Compare Electricity - Index Rate Plans

So I've FINALLY picked a new electricity plan after my last fixed rate contract expired several months ago... After shopping around for a little while, I decided to go with an indexed rate offer from Reliant, called the "Reliant PowerTracker".

Similar to variable rate plans, index rates can vary from month-to-month.  This sounds scary upon first glance, however, index rate plans provide more insight into the price that you'll actually pay each month.

Whereas variable rate contract language may state, "After the initial rate, your next bill's rate is up to sole discretion of Retail Provider X", an index rate is one in which the price you pay for energy is tied directly to the price of some energy market index, in this case the last settled price of the NYMEX Natural Gas Futures Contract.  This allows you to receive a "heads-up" on the direction in which your final cost of electricity is going.

In order to get to that final cost, we have to add one more pricing component to the ones that I've covered previously:  An Indexed Energy Charge.

This charge is calculated using a predefined Gas Multiplier (as outlined in the rate offer):

Notice that in the screenshot above from the Reliant PowerTracker product, the Gas Multiplier is defined at four different times of the year.  Why is this the case?  I'm not certain, but from what I can tell, the multiplier is basically higher during the hottest months of the year (June-September).

The only other retailer besides Reliant to offer another indexed rate plan is TXU, called the "TXU Energy MarketEdge".  Their Index Energy Charge is calculated in the same manner, but using just two different Gas Factors (or Multipliers), again depending on the time of year:

Taking into account this index energy charge, the calculation is simply a matter of including that with the base charge, kWh energy charges, TDSP charges and monthly kWh usage to get to your final bill.  Here's the Reliant screenshot outlining the calculation:

On a related note, TXU Energy's recent "No Vari-a-Bull" rate marketing is interesting because it appears as though they are trying to distance themselves from variable rate plans in general, even though their "MarketEdge" product, being an indexed plan, is basically variable as well (changes from month-to-month).

However, to their credit (being an indexed plan), since each month's price is clearly explained (as shown in the screenshots above), their most variable product will not suffer the surprise expiration of a typical variable rate's initial promotional teaser price as exists with other retailers.


Anyways, with summer approaching soon, I'm pretty close to switching to a fixed rate again (yes, after just a few months with the indexed plan), but with natural gas prices near 10-year lows, perhaps it's now best to lock in a rate.

Electric Space Heaters - Are They Cost Effective?

As winter ends and spring approaches, I wanted to write a quick note about electric space heaters.  In particular, I want to review the costs behind running a few of the ones that we have in our home.

During last year's Thanksgiving holiday weekend, Lowe's had a deal ($50) for this electric "stove" space heater (complete with fake flickering flame!).  We already had these oil-filled radiator electric space heaters in the kids' bedrooms (bought 2 for about $60 each) and I was just looking for something for the master bedroom.

Our home is heated mainly from a central gas unit (we set our thermostats at 74 degrees), however I use the oil-filled heaters to set a more even and consistent temperature in the bedrooms, but only at night and typically when outside temperatures dipped into the 50's and below.

The Honeywell oil-filled units were especially nice due to the digital temperature controls and LCD display of the current ambient room temperature.

The Duraflame heater basically acts (and sounds) like a hair dryer, just blowing air over a heated coil, albeit more quietly.

The main difference between the two heater types, that I've noticed, is that the air doesn't stay as consistently warm with a "blower" based electric heater, as opposed to an oil-based radiator which seems to retain (and thus radiate) heat throughout the air space more effectively.

Anyways, back to the point of this post... I used the Kill-a-Watt energy measurement device to figure out how much energy these heaters used, on the same night (outside temperatures were in the 50's).

I set the Honeywell oil-filled heater to "level 1" (lowest power setting) at 75 degrees and the Duraflame air heater to about halfway (unfortunately, there is no temperature or power settings, just on/off and a power dial).

Over a 12 hour period, the oil-filled radiator consumed about 0.8 kWh per hour, so over the course of 12 hours at 10 cents/kWh, that added up to about $1 for the night.

The air heater consumed about 0.4 kWh per hour, which added up to about $0.50 for the night, using the same time period and price/kWh.

I probably could have turned up the air heater a bit more (than halfway) to make the room feel as comfortable as the oil-filled radiator did, which would most likely have caused the air heater's electricity consumption to go up.  It's rated at 1350 watts, so if I were to run it the whole night at that top setting, it would cost about $1.62, although running it at the max sounds like overkill.

On that note, I've got 2 oil-filled heaters, and running them over the month of January cost us about $60.  Adding the air-heater (about $15), brings the total for electric space heating in my home to about $75.

Central gas heating cost us about $110, which is not too bad in a typical Dallas-area January, but considering how mild it has been this season, I wonder if this could have been better.  Note that this cost is also for all-day heating, not just at night.

What I would love to do (contingent upon the wife's blessing) is to turn off the central gas each night for a month and use only space heaters in the bedrooms.  Then, in another month use only central gas each night and compare the two costs.

Making comparison a bit more difficult, however, is finding the right months that will have very similar weather and follow the same daytime energy usage (TV, lights, laundry, etc.) patterns in both months, so not to skew the results.

Now that it's already March, I'll simply shelve this for some time and revisit this experiment in the late fall this year... try and remind me if you're interested.