Joyce Vickless spends her days cleaning homes. But her side job is selling electricity.
About a year ago, the McCandless resident and owner of a cleaning business enrolled in an electric supply plan from Ambit Energy, a company based in Dallas. When she found out she could become a “regional consultant” for Ambit, she began talking to family and friends about switching to the supplier’s plan.
“You just gotta be determined, and you just gotta keep at it, because you’re going to get a lot of no’s, but then you get your yes’s,” said Ms. Vickless, who receives free electricity since she’s signed up 15 customers. “I just get to know them and get into their needs. Then I tell them I found something I’d really like to share with you.”
Ms. Vickless is part of an emerging class of sellers that electricity suppliers are relying on as the energy market — which was deregulated 15 years ago — becomes more complicated. Direct selling — a technique well-known for pushing things like Avon beauty products — has become a popular way to get in front of more residential customers.
Meanwhile, customers now being pitched by their neighbors and relatives still need to shop around, industry observers say. Given the variety of electric supply plans, it could be tricky to rely on one source to find the best deal.
Demystifying the market
As recently as 20 years ago, electricity was regulated at all stages — from its production at a power plant to its transmission and distribution to local electric utilities. Utilities bought the power from the producer and passed the costs to customers.
In the late 1990s, Pennsylvania and 15 other states deregulated power generation, requiring electric utilities to sell their power plants. The new rules allowed businesses to compete to get the best deal for the power, then sell it to homes and businesses. In many cases, the supply rates advertised by these companies are lower than what utilities like Duquesne Light Co. and West Penn Power Co. can offer.
At first, “I don’t think consumers quite understood how it worked,” said Darrin Pfannenstiel, senior vice president of compliance and government relations at Stream, a Dallas-based electric supplier that uses direct selling in Pennsylvania.
When Texas deregulated its markets, he said, some customers had misconceptions that their homes would be rewired, that they would have to buy a new meter, that the safe delivery of power was being sacrificed to a private entity.
“It was an issue of trying to educate consumers,” Mr. Pfannenstiel said. “Companies are now going out into the wholesale market and competing to get a lower rate for you, or to get a different type of electricity you might want.”
Overall, direct selling — which relies on personal explanation and instruction from an independent seller — is a $36 billion industry that involved about 20 million Americans in 2015, according to the Direct Selling Association, a Washington, D.C.-based trade association.
Much like sales of beauty and health care products boomed through building relationships with customers, leading electric retailers are finding success, said Joseph Mariano, the group’s president.
“Combine that now with an almost ‘gig economy’ approach, where somebody can become a seller of energy, a marketer, and have their own small business selling the product,” Mr. Mariano said, referring to the growth of services that allow people to work on their own schedule.
Many electric shoppers first discover the market through such pitches made via direct selling, door knocking or telemarketing, said John Tough, vice president of business development and operations of Choose Energy, an online platform based in San Francisco that allows consumers to compare prices and choose plans from electric suppliers.
The customized sales pitch about the perks of enrolling may mask a higher-priced product, Mr. Tough said.
“Ultimately, these channels are good to help educate customers to choose, but the consumer will do themselves a favor by comparing these ‘amazing rates from friends and family’ with the real market clearing prices,” he said. In addition to firms like Choose Energy, customers can shop on PA PowerSwitch, the state’s official clearinghouse of electric supply plans.
“They will likely find savings and better offerings elsewhere,” he said.
A retirement plan
For those who are willing to work, Ms. Vickless said, the sky is the limit in selling power to the people. As a direct seller with a company-supplied website and materials, she can connect both residential and commercial customers to Ambit’s staff and brokers.
“My cleaning business is not something I can retire on — this is,” she said. As she grows customers, she receives a monthly check offsetting the supply portion of her electric bill and has unlocked income based on her customers soliciting more customers. She declined to disclose how much she’s earned.
“It can be as part time or full time as you’d like,” she said. “We never tell anybody when they join our business to quit what they’re currently doing.”
But, she added, “Once you’re making enough money, you can cut down on your other job. There’s so many people who have retired from what they’re doing.”
Daniel Moore: dmoore@post-gazette.com, 412-263-2743 and Twitter @PGdanielmoore.
First Published: June 13, 2016, 4:00 a.m.
