Every summer in Texas, there’s a collective groan as people start getting their electricity bills. It can be downright painful to shell out hundreds of dollars to cool our homes and fuel appliances, devices, and energy-eating apparatuses.
A Houston-based technology company called Energy Ogre is taking aim at high electricity prices using an innovative approach. They take advantage of the deregulated Texas market to actively monitor thousands of offers and match them to a consumer’s actual electricity usage, resulting in maximum savings.
This process happens continually. Energy Ogre updates both electricity offers and customer usage daily to make a match that means big bucks off bills.
Just what kind of money are we talking about? The average Energy Ogre member saves over 40 percent on their electricity bill, says Energy Ogre CEO Jesson Bradshaw. All for about the cost of a monthly Netflix membership.
“The Texas electricity market was deregulated in January 2002, which gave consumers tons of options for choosing a provider, but not a lot of people got a primer of what the rules were and how to take best advantage of them,” Bradshaw said. “We started Energy Ogre because folks weren’t getting the benefits of deregulation.”
Texas electric bills are among the highest in the country. The average Texas household spends $148 per month on electricity, according to a recent report by WalletHub. Only five other states see residents spending more.
The biggest reason we’re paying so much? Sweltering summers. Plus, we’re cooling big houses: In 2015, the average new house in the U.S. was 2,721 square feet, and in Dallas, we’ve got plenty bigger than that. Every square foot takes money to cool.
When the Texas electricity market was deregulated in January 2002, the idea was to empower consumers by giving them access to multiple providers. Market competition was supposed to bring lower prices.
And that has happened. But navigating the many available energy offers can be a complicated endeavor. Lots of people end up settling for what sounds like a low rate. But the devil is in the details.
“We’ve been conditioned as buyers in deregulation to always think ‘what’s my rate?’” Bradshaw said. “But if you look at most of these programs, the vast majority of the offers are not a rate, they’re a curve—different prices for each quantity of kilowatt hours that are consumed.”
That means you might get that great promotional rate if you use between, say, 1,500 and 2,000 kilowatt hours in a month. But fall above or go below? Higher rates. Throw in hidden charges and you’ve got the makings of a monster electricity bill.
Energy Ogre’s computers store electricity provider “curves” based on the actual offers available now. When consumers sign up for their program, Energy Ogre becomes their “limited agent,” getting access to their historical usage of electricity. From this, a demand curve is created.
“We have from 1,500 to 2,000 rate curves in our system, updated every day,” Bradshaw said. “We take your demand curve and run it against every supply curve we have and find a program that best matches your usage mathematically.”
Once Energy Ogre is the limited agent, they make changes on behalf on their customers based on that math. This takes the hassle out of dealing with an energy provider. It also means Energy Ogre often suggests switching from one plan to another to take advantage of a low rate.
“This is all a function of math—we only keep people enrolled in the correct plan with the best renewal cycle, always looking for better options while keeping consumers up-to-date on their current plan,” Bradshaw said. “Sometimes, a $100 early termination fee makes sense if another plan will save you $600 to $700 over time.”
To get an idea of the possibilities, Energy Ogre offers a savings calculator here. The numbers there are based on zip code averages—with a customer’s unique historical data and updates every 15 minutes from their smart energy meters, Energy Ogre can most accurately match supply and demand for big savings.
Since Bradshaw started Energy Ogre in 2013 and started enrolling customers last summer, they’ve built steam. Around 20,000 Texans pay $10 a month for their services. Bradshaw says the goal for 2016 is to hit 50,000.
Energy Ogre is not paid by energy companies for preferential treatment—their only allegiance is to customers. There are also no contracts or extra fees. Just ten bucks a month.
“We want to help people get the value out of electricity deregulation,” Bradshaw said. “Our philosophy here is to help folks and make it work for them.”