Category Archives: Texpo

Some Facts about Pennywise Power & Reliant Energy: Part 2

Posted on by
4

In Part One of my article discussing the relationship between Pennywise Power and Reliant Energy, I took a look at how the two separate brands are actually tied together as one company. I also identified why their relationship is different than other REPs in the Texas electricity that have the same energy conglomerates as a parent company. In Part Two, below, I’m going to speculate as to why Reliant might benefit from having a separate brand in Pennywise Power, as well as what it means to consumers in Texas.

Flexibility in Marketing

One guess I might make to the advantage of creating a new REP is marketing. Which on the surface seems silly because Reliant already has every marketing advantage. But take a closer look at Pennywise Power and their message, and maybe there’s another reason. I’ve been critical of Reliant in the past about some of their highly marketed plans that are extremely over-priced compared to the going market rates. Well, one of the reasons I think Reliant can get away with this kind of thing, besides the fact that people don’t read the fine print, is because Reliant can charge higher prices and people will pay because of the perception of their stability and brand recognition. Any company that can charge more for the same product and still get customers would be foolish to not take advantage of that, right?

For example, a brand new REP not affiliated with Reliant could potentially compete at lower prices with the rest of the market without raising questions about how some plans can be offered at much cheaper rates from one place to the other. In other words, why say Reliant can offer a 12 month fixed rate for 9.9 cents kWh, while the same plan at Pennywise is advertised at 9.0 cents kWh (as of the rates listed by both companies on 10/19/2011). And this is despite the fact that Pennywise and Reliant are the same company, with the same officers, and the same addresses. But operating as separate entities allows them to sell the same plans at different prices despite the fact the costs are the same for both companies.

Customer Complaints and Statistics

There’s a common perception in the deregulated electricity space that there is an inherent risk in chasing high-risk customers with low credit ratings. For starters, there is the obvious concern that they might not pay their bills. Some people would also suggest that high-risk customers are also the ones that are most likely to file complaints with the PUC. I don’t know how accurate this perception is, but I do know that many REPs have tried to market to at-risk customers and most usually end up walking away. Some REP’s have moved into the Pre-Paid electricity market thinking it will become an effective way to take the risk out of catering to at-risk customers.

Additionally, PUC complaints and public perception are starting to play a larger and larger roll in how customers shop for their electricity provider. And in my opinion, that is a great thing, not only that more people are taking an active part in the deregulated electricity market but also that REPs are paying attention and being held accountable.

But the thing is, because Pennywise Power is operating under a separate PUC certificate, none of the complaints customers are making are being attributed to Reliant Energy. They all get attributed to Pennywise Power. Which would normally make perfect sense, except for the fact that the complaint contact for both companies is the same person, right down to their identical addresses and telephone numbers listed on each PUC certificate. Other companies that operate with multiple names such as Texpo (a.k.a. Southwest Power & Light, YEP) all share the same certificate, so all the complaints get pooled to the same place. Not so with Pennywise despite, again, having the same officers listed for both companies.

As a result, Reliant could utilize Pennywise Power to specifically market to a riskier customer base that might be more prone to file PUC complaints. And if a high amount of complaints do come across as a result, well, the Reliant brand remains untarnished.

I think this is all pretty interesting. At the very least, the existence of Pennywise certainly lessens the amount of PUC complaints that are filed directly against Reliant, which makes their complaint record look better. Additionally, it might also come into play in regards to their Better Business Bureau rating. Whether or not Reliant is deliberately chasing riskier customers and mitigating the risk of customer fallout in the form of complaints, I cannot say with any certainty. But if that is what they are doing, well, I definitely think it is extremely clever.

Final Thoughts

While definitely a cunning move, perhaps a better question might be whether it is an ethical practice. Reliant/Pennywise certainly aren’t doing anything illegal here. But should it be legal? Why should an existing electricity company be able to start another REP to do the exact same thing, namely sell retail electricity? It’s one thing for a company like NRG, with massive and diverse assets and energy resources, to buy Reliant and Green Mountain independently and let them continue to operate separately. But I think it’s quite another for a specific REP to create another brand out of thin air which does the exact same thing as the parent company (Reliant). And just to be clear, Pennywise was licensed in 2008, a year before NRG purchased Reliant in 2009. So this was a deliberate action started by Reliant, not something put in motion by NRG.

