What preoccupies 24-year-old Tomas van Stee most is electricity bills.
Energy may not be the most popular industry for startups ā but van Stee saw an opening.
āIf this industry is this hated, that must mean thereās an opportunity to fix it,ā he said.
The same day electricity prices rose again in Ontario earlier this year, van Stee launched a project offering bulk rates to people who use most of their electricity during the day.
On May 1, he introduced his company EnPoweredās āgroup-buyingā service. It puts all the customers who use 50 per cent or more of their electricity during the day into one buying group. The group becomes a large-volume user, allowing them to pay less.
Itās van Steeās way of helping āfix a broken industry,ā he says. Electricity prices have soared over the past decade in part to compensate for the artificially low rates of the past, and in part due to the provinceās promotions of wind and solar power.
The price is expected to rise as the province pays for nuclear power plant refurbishments, at a potential cost of $12.8 billion.
Van Stee came up with his idea after he learned his parents had locked into an expensive electricity contract with a private utility. Utilities in Ontario have been for convoluted and unnecessary charges, ballooning individualsā bill costs.
āAs sad as it is, I canāt even help my own parentsā because their contract has locked them in for a determined period of time with a hefty price to pay if they decide to leave early, he said, adding EnPowered doesnāt charge cancellation fees.
Heās consulted with about a dozen small businesses in setting up the project and is introducing them to group buying, which he says should save them just under $1,000 a year. The rest, he hopes, will come through word of mouth and outreach.
To be part of a group benefitting from the market rates, users must sign up with their local hydro account number (which can be found on their bill).
The market rate is designed for large users whose electricity is running at all times and for whom peak rates would cause astronomical pricing.
When van Stee has 25 customers or five small businesses, he sets up a volume account with the utility, which switches them over to market pricing as if they are part of a larger entity.
āI can go to a supplier and say, āIām not just representing one home; Iām representing 100 homeowners,ā ā van Stee explains. āSuddenly, that volume is as big as a factory and you can ā¦ negotiate better pricing.ā
Van Stee says he can help those who use most of their electricity during the day because in Ontario, electricity prices fluctuate according to the time of day. The peak period is 11 a.m. to 5 p.m. on weekdays, when prices rise to 18 cents a kilowatt hour.
He says he canāt help the average homeowner ā who uses about 36 per cent of their power during the day ā because the savings arenāt worth it yet.
Despite the little competition van Stee faces, he acknowledges people may be sceptical āof companies promising energy savings because of the history in the industry.ā
Van Stee started the company last June after quitting his job at a Toronto consulting firm heād worked at since graduating from university.
Heād always wanted to be an entrepreneur, making it the focus of his degree at Western Universityās Ivey Business School. Energy wasnāt part of the plan, but when a friend introduced him to the sector, āI started looking into it and just realized how bad it was,ā says van Stee, who was born in Holland and grew up on an Ontario dairy farm.
EnPowered is almost entirely funded out of his pocket, except for a $5,000 grant from the City of Kitchener.
Van Stee runs the business out of University of Waterlooās Velocity Garage in Kitchener, a start-up incubator. Friends and former colleagues have also lent hands, van Stee said.
EnPowered makes about 1/10th of a penny per kilowatt hour, which he says add come up to about 80 cents a month from an average household. āSo literally pennies,ā van Stee said. Itās in his interest to get as many to use the platform as possible.
Van Steeās mentor at Velocity, Wes Worsfold, says heās optimistic. āI really like the concept and I think it meets a real need,ā he said.
He added that part of the challenge for EnPowered will be to educate customers and gain their trust.
Then again, āWho doesnāt want to save money on their electricity bill?ā
- How Much NDP Will Save Ontarians
- What is the Global Adjustment?
- Group-buying startup hopes to cut bills
- Stop Over-Paying for Your Electricity
- How to Save Money on Energy in Ontario
- Your Natural Gas Pricing Options
- The Opportunity of Energy Group Buying
- How to Escape a Bad Contract in Ontario
- The Bumpy Road to Energy Deregulation