Picking an energy supplier for your home is not for the faint of heart. It takes time. It takes a lot of phone calls.
Outside of Texas, the most deregulated electricity market in the U.S., the process of choosing an electricity supplier is opaque. Most people aren’t even aware they have the option to switch unless they’ve received direct mail from competing suppliers or have seen clean energy suppliers educating people at farmer's markets (as happens in New York City). The result is that many people are paying higher rates than they need to.
There are endless young companies that want to help the average consumer understand and cut their home energy use -- and now there is a new entrant that wants to focus on rates, rather than consumption.
“Navigating the different state regulations took nearly a year alone,” said Michael Jordan, co-founder of forgitit, a startup that focuses on getting people the best rate while also providing some basic consumption information. “If you’ve never done it, you don’t know how to do it right,” he said of the process.
In other areas of our lives, we are spoiled by websites such as Kayak that allow us to search multiple offers for the same service. Outside of Texas’ public utility commission website, the experience when it comes to energy is far different.
Forgitit takes commercial-level energy brokerage software and tweaks it to the residential market, and then tweaks it further to meet the regulations of each of the fifteen deregulated states.
Let’s take a look at New York, where this reporter lives. The “Power to Choose” website from the Public Service Commission is wonky and clunky. There are rates and basic information, but from there you still need to pick up the phone and call. Also, unlike Texas, most states do not require residents to choose their provider every time they move, so the default choice is rarely challenged.
For $30 per year, forgitit sees its service as a convenience. “You can be at yoga while we’re working for you,” said Jordan. For instance, if you’re enrolled in a six-month rate, when those six months are up, forgitit will automatically shop around for you for the best rate instead of, for example, allowing you to be automatically enrolled in a higher default rate bracket. In New York, Jordan noted that most residents could save about 25 percent from opting out of the incumbent utility’s default rate.
The path to market will be difficult when most people don’t even know choice is available. Jordan said the company is currently focused on partnerships with real estate companies to offer the service at the point of sale or lease of a home.
The service also comes with a web portal where customers also get energy efficiency monitoring, real-time bill monitoring and an energy benchmark score. Some of those capabilities are also increasingly being offered by utilities, usually through partners such as Opower or Aclara. "Set it and forget it" is also the approach of some other energy startups, most notably EcoFactor, which makes many small adjustments to a smart thermostat to save energy. Ultimately, forgitit doesn’t see itself as a competitor to these other companies because of its focus on rates.
Although all of the 15 deregulated states are potential targets, the startup is going to initially target the mid-Atlantic region, where it is based. From there, forgitit hopes to expand up into the Northeast. Unlike Texas, “the less mature markets -- they’re actually to our advantage,” said Jordan. The company hopes, however, that the deregulated states are mature enough that customers will find a need for its product.
The sales pitch to potential customers: