Griddy Pro Review: Texas energy reseller goes MLM
Griddy Pro is the MLM marketing arm of Texas-based energy reseller Griddy.
Griddy’s website lists co-founder Nicholas Bain and Gregory Craig, both of whom have a history in the energy sector.
As per their respective Griddy corporate bios;
Mr. Bain has been championing the investment and growth of renewable energy for more than 15 years.
He previously established Allco Wind Energy, oversaw the largest wind farm development project in the United States, and was the CEO of Graphite Energy prior to co-founding Griddy.
Mr. Craig has been a pioneer in the US energy industry for nearly 25 years.
After launching Cook Inlet, one of the largest wholesale energy traders in North America, Craig went on to lead Commerce Energy as chairman and CEO before co-founding Griddy.
Griddy Pro was announced earlier this month, with coverage revealing the appointment of “new leaders”.
Griddy’s new leaders, CEO Michael Fallquist, COO Christian McArthur and CFO Roop Bhullar, previously led Connecticut-based Crius Energy, which was sold last year for $400 million to Vistra, Irving-based owner of the TXU Energy brand.
Former Griddy CEO Greg Craig will remain on the Griddy board.
Crius Energy was a “strategic partner” of Viridian Energy, a former MLM company BehindMLM reviewed in 2017.
Griddy’s new CEO, Michael Fallquist (right), founded both Viridian Energy and Crius Energy.
In December 2017 Viridian unexpectedly announced it was abandoning its MLM business model. Distributors were caught off-guard but given four months notice.
Three months later it was revealed Viridian settled a deceptive marketing and sales tactics complaint with Massachusetts for $5 million.
Viridian’s website is still up today, however Alexa traffic estimates suggest there isn’t much going on.
Crius Energy struggled and, after cutting 270 jobs the same year Viridian settled with Massachussets, was sold to Vistra in early 2019 for $436 million.
Griddy Pro marks Michael Fallquist’s return to both the energy sector and MLM industry.
Read on for a full review of Griddy Pro’s MLM opportunity.
Griddy Pro’s Products
Griddy markets “wholesale electricity”.
Get access to wholesale electricity for $9.99 a month. Pay exactly what we pay.
In a nutshell Griddy customers prepay for electricity, which is then billed based on the “current real-time rate”.
Griddy claims an average 8.5 cents per kWH rate, equating to an average savings of $596 a year.
At the time of publication Griddy is only available in the state of Texas.
Griddy Pro’s Compensation Plan
Griddy Pro’s compensation rewards affiliates for signing up new energy customers. These customers can be retail or recruited affiliates.
Griddy Pro also muddies the waters by paying customers a $25 commission for referring new customers.
That $25 is credited at $75 if put towards ‘the purchase energy efficiency products at the Griddy rewards store.’
Note however that Griddy retail customers are locked out of the MLM side of the business.
Customer Referral Commissions
Griddy Pro affiliates receive a $25 bonus per referred energy customer.
Referred Griddy customers can be both retail customers and recruited affiliates.
Customer Referral Rewards are paid 30-45 days after the new customer’s enrollment is accepted by the utility.
Also if the customer was referred previously in the past twelve months and has signed up again, no customer referral bonus is paid out.
Residual Customer Referral Commissions
Griddy Pro affiliates are paid an ongoing monthly commission on signed customers:
- $2 is paid per active residential customer
- $1 per 1000 kWh of usage is paid per active commercial customer
The MLM side of Griddy’s compensation plan is paid out based on shares and bonus pools.
There are four bonus pools, each ‘funded by all the customers in the Referral Network.’
- Team Bonus Pool
- Leader Bonus Pool
- Higher Performer Bonus Pool
- Monthly Promotional Bonus Pool
How the pools are funded is tabled as follows:
Qualification for each of the bonus pools is calculated via energy customer generation across a unilevel compensation structure:
A unilevel compensation structure places an affiliate at the top of a unilevel team, with every personally recruited affiliate placed directly under them (level 1):
If any level 1 affiliates recruit new affiliates, they are placed on level 2 of the original affiliate’s unilevel team.
If any level 2 affiliates recruit new affiliates, they are placed on level 3 and so on and so forth down a theoretical infinite number of levels.
Energy customers in the unilevel team can be retail customers or recruited affiliates.
- Team Bonus Pool qualification requires ten customers across the first three unilevel team levels, with no more than 40% counted from any one unilevel team leg
- Leader Bonus Pool qualification requires one hundred customers across the first ten unilevel team levels, with no more than 40% counted from any one unilevel team leg
- Higher Performer Bonus Pool qualification requires ten thousand customers across the entire unilevel team, with no more than 40% counted from any one unilevel team leg
- Monthly Promotional Bonus Pool qualification is not provided
Griddy Pro’s compensation plan states affiliates ‘can earn multiple shares in each of the Monthly Revenue Sharing bonus pools.’
Although not explicitly clarified, I believe one share is awarded per qualification criteria met.
