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Power Companies Sweeten Deals: Digital Meters Spark New Electric Plans

By: Associated Press |

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 mobile phone companies: Free nights, free weekends and prepaid plans.

The more customized plans are made easier by the growing use of digital meters that wirelessly link electric companies and customers, allowing both to track usage in real time. Digital meters have not only spurred competition, they have also enabled traditional utilities to reduce their costs by encouraging customers to use electricity during off-peak hours. Forty-two percent of U.S. electric customers have digital meters, up from less than 5 percent in 2008. In 2015, more than 50 percent will have them, according to Navigant Consulting.

This new breed of electric plans comes with risks.

Customers can end up paying a lot more for power than they expected. Some plans offer low introductory rates that can quickly skyrocket. Others have high early-termination fees.

If customers are careful, though, they can pay less.

Dorothea Miller of Sinking Spring, Pa. signed up for a Direct Energy plan that gives her one day of free power every week. She picked Saturday, and now saves as much of her housework as she can until then.