Personally, I think customers should be asking why a company like Reliant would do something like this with Pennywise. What benefit (if any) does it create for the consumers? I personally can’t see any benefits to Texans. But I can definitely see how it can create more confusion, something this market hardly needs. And I definitely question whether a company should be allowed to create shell entities using the same infrastructure without being attached to any of the liability in regards to public perception or PUC complaints.

Again, this is all speculation on my part, but I would like to understand why a company that specifically sells retail electricity to consumers would need to start another company to do the EXACT same thing, using the same infrastructure, the same company officers, but simply a different name. Consumers should be asking themselves what a company like Reliant has to gain using this strategy. What they can’t accomplish as Reliant that they can as Pennywise? And what are the odds that this move is in the best interest of consumers?

And if I am the PUC, who has the responsibility of looking out for the best interests of the customers in Texas, I might want to ask why this kind of separation of accountability is even legal.


Some Facts about Pennywise Power & Reliant Energy: Part 1

Posted on by
1

Last month I published an article which attempted to illustrate the deregulated Texas electricity market. The point was to connect many of the REPs with their parent companies to give consumers a clearer picture of who all the players were in the Texas market.

Building off of that post, I’d like to take a closer look at Pennywise Power. My main reason for this is similar to my post last month, which is to give customers a greater understanding of some of the ownership affiliations for these REPs. With so many REPs being purchased by other companies, I think it’s important that customers who have negative experiences with one company don’t inadvertently sign up with service from another REP who might have the same parent company. By the same token, a customer who might find a better rate from a partner company where they’ve had a positive experience might feel more comfortable switching.

Which brings us to the focus of this article, Pennywise Power. Why am I singling out them out, as opposed to other companies that have multiple REP’s operating in the market? Well, I do think there’s a difference.

Why is Pennywise Power Different?

First, lets take a quick look at their website. It’s a very straightforward and functional website. It’s not cluttered or confusing, and there are really only a few pages to view, a homepage, a page to view available plans, a customer support page with some phone numbers, and an About Us page. The About Us Page doesn’t give much information about the company, it just reinforces their message on the homepage, which is that Pennywise’s purpose is to be a low cost provider with the mission of getting customers the lowest prices. Their no frills website supports this message. Nowhere is there any mention of Pennywise having any kind of corporate affiliation, which is typical if an REP has a parent company, like what you see on Reliant Energy’s website, among others.

But again, I reiterate, what makes Pennywise Power different? Well, for starters, their parent company IS Reliant Energy, who is in turn owned by NRG. I find it strange than an REP with such large parent companies would make no mention of their corporate affiliations anywhere on their website, particularly since the ownership chain includes one of the largest retail electricity providers and one of the largest energy generation companies operating in the United States. With that lineage, why would Pennywise Power’s website make no mention of their ownership and instead present themselves as just a small operation trying to appeal to cost-conscious shoppers?

Considering that Reliant is one of the two incumbent electricity providers operating in Texas and by that token one of the two largest REPs operating in Texas, I figure this garners a bit more attention. Particularly since they’ve been a lightning rod for controversy recently and they’re one of the worst reviewed providers on my website.

Breaking Down the Reliant/Pennywise Connection

Big companies operating multiple REPs isn’t a new thing. Fulcum Power previously owned Amigo and Tara Energy. They purchased Tara after buying Amigo because Tara is a niche REP that marketed to a specific demographic, much like Amigo itself. Under those circumstances, it makes perfect sense to keep operating the Tara brand, since it has specific market recognition. That’s probably half the reason Fulcrum purchased them in the first place. Ditto the recent purchase of StarTex Power by Constellation Energy. Or when Florida Power & Light purchased Gexa years back. Same principle.

The chief difference I see with Pennywise Power is that they weren’t an entity with a brand that was purchased by Reliant. They were created entirely out of thin air by Reliant Energy. They weren’t a company with brand recognition or an existing book of customers that was acquired at a good price. They were started from scratch by Reliant Energy employees in 2008. Their PUC license was initially granted to a company called Reliant Energy Services Texas, LLC. This is separate from the original PUC license that was granted for Reliant Energy, which was filed in 2001 under the company name of Reliant Energy Retail Services, LLC. Pretty similar names right? In 2010, the company formally filed to change the name of the the company tied to their PUC Certificate from Reliant Energy Services Texas, LLC to Pennywise Power, LLC. I guess they thought maybe they didn’t want to have their new and fresh brand attached to a parent company named Reliant. Here are links to the respective PUC Licenses, which include a record of their changes over the years: Pennywise Power; Original Reliant Energy.

