Have you ever received a phone call from a friend who said they could save you money on your electric bill? Or that same friend who said they had a business opportunity they wanted you to check out, where you both would make so much money together? We’ve all been there. The reason we receive those phone calls, get knocks on our doors and and get asked to come out to hotel meetings for ‘pep rally’ presentations is because of energy deregulation. The main question is, though, is energy deregulation a scam? More specifically can you really save money on your bill as a customer and potentially earn income through one of the many business opportunities available? Here in this post I will answer those questions so you can know whether or not energy deregulation is a scam.
On a quick side note, since June, 2010 I have been able to establish an ongoing monthly residual income because of an energy business I joined. Between last year and now I have seen plenty of companies come and go and have learned exactly what to look for and which companies will be able to help you.
So to determine if energy deregulation is a scam we first must ask the question, will a consumer who signs up with an energy supplier actually save money on their electric/ natural gas bill? The answer, in most cases, is yes. Most residential and small business customers will notice an annual savings of approximately 10%. For large commercial and industrial accounts the annual savings will vary. The only questionable aspect of deregulation you’ll want to be aware of is fixed rate contracts. There are some energy suppliers in the market that have been guilty of the ‘bait and switch’ technique that goes something like this – a customer will be promised a specific rate and then two or three months later that rate will be much higher. Some suppliers and brokers can get away with this because they have so many new customers signing up because of a low introductory rate that by the time the customers notice the rate has increased, the company has already cycled through thousands of customers and made their money. So a general rule of thumb to follow is look for a supplier that does not require you to sign a contract. If you do sign a contract (fixed rate, etc) be certain you have researched the company thoroughly and find reviews from satisfied customers.
The next aspect of energy deregulation that comes into question are the various income opportunities available. In order to maximize distribution, energy companies will use direct sales or a network marketing model. This way, the company can acquire more customers and then compensate the independent representatives for their efforts. The only problem with these particular models, especially network marketing, is that some companies require you to pay a fee to get started and then an ongoing monthly fee to maintain your position. This is only acceptable if the company is selling a physical product, but the fact is, they are merely offering a lower rate on an EXISTING service. If you are considering joining an energy company to make money find one that doesn’t require you to pay a fee.
Now don’t get me wrong, there is a lot of money to be made from energy deregulation, but it can be done without charging fees just to help a company get customers. The problem with fees is retention. If you build a large organization, each person in your team has to pay on average $350 to join and approximately 90% of them will never earn their initial investment back. If that’s the case, how many people do you actually think will stick around in that business? If you take a hard look at the various companies like Ignite, Viridian, AMA Nation and Ambit, the people making good money only account for a very small percentage of the company. Meanwhile, the other people find themselves out of around $600 by the end of the year!
So, is energy deregulation really a scam? Besides suspect rates from a few companies and fees required to join some programs, the answer is no. If you are considering joining a company to make money as a representative or you simply just want to sign up as a customer and lower the rate on your bill, just do your homework. Get the facts, ask questions and become informed.
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