic case of “sounds too good to be true.” However, enough people have signed up for them in the past few years that many Texas energy companies have created several different versions of the original concept. We decided it was time to discuss the four primary elements of these offers:
- The original idea behind these plans
- What free really means
- What free does NOT mean
- Your home energy usage makes the difference
As always, we want to give you the necessary information so you can make the right decision for your home and energy bills.
1. Creating Time-of-Use Plans was a Good Idea
Free nights and weekends plans originated from a concept in energy circles called “Time of Use.” The earlier versions of such plans were created as a way to subtly encourage residential energy customers to shift their electricity usage away from 3 to 7 p.m. every day. Known as “Peak Demand,” it’s the time of day when people consume the most electricity on average.
The idea was rather simple:
- If too many people use too much energy during Peak Demand — especially in the heat of the summer — it would create more demand than supply could provide.
- This imbalance of supply and demand could create increased stress on our aging electricity grid, which could lead to brownouts and blackouts.
- If consumers could be incentivized to voluntarily shift their electricity usage to “off-peak” times of the day, it would reduce demand, grid stress, and energy prices.
Many of these earlier time-of-use plans created two price tiers:
- A lower energy rate during the hours where electricity was less in demand
- A higher rate for energy used during high demand times.
It was very much a “carrot and stick” sort of scenario, wherein the energy industry hoped to coax people to use energy in different ways.
However, retail electricity providers quickly realized that customers didn’t understand these time-of-use plans. They were hard to wrap your head around if you weren’t used to talking energy all day, and the incentive of a lower energy rate just wasn’t enough.
This is where free nights and weekends electricity plans entered the picture.
2. The Free Hours of Electricity are Actually Free
The hours advertised as “free” on popular free nights and weekends plans are truly free. You won’t pay charges to your electricity company during those free hours. But what electric companies often don’t talk about are the additional charges you will pay:
- Transmission and distribution charges for the utility company to physically deliver the energy to your home
- Base charges if you don’t use enough energy during a billing cycle
- The other fees and charges that typically appear on your bill, regardless of your usage
If you read the Electricity Facts Label (EFL) for one of these plans, you’ll see that it’s not a classic bait-and-switch. The free hours really are free, but you have to pay close attention to the details to understand what “free” really means.
Confirm the times
If the free hours are 10 p.m. to 7 a.m. every night, it will be very difficult for the average family to shift high-usage activities to those times. You need to be very clear on the available hours for the plan so you know how to use them in a way that helps you lower your electricity bill.
Talk to the company
To truly understand the terms offered by the plan, you should talk to a customer service representative for the electricity company that interests you. If they want your business so badly — and they do — the person you talk to should be able to answer any and all of your questions about what’s free, what’s not, and what an average bill should look like. The more information you have, the better choices you can make.
3. The Other Hours Come with a Much Higher Rate
We present this fact not as a scare tactic, but as reality. The rate per kilowatt-hour you will actually pay during the non-free times is much higher than the rate of a typical fixed-rate electricity plan. That’s the point of these plans — to shift your usage away from Peak Demand by charging you very high rates for what you DO use during those times.
It’s also the part that electricity companies don’t talk about openly. It’s much more interesting to talk about the positives — all that free electricity — than the negatives (the high rates you’ll pay when your electricity isn’t free).
This is the lesson energy companies have learned about time-of-use plans: Selling free electricity is much easier than selling split rates. But while it makes sense from a marketing perspective, it’s still created confusion for customers when they see that first bill on their new “free electricity” plan.
Read the fine print
This old adage remains true, even if people skip it more often than they should. For electricity plans, you need to read the aforementioned EFL. That document will contain specific information about the following:
- The times you get free electricity
- The rate per kilowatt-hour for the non-free electricity
- Estimated percentage of your usage that occurs during free and non-free times
- The additional fees paid to the electricity company
- The rates and fees paid to the utility company
You should read this essential information for any electricity plan, but definitely for a plan that offers you a potentially confounding rate structure.
Check your old bills
What that fine print won’t tell you is an estimate of what you might pay. That’s why you should review some of your old bills to gain an average of your monthly energy usage. From there, you can use the fine print to estimate a bill:
- Percentage of usage in normal times x energy rate
- Usage x utility company rate
- Amount 1 + amount 2 + other fees = estimated bill
This will be an estimate, but doing some math based upon the details on your EFL will give you a good idea of what you might pay with this new plan compared to your old one. Checking your old bills will also give you an idea of the utility charges you’ll see on your new bill, as those won’t change by switching to a new plan or new energy plan.
4. The Success of These Plans Depends Upon You
This “fact” might seem to be more of a truism, but it’s still the most important consideration of whether or not one of these plans is right for you. You have to pay close attention to the core aspects of the plan for it to work for you:
- Free times
- Non-free times
- The rate for those non-free times
You don’t want to get stuck with a high bill because you weren’t able to shift your usage to the free times.
Review your schedule
This is the big one. If the daily activities of your family make it hard to use more electricity during free times, then your free electricity won’t help you. Additionally, even if everyone is out of the house for school and work each day, you’ll need to turn up your air conditioner to a high setting (or off!) during the day since that appliance is a big draw on your daily electricity usage.
The people we’ve found who’ve had the most success with these plans are ones who are out of the house all day, live in small apartments, and don’t get back home until after free electricity begins. Their schedule compels them to do their heavy usage chores during the free times because they’re literally not home during non-free times and their air conditioner has a very small space to cool.
In short, you must compare your daily routine to the hours of your plan to see if it makes sense for you.
Review your usage
Remember earlier when we told you to check your old bills? We’re repeating that tip here with a specific recommendation to look at your usage. These free nights and weekends plans will only save you money if you learn how to first use less electricity and then shift your usage to the free times of your plan.
Just because some of your usage will be free doesn’t mean these plans are magic. More than ever before, you’ll need to watch how and when you use electricity so you don’t use lots during peak demand times.
Free is Free — Until It Isn’t
Free nights and weekends plans aren’t “set it and forget it” types of electricity plans — at least not until your new usage patterns become ingrained habits. These plans have many benefits and perks, but only if you pay attention to all of the moving parts. And even then, you need to pay attention to your usage so you don’t get slammed by high rates during the non-free times of your plan.
To take true advantage of the free electricity offered by such plans, we recommend the following course of action.
- Choose the plan with the maximum amount of free electricity.
- Move as many high-usage tasks to those free times.
- Air conditioner usage
- Reduce your usage during the non-free times as dramatically as possible, especially turning up your air conditioner when you’re not at home during the day.
- Be prepared to be warm at home after work and school until the free electricity times start.
Because free electricity is great — except when it isn’t.