Also, for the record, if Reliant was looking to separate Pennywise from their parent brand, they might have also considered modifying the information under both Mailing Addresses so all of the company officers weren’t the same people with the same positions and same contact information.

So Why Bother?

So the question is, why would Reliant Energy do this? Particularly since as one of the incumbent providers in Texas, Reliant Energy is already positioned with every possible advantage in the marketplace. They have brand recognition. People who don’t understand the nuances of the system naturally “trust” them because they’re the name they know. They’re bigger than the other guys, they have more money than the other guys, and they’re seen as a stable company that can be trusted. So what is the benefit of creating a new REP with a separate license out of thin air? I obviously can’t answer that definitively, as I have never worked at Reliant and wasn’t involved in whatever meetings took place that led to the creation of Pennywise Power. All I can do is speculate.

In the second half of my article, which I’ll post this afternoon, I’ll take a look at some of the reasons why I think Reliant might be benefiting from Pennywise Power.


Texas Electricity Provider Map

Posted on by
5

Last week’s purchase of First Choice Power by Direct Energy was yet another major acquisition of a Retail Electricity Provider by a major energy conglomerate. There’s been around a half a dozen of these deals in the past year, and in my opinion things have gotten a bit muddled and confusing. So I wanted to write a post to chart exactly who owns who in the deregulated electricity space in Texas.

Dominion Resources: Dominion Energy probably isn’t a name that is very recognized by Texas electricity customers. However, they are a huge energy company that deals in both energy generation and distribution in multiple states. Headquartered in Richmond, Virginia, they own the incumbent and regulated electricity providers in Virginia and North Carolina. In Texas, they own Cirro Energy, which they purchased in 2008. Earlier this year, Cirro Energy purchased Simple Power and absorbed their customers.

NRG: NRG, a new Jersey based company, is another huge energy company with massive power generation resources. On top of energy generation plants, NRG also owns Green Mountain Energy, which they purchased in 2010 for 350 million dollars. In 2009, they purchased former incumbent Texas electricity provider Reliant Energy for 287 million and change when Reliant was under heavy financial distress. This was a steal considering Reliant was the second largest REP in the state at the time and has huge brand recognition. In turn, Reliant Energy owns (and I believe operates) Pennywise Power, which is a new brand they’ve put into the deregulated Texas electricity market to try and capture different customers without effecting their core brand. So NRG owns Green Mountain and Reliant, and Reliant in turn owns Pennywise Power.

Just Energy – Just Energy is yet another big energy company, with resources all over North America. They had been a fairly smaller player in the retail electricity market in Texas until recently. Just Energy itself was mostly a niche provider, offering 5 year long term contracts to customers. However, they recently purchased the entire retail arm of Fulcrum Power. That includes Amigo Energy, Tara Energy, and Smart Prepaid. So now all of those brands are part of the Just Energy portfolio. They’ll likely keep the branding and still do business under the names Tara and Amigo, but it’s all Just Energy. Just Energy also owns another smaller REP, Commerce Energy.

Direct Energy: Direct Energy is actually a subsidiary of a British company called Centrica, but they’re known almost exclusively in North America as Direct Energy, so that’s the name we’re going with. Direct Energy is yet another huge energy generation company with huge and varied resources. In the retail electricity space they do business as Direct Energy and they are one of the biggest REP’s in Texas. They also operate in Texas as WTU Energy and CPL Energy in two respective TDSPs. In the Spring, Direct Energy also purchased Gateway Energy Resources for 90 millions dollars. Since then, Direct has removed Gateway as a brand from doing business in Texas. Just last week, Direct Energy made another huge purchase, this time of First Choice Power for 270 million dollars. Which is a huge price tag. So, as of now, every company I mentioned above is really a subsidiary of Direct Energy.

Constellation Energy: Constellation Energy is the largest energy supplier in America. Their 2007 revenues were 21 billion dollars. So yes, they’re another big energy guy. They own the regulated electricity entity Baltimore Gas and Electric. In 2 month period last spring and summer, Constellation announced purchases of both StarTex Power as well as MX Energy, two retail electricity providers that operate in the Texas deregulated markets.

