Texans Energy creates a new low in market manipulation

Texans Energy, a new power company, has come onto the scene with a seemingly appealing offering that shows up on the first page of Power To Choose offerings.  With Texans Energy, if you use over 999 kWh you get a $65 bill credit.  Seems great right?  There is one big catch though, you don’t get the credit if you use more than 1200 kWh.  You might be scratching your head right now thinking, “what are the chances I’ll be within a 200 kWh range of usage?”  Seems unhelpful right…

Why would they do this?  One reason, to manipulate their ranking on Power To Choose.  As I’ve written about before, Power To Choose ranks plans based on their average kWh cost for 1000 kWh of usage.  That means that even though it’s unlikely that a customer will hit Texans Energy’s narrow range, it’s 100% likely that they will succeed in artificially inflating their ranking on Power To Choose.

What’s next, a $100 credit if you hit exactly 1000 kWh?  That way a company can be assured to be at the top of the rankings while still screwing over it’s customers. Hey Power to Choose! It’s time to change the “rules” so they work for customers and not market manipulators.MiLkAzLgT

Case Study: Accountants Use Energy Simply, Shouldn’t You?

accountant

Herschel is an accountant who decided to research to find his best energy plan. After researching, he decided to become an Energy Simply customer.  Here are some of his reasons:

  • Time – It took multiple hours to research offers, read the fine print, and build a simple model.  Doing this every time his contract comes-up (3 to 6 mos) is not the best use of Herschel’s time; but Energy Simply does this for him.
  • Expertise – While Herschel may be able to amortize a fixed cost like a professional, he’s not an expert in the electricity industry.  Energy Simply understands the tricks companies play to make their prices seem better than they actually are and has a sophisticated proprietary model for finding the best plan for each household’s electricity usage.
  • Monitoring – Energy Simply monitors the electricity market frequently and looks for price changes.  Herschel doesn’t check as often and may be missing-out on opportunities to switch providers if a better deal becomes available.

Energy Simply’s new web tools help Texans save on electric company bills

“On average we can save Texans $50 every month, but we’ve saved some of our customers much more.” -Jordan Hobfoll, Energy Simply President and CEO

Energy Simply, an energy services company dedicated to helping Texas consumers choose the right electricity plan, debuted dynamic new tools for its web-based services. The enhancements include a Savings Calculator, Explainer Video and How it Works Page, as well as a streamlined sign-up process.

Choosing the right electricity plan is confusing and time-consuming. Retail electric companies make it even more difficult by offering teaser rates and expensive fees. Energy Simply takes the pain and frustration out of choosing the right plan by doing the work for their customers. Energy Simply employees use proprietary modeling to constantly sort through thousands of electricity plans, choosing the perfect plan for each of their customers – either the cheapest or cheapest 100% renewable based on customer preference.

“Our new explainer video and web tools make our services even easier to understand and access,” said Hobfoll. Consumers can go to http://www.EnergySimp.ly to view the minute and a half, animated video, use the savings calculator and sign up.

If You Just Use Power To Choose…Chances Are You’re Paying Too Much

Does this sound familiar? You want the cheapest (or greenest) energy provider, so you go to The Power to Choose website to find a new plan.  You have a medium-size house, so you can assume the first plan that comes up with the “lowest” price in big letters is the best choice, right? You sign up and feel great about the savings, but…you’ve just played right into the power companies’ hand and are still paying too much for energy.

Power To Choose Website screenshot of supposedly lowest priced plan

Surprise! EnergySimp.ly’s research team has discovered that the companies are gaming the system.  Energy companies have figured out that Power To Choose and every other power plan comparison site uses the same benchmark (1000 kWh per month usage) as the key plan ranking point, and they take advantage of that by artificially lowering their prices at that exact benchmark. Use more or less than 1000 kWh? You’re going to pay more than the advertised price.

For example,  Gexa Energy, the company featured in the Power To Choose screenshot above.  While it appears they are $0.6¢/kWh (~$70/year) cheaper than the third listed company, Discount Power, what isn’t obvious is they are using Hocus Pocus to make it seem that way.  Hocus Pocus here means higher per kWh energy charges and a $30 credit that you receive when you hit the “magical” 1000 kWh threshold.  The result is their average kWh cost is at it’s absolute lowest point at the 1000 kWh threshold, and that is what Power to Choose displays.

Our electricity usage varies significantly throughout the year.  We use more power in the winter and summer, when our heat and A/C is running, and we use less power in the spring and fall when we don’t need to use to heat or cool our homes. So- your average power usage doesn’t matter.  What matters is what your actual usage will be over the term of the contract you are signing up for. Here’s what a typical usage pattern would look like using the two plans shown in the screenshot above:

Power To Choose comparison of the 2 plans shows Gexa Energy cheaper

Energy Simply analysis using varied monthly usage of a typical household shows 4Change much cheaper

Gexa Energy appears cheaper in the first graph using just what you’d see as the headline kWh cost on Power To Choose.  But typical month-by-month household usage tells a different story.  Discount Power is cheaper than Gexa in 5 of the 9 months.  And ridiculously Gexa is 1.5¢/kWh (~$15/month) more expensive in the 2 months when a typical household would not be projected to hit the magical 1000 kWh and therefore would not receive the Gexa Energy $30 credit. Over the 9-month contract term, a typical household would spend ~$40 more with Gexa Energy’s plan.  That’s $40 that should be staying in your pocket.

The example above compared 2 of the “Top” plans and the difference was $40.  If you are not in a top plan, like the majority of Texans, you are overpaying by far more.

So what can you do?

Well, you could spend hours every 6 month figuring your actual usage and then search painstakingly for the best price that matches your actual usage.

Or… let Energy Simply find you the best plan using your actual usage profile.

Our Power Plan Ranking page can be used to find best pricing for homes similar to those in your area. Check it out and then email or call us.

We don’t work for the big power companies that are gaming the system to charge you more. We work for you – call us today!