CLEVELAND, Ohio — Energy shopping in Ohio has become increasingly easier over the past two decades, but saving money? Not always so easy.
A deregulation pioneer claims that using his “big data” driven ReallyObjective energy index will help choose suppliers and save you money.
Many consumers who have been coaxed away from the standard choice offer of the traditional gas company or the “price to compare” offered by their electric utility end up losing money in the long run.
This typically happens because they don’t pay attention when the independent supplier they have chosen puts them on an exorbitant monthly variable rate. It can also happen in a more benign fashion — market prices change over time.
Market volatility has even affected municipal aggregators, single cities, or associations such as the Northeast Ohio Public Energy Council, which for years has negotiated fixed-rate contracts with a single supplier.
Even NOPEC, the largest aggregator in the nation, now negotiates prices for shorter time periods, often on a quarterly basis, in an effort to drive up consumer savings.
With the Internet-based company, ReallyObjective.com, it says it has devised a system that can keep up with marketers and price volatility. And in some cases, especially electric rates, ReallyObjective appears to offer the lowest price over time.
ReallyObjective claims to be, well, really objective. It’s a digital shopping tool that checks thousands of prices daily on the websites of gas and electric suppliers and automatically switches a consumer’s supplier monthly. And it’s not aligned with any energy company.
For a rough idea of savings, a consumer needs only to provide a zip code and the name of the delivery utility, such as the Illuminating Co. or Dominion East Ohio. For a more exact estimate, a consumer would have to provide an account number.
“We have the ability to pick the best price for the consumer every day,” said Lance Schneier, ReallyObjective’s founder and a long-time energy marketing expert.
Schneier is a lawyer and entrepreneur who left a prominent Columbus law firm more than 30 years ago to create independent gas and electric companies when utility deregulation was in its infancy.
“The data is analyzed daily,” he said of the supplier prices and teaser rates. “But the utilities cannot switch you within a billing cycle,” he explained. “So, at a minimum it [the switch] has to be monthly.”
What about those pesky fees suppliers charge to break a contract?
Schneier said ReallyObjective won’t switch you if a contract’s early exit fee would eat up the savings of a lower price. But it would not rule out such a switch if the program determined a consumer would ultimately save money.
ReallyObjective has been in testing mode for 18 months, he said, using the utility bills of friends and family.
“We have reduced bills of both gas and electric [bills, together] by $150 a year,” he said. “But the average within Ohio may be somewhat less. Some homes may be larger than average. This does not include apartments.
“It’s an optimization. The art of the possible is [switching] three to four to five times a year,” he said of the company’s experience during the testing period.
There is, technically speaking, no fee to enroll your account in ReallyObjective. But the company will collect half of what its software indicates you have saved. Also, it will donate 5 percent of its share of savings to a charity of your choice.
“We anticipate we would probably bill three or four times a year,” said Elizabeth Conlisk, a company spokeswoman, notifying customers that it would charge their credit card.
Schneier estimates that if consumers statewide enrolled with the company, the savings would amount to $210 million, and the company would be donating $10 million to charity.
Though the roll-out of the software is aimed at consumers, it can also be used by small businesses, he said.
The Public Utilities Commission of Ohio certified ReallyObjective as an aggregator/broker for gas and electric customers.
Schneier said he demonstrated the software to staff at the Ohio Consumers’ Counsel.
Consumers’ Counsel Bruce Weston did not endorse ReallyObjective but said it could save money.
“The service … could save money, but consumers who enroll should still closely monitor whether the program is producing benefits for them,” he said in a statement.
Another option, he added, is to consider rates offered by government aggregators.
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