NEW YORK — Electric bills have long been take-it-or-leave-it affairs: Pay one rate for all the power you used the month before, no matter when you used it.
But some electric companies want to shake-up that rigid business model. They are increasingly offering plans that sound like come-ons from phone companies: Free nights, free weekends and pre-paid plans.
TXU Energy offers a plan to Texas customers that offers free power every night from 10 p.m. until 6 a.m., or free power Saturdays and Sundays, in exchange for a higher rate during other times.
Customized plans are most prevalent in the 13 states and Washington, D.C., where regulators have allowed companies to compete to sell electricity. In those states, the number of customers that have signed up with electricity suppliers that offer these types of plans rose to 13.3 million in 2011, from 8.7 million in 2008, according to the most recent numbers from the Compete Coalition, a group that lobbies to expand competitive electricity markets.
Electric competition has been around for more than a decade and utilities have experimented with pricing plans for even longer. But digital meters have made these plans easier to offer and manage. They are being installed around the world; utilities in China, Japan and the European Union plan to expand digital meters.
In the U.S., companies have different motivations for offering innovative plans. Traditional regulated utilities are trying to reduce stresses on their grids. Upstart power providers are trying to lure new customers.
In both cases, they are trying to get customers to use less electricity when it costs more. Wholesale power prices fluctuate depending on the time of day, from zero overnight to thousands of dollars per megawatt-hour during a hot day.
Yet most customers see one average price every month, a price that includes those sky-high peak rates. With plans that offer prices that vary based on the time of day, customers can avoid high-cost power in the same way air travelers can save by not flying on the Wednesday night before Thanksgiving.