Is there a way to auto apply a shipping promotion code to all customers whose price level = "X" ?

Sure. Create a customer saved search which uses your specified price level as the basis. Then create a dynamic customer group based on that saved search. Then when you’re setting up the promotion, use that customer group as the basis for the promotion (under Audience > Specific Customers).

if someone signs up on the website, will the group be updated automatically? how often does the group get updated

Yes and up to 1 hour

Maybe cause im trying it in sandbox, but it doesnt seem like its working for new customers. if someone signs up and they go to checkout page they dont see the promotion applied

Did you wait an hour

its getting updated every 2 hours. But that wont work for me. because i would like a new customer on the site to get that promotion immediately

OK, well feel free to raise an enhancement request.

thanks!