Gexa Energy: NextEra Energy is the parent company of Florida Power and Light, the regulated electricity provider for much of Florida. They’re another big energy company, having generation resources in over 20 states. In 2005, Florida Power & Light purchased Gexa Energy. They still do business in Texas under the name Gexa.

Dynowatt: Dynowatt is a subsidiary of Accent Energy, which is a large company with natural gas ties in Ohio. Accent also serves deregulated New York, but they do business in Texas as Dynowatt.

TXU Energy: TXU is actually a subsidiary of Energy Future Holdings, which also owns Luminant, the power generation portion of the old TXU company that was forced to split because of deregulation laws. Now Luminant and TXU operate separately. TXU is the largest individual REP in Texas and one of the two former incumbent providers.

The following Retail Electricity Providers are stand-alone entities:

Texpo Energy: Texpo Energy is a smaller company operating in Texas. What makes them interesting is that they actually operate under 3 different brand names while all sharing the same PUC Certificate. The other two brands are Southwest Power & Light and YEP. So to sum things up, Texpo, Southwest Power & Light, and YEP are all the same company operating in Texas under different names.

  • Champion Energy
  • Stream Energy
  • Ambit Energy
  • Brilliant Energy
  • Texas Power
  • Liberty Power
  • Mega Energy
  • APNA Energy
  • Bounce Energy
  • Spark Energy

    • Hopefully this helps to give people a clearer picture about who some of the players are in Texas electricity. It is important that people know exactly who the company is that is supplying their electricity. For example, if someone had a bad experience with one company, they might not want to get service from another one of their subsidiaries. And since there’s been so many purchases and mergings of REP’s in the last 6 months, I thought it might be a good idea to chronicle which companies have ended where after the dust has settled. I’ll try to update this page moving forward as well. I doubt we’ve seen the last of big REP acquisitions, so this family tree might change.

    I’ve included a crude flowchart below. Yes, I do realize it looks like it was put together by a 3rd grader.

    Market Prices: Month to Month Plans 5/17

    Posted on by
    Reply

    Welcome back, everyone. I hope a pleasant weekend was had by all. Without any hesitation, lets jump into the electricity rates and comparison for the Month to Month plans we’re seeing in the Texas market today.

    Cheapest Month to Month Plans:

  • StarTex Power – 7.9
  • Southwest Power & Light – 7.9
  • Dynowatt – 7.9
  • APNA – 8.0
  • YEP – 8.0

    • And just for comparison, the most expensive variable plans in the market…

    Most Expensive Month to Month plans:

  • Texpo Energy – 12.7
  • Reliant Energy – 12.4

    • And the next most expensive plan is 11.6, so Reliant and Texpo are the big losers this week.

    Market Prices: Month to Month Plans 5/10

    Posted on by
    Reply

    This is our 2nd week in May, and summertime heat is just getting closer and closer. With that in mind, here is our shopping guide for the month to month plans this week in the Texas Electricity market. As always, check to make sure that the rates you’re exploring aren’t promotional rates, or if they are promotional rates, how long those rates will last.

    Cheapest Month to Month Plans:

  • Dynowatt – 7.9
  • APNA – 7.9
  • Southwest Power & Light – 7.9
  • StarTex Power – 7.9
  • Bounce Energy – 8.3

    • And as always, for comparison, here are the highest (non green) rates in the market this week for month to month plans:

    Most Expensive Month to Month Plans:

  • Texpo Energy – 12.7
  • Reliant Energy – 12.4

    • I was going to list some more providers, but the next most expensive provider was in the mid-11′s.

    Hope this helps people looking to shop for new electricity plans.

    Market Prices: Month to Month Plans 5/3

    Posted on by
    Reply

    It’s a busy day here at Texas Electricity Ratings. I’m in the process of updating our rankings based on the performance and activity of the last 3 months of the different electricity providers. However, before I get to publishing that information, I wanted to be sure to get our the monday Shopping Guide for different Month to Month plans in the electricity marketplace. So here’s our look at the different electric rates for month to month plans available to customers. As always, check to make sure if the rates are promotional rates, and if so, what the rates will be a month or two after a customers signs up for service. Particularly, a couple of the plans listed below are definitely promotional rates, so be sure to ask questions or read the fine print when ordering.