E.g. If a Griddy Pro affiliate had twenty customers across their first three unilevel team levels, they’d receive two shares in the Team Bonus Pool (one share = ten customers).
Each share is paid out equally from funds allocated to the corresponding bonus pool.
Residual Bonus Pool commissions are paid monthly and must be requalified for each month.
Joining Griddy Pro
Griddy Pro affiliate membership is $14.99 a month.
Utilities MLM companies are notoriously complicated. By limiting the service to one state, Griddy appears to have avoided that pitfall.
That said Griddy’s utilities offering isn’t a straight-forward set and forget monthly bill.
Because Griddy calculates billing using a variable rate, customers are encouraged to pay attention to rates through an app.
This isn’t for everyone. I know personally I couldn’t be bothered keeping track of rates and would wind up just paying whatever my monthly bill is (as with a traditional utilities company).
In Griddy this comes with potential pitfalls, as outlined by Texas Electricity Ratings;
My hesitations with Griddy had nothing to do with their technology, however. What bothered me was their messaging.
They talk about savings, but in a marketplace not everyone understands how deregulated electricity in Texas works to begin, the people who understand the intricacies of spot pricing on the wholesale market and how it relates to their bills would be an even smaller percentage of folks.
And since they are the first service of their kind, there was a huge potential for customer confusion when they’re used to traditional electricity plans where there is zero risk being passed onto them from the electricity companies.
What that risk translates to is hard to quantify in terms of money, but customers used to a $100 bill could be looking at $4-500 bills, in theory.
For their part Griddy claims ‘price spikes only happen .06% of the time’.
On its website Griddy states it has saved its 28,000 customers $14.7 million (customer count accurate as of Nov 2020).
Texas Electricity Ratings claims Griddy “overstates their savings”.
Griddy is using basic EIA data (Energy Information Administration). The problem with EIA data is that it looks at the entire state of Texas at the highest level.
That isn’t a true representation of what is available on the free market in deregulated areas. It’s deceptive at best, disingenuous at worst.
If you’re in Texas and considering signing up as a Griddy energy customer, these are points to keep in mind.
On the MLM side of things the only thing missing from Griddy’s compensation plan are retail customer qualifiers.
At present the only qualifier for Griddy affiliates is ongoing payment of the $14.99 monthly fee.
Commissions are tied to customer acquisition, however customers can be retail or recruited affiliates. This leaves the door open for pyramid recruitment.
The remedy to this is tying personal retail customer acquisition to bonus pool qualification. Seeing as Griddy’s business model is literally acquiring energy customers, this shouldn’t be a problem.
One other thing to keep in mind, which admittedly isn’t unique to Griddy but more of a utilities MLM pitfall, is
Griddy Pros will be required to repay the Referral Bonus for any Customer who terminates service within sixty (60) days.
One article from mid 2019 details a Griddy customer signed up and racked up a $350 bill in just eight days.
“We’ve been with Griddy for eight days. In eight days, we have been charged over $350. We’ve been charged by Griddy so much that today my credit union stopped Griddy from being able to charge my account,” Brooks said.
Brooks, like many of Griddy’s customers, was forced to turn off his air conditioner to try and conserve energy or risk another big bill.
Brooks said he is no longer with Griddy because of the unpredictable energy bill. He is now with Pulse Power.
Had Griddy Pro of been in place and the customer been referred by an affiliate, they’d have had to pay back any commissions earned.
It’s not a deal breaker but like Griddy’s energy pricing model, something to keep in mind.
Outside of that Griddy Pro’s compensation plan is refreshingly simple. Just make sure you fully understand and are able to explain both the positives and negatives of their spot-pricing billing model.
Update 23rd February 2021 – Although arguably a rare occurrence (who knows what the future holds), Winter Storm Uri has emphasized the weakness of Griddy’s variable utilities rate model.
Update 28th February 2021 – Griddy has been cut off from the electricity grid by Texas regulators.
Update 23rd March 2021 – Griddy has declared bankruptcy after it was sued by the Texas government.
As a result of the legal action and bankruptcy, Griddy’s customers won’t have to pay their Winter Storm Uri bills.
Should read “residential” customer, right?
I dealt with Viridian and similar companies here in the Mid-West USA. Really scummy and dishonest pitches, see people burned by them with high prices.
Don’t get me started on the scummy telemarketing as well. I would run away screaming from this.
Yah thanks 😀
I had Griddy here in Houston last year and I laugh at the $350 in 8 days. There were a few days in 2019 they were hitting customers with $10/kWh for hours at a time. I got charged $300 plus dollars in one day! I had to go outside and kill the power to my house for two days in 100-degree temps to stop the bleeding. I had to sit with no power or A/C until a new contract was signed with a new company. Long story short this does not surprise me that they are trying to do this scam.
So I’ll throw in my perspective as a happy customer and someone who is going to try Griddy Pro.
