The problems with Power To Choose

It is August 2018 and the new Chairwoman of the Public Utility Commission of Texas (PUCT), DeAnn Walker, has asked her staff to investigate potentially misleading plans on Power To Choose. Here are a couple stories from June, as covered by the Dallas Morning News and the Houston Chronicle.

A few suggestions have been made by the PUCT staff but none get to the heart of the matter. BTW — the plans they intend to filter on the default search results are usually the cheapest plans. Power To Choose has some of the cheapest plans in Texas, but these cheap plans are incredibly hard to find and even harder to compare on an apples-to-apples basis. The site’s fundamental design and search methodology is inadequate and dated, and fails to capture a user’s individual usage profile and the complexity of modern day electricity plans.

Power To Choose is broken in 3 key areas

1. Plans are not verified for accuracy

2. The search methodology is flawed

3. 500, 1000, and 2000 kWh rates displayed are mostly useless

1. Plans are not verified for accuracy

At Real Simple Energy we read the fine print of every plan and recreate the rate formulas in our system. More often than you would think, displayed rates don’t match the actual details of the plan when you read the fine print and do the math. It appears the PUCT is not verifying that every plan does what it says it does. Additionally, displayed rates on Power To Choose may say rates are one thing but when you click on the link to sign up, you could be directed to a page with similarly titled, but more expensive plans.

2. The search methodology is flawed

Power to Choose (and virtually every electricity search engine on the internet) is searching for plans all wrong. Very little attention is paid to the particular usage profile of the individual searching for a plan. There are ways to filter and rank plans by their rate at exactly 500, 1000, and 2000 kWhs but as I explain below, this is pointless. Essentially, Power To Choose is saying that most plans fit all people, which is false.

For example: The best plan for someone in a studio apartment will not be best plan for someone in a 5,000 sqft home.

For example: The best plan for someone who works all day and is only home at night will not be best plan for household with someone home most of the day.

3. The 500, 1000, and 2000 kWhs rates displayed are mostly useless

Electricity pricing is very complicated and a long time ago Power To Choose decided the best way to show the rate of a plan was to display the effective rate at a given point in time, during a one month period. They decided to display and sort the rate a customer would pay if they use EXACTLY 500, 1000, or 2000 kWhs in a given month. But if a customer’s usage happens to be a little more or a little less, like 950 kWhs or 1,050 kWhs for example, the effective rate is likely to be VERY different.

The problem is electricity providers game this system by devising creative rate structures that often make plans look cheap but are actually very expensive. This means displayed rates at 500, 1000, and 2000 kWhs on Power To Choose are mostly useless.

Here is an example of a real-life plan recently on Power To Choose exhibiting this type of tricky rate structure (name withheld):

Real Simple Energy has solved these problems!

Real Simple Energy has already solved these problems and is helping consumers every day with our powerful search tool.

Honestly, I don’t think Power To Choose should be responsible for solving all of these problems. I believe this complicated work is beyond the mandate of the Public Utility Commission, who maintains Power To Choose. That being said, Power to Choose should not limit the creative rate structure of plans. Certain plans benefit certain users and having a one-size-fits-all rate structure means some customers are effectively subsidizing others. These are complex solutions to a complex problem. A problem the private market has already solved.

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Trent Crow is a former wholesale power trader and the Founder of Real Simple Energy

Trent Crow for Real Simple Energy

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