A recent Ohio State University study has revealed that more than 70% of the most popular retail electricity offers actually cost more than the default price.
That means that consumers often pay more when they shop for a power supplier rather than go with the standard provider.
"The offers that were saving for consumers were about 5 to 10% at best. So the savings were about 300% smaller than the costs," said Noah Dormady, the lead author of the study. "And so when these markets historically have offered cost savings, the cost savings have been minuscule compared to the cost increases in these markets."
Ohio is a deregulated market which means consumers can go to an open market and shop from more than 40 different competitive power suppliers with the Public Utilities commission of Ohio.
"At the retail level, restructuring or deregulation allows consumers to go to an open market and shop from one of several competing competitive retail electric supply or cress retail suppliers each day in Ohio," Dormady said. "Each day, residential consumers have approximately 45 to 50 different suppliers, filing about 150 different retail choice offers. Again, that's each day in each of the six major electric distribution service territories across the state."
Researchers took ten years analyzing the largest database of retail electricity choice offers ever collected to conduct a rare retail choice study.
The database was funded as part of a larger project through the Alfred Peace Long Foundation.
"We essentially built a SQL database by pulling the offers that have been filed with the Public Utilities Commission dating back to 2014," Dormady said. "And so those offers contain a variety of parameters, just like you will see if you're a consumer shopping on the PUCO's Apples to Apples website or the PA Power Switch website in Pennsylvania. When you see offer details filed on those websites, our database contains all of the parameters associated with each of the details of those choice offers that are filed."
Through their research, Dormady said they found that while savings are available, consumers might only be able to find them about half of the year.
“We titled our brief 'Finding a Black Cat in a Coal Mine' or' finding a black cat and a coal cellar' and that's exactly how we think these markets should be described," he said. "They're very difficult to obtain and to find a cost saving rate.”
Dormady is currently looking for participants in the Dayton area for an expanded survey over Pennsylvania and Ohio.
"We are engaging in interviews with residential consumers and we are evaluating consumers' experiences with their electricity bills and with electricity supply offers, with credit supply," he said. "And we are going to be looking in great detail at individual consumer level experiences in these markets."
He said they hope to address the issues that other jurisdictions are facing internationally through their deregulated market.
"We're doing a deep dive into the consumer experiences among a full distribution of consumers. Those who are wealthy, those who are more poor, those who are in different service territories across the state, consumers within communities with municipal aggregation and without municipal aggregation and that sort of thing," he said. "So we are doing a deep dive in across both states and we are anticipating some very important results that will stem from that research going forward."
