(TNS) -- Some 16 years ago, Texans got the Power to Choose their electricity supplier but landing the best deal is still as confusing as finding the cheapest airfare.
Now, a group of entrepreneurs are trying to cash in on the frustration, seeking to correct what they see as a flawed, inefficient system -- the website that lets customers choose their energy supplier. These companies offer expert recommendations -- often for a price -- that they promise would help customers save money on electricity bills.
“There’s so many factors to consider in a plan that there’s just not an effective way to do it without knowing your exact usage or having a good predictive model of what your usage should be,” said Michael Hays, co-founder of Coppell-based Awesome Power. “Power to Choose isn’t built that way.”
These new electricity shopping services -- which started opening in 2015 -- uses computer models to analyze a customer's electricity consumption patterns to predict their future usage and find the best plan from among hundreds of choices offered by dozens of electricity suppliers.
This new generation of companies includes Houston-based Energy Ogre, Dallas-based Energy Choice Experts, Awesome Power and Plano-based kiloWhat.energy. The biggest of the bunch, Energy Ogre, has 30 plus employees and office space, while the others have one or two staffers. The customer bases is still relatively small compared the giant Texas energy market, one of the largest in the country.
A combination of factors have made these businesses possible, including the deregulation of the electricity market in 2002, easy access to cheap computing power and the widespread adoption of smart meters that allow consumers to download their electricity usage and see it in as little as 15-minute increments.
Electricity providers have long held the advantage by tweaking prices on the middle range of usage to make their plans rise to the top of the list. Often price jumps significantly if more or less electricity is used, making it difficult to figure out which deal is right for which month. Then, there are fees for using too little electricity or flat fees for certain tiers of usage.
Terry Hadley, a spokesman for the Texas Public Utility Commission, which created the Power to Choose website, said there are no plans to duplicate these kinds of services. He said the PUC website strives to be an unbiased source for consumers, and these features could be seen as endorsing particular suppliers.
What about bias at energy shopping services?
That bias issue is something owners of the free sites - Awesome Power and kiloWhat.energy - acknowledged. Both companies make money through commissions from the electricity providers but say they don’t skew their algorithms.
The owners of both companies said their computer code analyzes electric plans and matches customers based on their expected usage. A lot of factors go into figure that out: actual data, typical usage and even climate forecasts. When the best plan recommendations are emailed to customers, they would have an option to click on a link to sign up for one of those plans.
If the customer uses one of the electricity supplier would pay the energy shopping website.
At Awesome Power, Hays said he includes almost all the deals found on Power to Choose; only the most confusing ones are excluded. And, Hays said the recommendations also include plans where Awesome Power doesn’t get paid.
On the kiloWhat.energy website, the research only includes companies that pay the site a commission. Owner David Manz said he chooses from some 50 of the more than 300 plans available on the Power to Choose website.
“I’m not trying to steer anyone toward one plan,” he said. “I’m trying to get as many electricity providers as I can onto my site. Some of them are happy to do it. Some of them who don’t benefit from the level of transparency I offer don’t really want to have anything to do with my site.”
Energy Ogre and Energy Choice Experts are both paid sites and they say that's the only way to be truly independent.
“We don’t take anything from the retailers,” said Jesson Bradshaw, CEO of Energy Ogre. “That’s the only way to be agnostic.”
Energy Ogre charges $10 per month but offers more services, including signing up customers for the electricity plans and acting as a go-between with the provider. The company also switches its customers more often than some of the other services to make sure customers pay the lowest possible rates.
At Energy Choice Experts, the cost is $35 for the first year, and $30 a year for renewals. Company co-founder Scott Hundley said he doesn’t have the same level of customer service. But he said he charges much less and offers a thorough analysis of deals.
R.A. “Jake” Dyer, a policy analyst for the Texas Coalition for Affordable Power, which advocates on behalf of cities and other governments, said his organization supports Power to Choose since it has a public mission. With these new services, he said, it’s difficult to “part the veil.”
“You don’t know what goes into the algorithm,” he said. “You don’t know if it’s a pay-to-play situation...There’s a lot of unanswered questions with regards to any for-profit website.”
Dyer said an analysis of Power to Choose shouldn’t just focus on the negative.
He said that complaints about electricity providers are much lower than they were in 2008 or 2009. There have also been changes to the website to weed out some misleading deals. And customer searches can exclude time of use plans (such as free nights or weekends) or plans with minimum usage fees or credits, both of which add to a deal’s complexity.
“The problem isn’t the Power to Choose website,” Dyer said. “It’s the complexity of the market.”
Hadley said the PUC has changed the site over the years to make it more useful. And the PUC has blocked electric plans that appeared to be misleading.
TXU Energy has pushed back against some of the energy-shopping companies on its website and questioned the safety of people’s confidential information data and whether they can guarantee savings.
Susan Chadwick, who lived in Southlake before moving to Richardson, missed the deregulation revolution. In her old home, she was part of an electric co-op for about 20 years. About 25 percent of Texas still has a closed, regulated electricity market.
After her move in 2015, Chadwick said she was hammered by high electric bills that she just chalked up to her new house. She said she signed up with TXU Energy without thoroughly studying all that company’s plans or its competitors.
Eventually, she heard about Energy Ogre on a TV news broadcast and used that to find better deals. Now retired, she said she’s using twice the electricity and paying less than she was a year ago.
“When you’re working, you don’t have time to do that much research,” Chadwick said. “I wasn’t very good at looking around.”
Dyer said there’s a risk in either approach. But he said that with a little research, the average customer could find a good deal without the help of these new services.
“If your expectation is that you want to find the perfect deal, who knows?” he said. “But I think the Power to Choose website is a reasonable tool to make reasonable decisions.”
©2017 The Dallas Morning News Distributed by Tribune Content Agency, LLC.