    Cheapest Month to Month Plans:

  • StarTex Power – 7.9
  • APNA Energy – 7.9
  • Dynowatt – 7.9
  • Southwest Power & Light – 8.0
  • YEP – 8.0
  • Bounce Energy – 8.3

    • And now, as always, here’s a look at the most expensive plans in the market for comparison.

    Most Expensive Month to Month Plans

  • Texpo – 12.7
  • Reliant – 12.4
  • Just Energy – 11.6

    • Market Prices: Month to Month Plans 4/26

    Posted on by
    Reply

    Below is this week’s look at the different electric rates for the Month to Month plans available in the Texas electricity marketplace. The list of plans below covers the best prices for both Variable rate plans and Indexed rate plans. As always, check to make sure the rates listed are more than just promotional rates that will increase after the first few months.

    Cheapest Month to Month electricity plans:

  • Dynowatt – 7.8
  • APNA Energy – 7.9
  • Southwest Power & Light – 7.9
  • StarTex Power – 7.9
  • YEP – 8.0

    • And just for fun, we have a couple of the most expensive month to month plans for comparison…

    Most Expensive Month to Month plans:

  • Texpo Energy – 12.7
  • Reliant Energy – 12.4

    • Market Prices: Month to Month Plans 4/12

    Posted on by
    Reply

    It’s Monday, and I hope this week’s look at month to month electricity rates finds everyone in good health and coming off a good weekend. Rates are still rock bottom, so now’s the time to take advantage of the market prices that the Texas electricity market is presenting. As always, make sure that you read the fine print for any plan you sign up for, as some of these rates might be promotional and could end up much higher after an introductory time period for the customer.

    Cheapest Month to Month Plans:

  • Dynowatt – 7.8
  • StarTex Power – 7.9
  • Bounce Energy – 8.3
  • Stream Energy – 8.6
  • Amigo Energy – 8.7

    • And as always, for comparison, here are the providers with some of the most expensive month to month plans:

    Most Expensive Month to Month plans:

  • Texpo Energy – 12.7
  • Reliant Energy – 12.4

    • Those two are the most expensive. The next on the list are .3 cents cheaper. Hope everyone can make good use of this information when shopping.

    Market Prices: Month to Month Rates 4/5

    Posted on by
    1

    Greetings, everyone. Hopefully everybody had a great Easter weekend, preferably ones that came with a day off from work. Anyway, to start the week as always I’m going to list out the best prices for Month to Month Plans electric rates in the market this week. Make sure that if you’re shopping for these plans, you are checking to make sure that the electricity rates listed are not promotional rates.

    Cheapest Month to Month Plans:

  • Dynowatt – 7.8
  • StarTex Power – 7.9
  • Bounce Energy 8.3
  • Amigo Energy – 8.7
  • Simple Power – 8.7

    • And as always, just for fun, lets take a look at the most expensive plans for Texas electricity in the deregulated marketplace.

    Most Expensive Month to Month Plans:

  • Reliant Energy – 13.4
  • Texpo Energy – 12.7
  • Bounce Energy – 12.6

    • Yeesh. Reliant Energy w/ a plan that’s almost 2 cents more expensive than the nearest plan. You’d think because of their size they’d be able to come up with CHEAPER rates, not the most expensive. Bounce Energy has one of the cheapest as well as one of the most expensive, which is curious. But at least Bounce’s plan is for Express Move, which offers a lot of different moving services along with the electricity, so you’re getting extra services for the price. What’s Reliant’s excuse?

    Market Prices – Month to Month Plans -3/29

    Posted on by
    Reply

    Ok, it’s Monday, so we’re taking a look at the lowest prices in the Texas Electricity market for Month to Month plans. This includes Variable rates and Indexed rates. Remember, if you’re shopping for a Month to Month plan, make sure you check to see if the rate listed here is a promotional rate. Read your fine print to make sure you’re not going to get hit with a much higher rate just as the summer months start. Checking the electricity facts label might be the best way to save money.

    Lowest Month to Month Rates:

  • Dynowatt – 7.8
  • Startex Power – 8.3
  • Bounce Energy – 8.5
  • Simple Power – 8.5
  • MX Energy – 8.5

    • Highest Month to Month Rates

  • First Choice Power – 14.6
  • Reliant Energy – 13.4
  • Texpo Energy – 12.7

    • After that, there were lots of different providers with plans in the same range. But once again, the big winner was First Choice Power, which was far and away the most expensive provider this week when it comes to Texas electricity and month to month plans.