1. Griddy is a good product and it actually saves you money. It is straightforward even though most people don’t want to deal with that much trouble of watching the price.
2. With a little bit of polish, Griddy is EASILY the best way to buy electricity. They just need to convince people to get a few smart home apps.
For example, I got tired of manually messing with my AC, so I got a smart thermostat and connected it with IFTT, so now I don’t have to worry about my AC running when the wholesale price is high.
I think a few other things, like an LED light that goes off when the prices at high so that you know to not run the washing machine or the dryer and to just wait.
The review you showed was from a freak incident. August 2019 was when the wholesale rate was crazy because a hurricane came through, power plants were shut down, etc. It was really a perfect storm.
If you were on top of it, then it didn’t cost that much. If you just used your electricity like normal, then yes you had a high bill.
It isn’t for everyone, but if someone wants to save $400+ without really too much effort, then this is for them. I’ve been using it for a year and a half and I stuck with it after 2019 because I understood the model.
I saved $300 this summer and I’m a low usage customer. I’m sure high usage customers saved much more.
3. I don’t think they have a false savings model. They say that Texans pay 12.5 cents on average. That seems right to me.
IDK if the author of this article buys the hype of the 10 cent plans, but those are actually just 16 cent rates packaged with $100 credit at 1000 kwh usage.
If you use exactly 1000 kwh, then yes you can get 10 cents for your rate. I’m also on 10 cents with my rate, but I don’t have to target an exact usage. The savings number they give is accurate and I’m not sure that you explained clearly enough (for me at least) to see where they are deceptive or misleading in that area.
4. They do have some stuff up their sleeves. They are going to have a price lock feature so that people don’t have 2019 happen on them.
They can lock in a price and Griddy becomes a regular company to them. So they can go back to wholesale when they want to take their own risk. I
f they want to hedge their bets, they can switch to Griddy’s locked in rate and the customers are treated like a normal customer where they don’t save the money for themselves.
IMO this is the missing piece and the whole MLM part is a weird quirk, but I’m not imagining having any trouble getting friends and family to sign up for Griddy.
5. This is my first time using this site, so IDK if you can’t advertise (Ozedit: you can’t, spam removed)
So uh what, you just sit there melting because savings?
This sounds terrible.
I precool my house so that it feels fine. Or I use a fan. I mean it sounds like you skipped over the last part where you can sign up for a locked rate.
The new griddy is going to be the best of both worlds. You can switch to a locked rate and consume electricity like normal. There also isn’t a contract on Griddy, so you can always switch to another company if you don’t like the rate that Griddy will offer.
Look, if you just want to use electricity like you always have, go for it, if you want to do a couple of things and save a few hundred bucks, then you can switch.
Doesn’t affect me, I just thought I would throw out my opinion since I’ve been using Griddy for a year and a half.
If it works for you then great.
I’m not a high elec user so Griddy makes little sense. If I need to use something powered I need to use something powered.
On the other end of the spectrum I can’t see large families stopping elec usage in the house because something something wholesale price nuts for the next few hours.
I saw it and ignored it. Griddy’s whole marketing hook is “watch an app like a hawk and save money”. If they abandon that they’re no different to any other reseller.
Oz, I think what Jaek is missing is sure you can use IFTTT and have a fancy “Smart” thermostat, but from my experience, people who are using Griddy, not all, but most are people trying to save money and don’t have lots of money for fancy $300 thermostats, and stuff like that is not always an option.
Most wealthy people don’t care and use a contract with one of the other companies.
For November, Griddy had an All-In rate of 9.4 cents, and most contract companies offer the same rate right now, so really, it’s not worth anyone’s time to stare at the app all day.
And the rate in July? Mine was 8.1 cents. I live in a condo and I don’t even use 12,000 kWh per year. I got my smart thermostat for like $100 and my savings have been $375.
Also with the comment about having to a bunch of work. Places that offer lower than 9.4 cents is when they give you $100 when you go over 1000 kWh per month. You have to work a lot harder to game the system there.
I literally set and forget with my thermostat and I only pay attention to the washer and dryer. There are PLENTY of times when I’m running those at the wrong time and I still have an ACTUAL 10 cent rate overall.
Look at the EFL and you’ll see how other companies are trickier than Griddy is. Even if you can get a flat rate 9.4, people are saving more with griddy.
I was just talking to a customer that is doing 6.9 cents as her total. Crazy. She’s a lot more adamant than I am.
A recent headline in the New York Times:
The person in question:
A bit further down, we learn…
Another example from the same article:
Although Griddy apparently acted within the law, people still got slammed with huge bills they would not have had to incur if they had stayed with a conventional supplier.
To their credit, Griddy did warn their users to switch to a different provider when the storm was forecast, but some could not do so.
As risk/reward relationships go, it seems to me that Giddy offers little on the reward side for the huge risks involved.
Thanks for the update Amos (got your email). Will get into today.
How’s that electric bill now Jaek? lol
Jake’s fine. He precools his house. He’s a proper muppet.