By Tori Youngblood, staff writer at Grow Wire
⏰ 6-minute read
Energy executives Greg Craig and Nick Bain founded wholesale energy company Griddy after realizing power could be cheaper for electricity customers.
The company is different than most energy retailers with its easy-to-use mobile app that tracks real-time energy prices, though setting it up involved legal and logistical hurdles.
The company now serves more than 480 cities in Texas and is looking to expand internationally.
In the small beach neighborhood of Playa Vista, Los Angeles, there sits an office space sheathed in bright hues of pink and orange that bolsters a ping pong table, five beverages on tap and desks situated in an open-plan fashion. Young engineers, writers and marketers fill these desks, working to revolutionize the way we consume energy.
Though it may sound like a chic coworking space, it’s in fact the headquarters of Griddy, an energy company with a twist. The startup is determined to send currents through the energy industry using technology, communication and a subscription business model.
Energy company Griddy houses its ultra-modern headquarters in Los Angeles's Silicon Beach.
An app for everything
If a service is needed, there seems to exist an app for it, whether it be banking, transportation, healthcare, retail or entertainment. Now that Griddy is on the smartphone grid, there is even an app for energy.
“It’s crazy because Amazon has changed the way people shop, and Netflix has changed the way people consume entertainment,” said Griddy Co-Founder and CEO Greg Craig. “Uber and Lyft have changed the way we ride around, and you can just go down the list.”
It’s not just the laid-back office and young-spirited branding that sets Griddy apart from other energy companies. The company is different, Craig said, because it is adapting to what most modern consumers demand: ease, convenience and fair prices. With Griddy, users don’t need to make sense of a long electricity bill that comes in the mail, filled with jargon and obscure pricing. Rather, they can track their smart energy meters from their smartphones.
Griddy's app allows customers to watch the fluctuating prices of energy in real time.
The lightbulb moment
It was the app-inspired paradigm shift in consumerism that sparked Craig and co-founder Nick Bain’s lightbulb moment. They wanted to literally put power back into the hands of consumers, offering them wholesale prices and transparency into what they were paying for.
As a result, Griddy app users can monitor the current price of electricity, their spendings and savings and their energy usage at any given time. They may also receive “price alerts” when energy prices fluctuate higher or lower than usual. This feature allows customers the option of adjusting their power consumption accordingly. With this information, they may decide to turn off their AC units or postpone laundry until the prices go back down (as if we needed another excuse).
Companies like Uber and Netflix inspired Griddy's app product.
Before Griddy, both co-founders had extensive experience in the energy sphere. Craig founded and later sold energy trading company Cook Inlet after graduating from business school. He then became the CEO of wholesale energy trading company Commerce Energy, while Bain was CEO of energy storage company Graphite Energy. They eventually quit their respective positions to start Griddy together, determined to make it different.
“We just had an idea,” said Craig. “We got along well, we saw the world the same. And it was that simple.”
The idea for Griddy may have come with ease, but the execution brought complexities and challenges to a seemingly simple design.
Build it and they will come
The two energy entrepreneurs put their finances together, self-funded Griddy and set sights for their first hub on Texas, the largest deregulated energy market in the United States.
A deregulated energy market allows for competition, giving consumers the power to choose their energy providers. With more than 150 different options, Texans have a lot to choose from, including Griddy.
“So we thought, let’s take on the biggest market right out of the gate,” said Craig. “If we can prove that Griddy wins in that market, then we can scale anywhere.”
The next steps to making Griddy a reality were getting regulated, which requires an approved license by the Public Utilities Commission in any given state, paying the heavy capital requirements to use the state’s grids and building the tech platform to connect to those grids, along with coding an app that would reflect the market in real-time.
Despite the financial and technological hurdles, however, Craig insists the most difficult obstacle was handling an influx of doubts from people who said Griddy would never succeed.
“But when you’re an entrepreneur like Nick is and I am, that’s what you live for,” said Craig, who is intent on proving their idea is the next big thing in energy despite the criticism.
Griddy attends events like SXSW in its main market of Texas.
How it works
While service apps inspired the technical aspects of Griddy’s relationship with consumers, it was Costco that essentially inspired its business model and pricing. Griddy members pay $9.99 per month to be connected straight to the energy grid, unlike other companies which typically charge a connection fee and may require a long-term contract. Griddy profits only from the monthly subscription fee, Craig said.
“So what we figured out is if you just pass on the raw price of power directly to the consumer, like Costco passes on products at wholesale, and you charge a subscription fee … that was 30% less than any fixed offer price in Texas,” said Craig.
To start using Griddy, customers log into the Griddy app, which then switches them over to Griddy from their current provider. They then have access to wholesale energy prices, since Griddy is connected to the Electric Reliability Council of Texas (ERCOT), which manages a majority of the state’s power grid and wholesale market.
Prices for electricity are in constant flux, with Griddy’s website estimating that they change about every five minutes based on supply and demand. For example, prices may increase on a hot day when more power is likely to be used. Conversely, they may decrease on a windy day when there is a lot of power on the grid. Most energy companies charge a fixed-rate for power that takes into consideration these constant changes. On the other hand, Griddy customers pay the current market price, however high or low it may be at a given time.
It was this ebb and flow of energy prices that led Bain to come up with the idea for the mobile app price alerts, a feature that Craig says sets the company apart from the rest.
Griddy customers can track their personal energy use and spending in the app.
In addition to the user-friendly app, the estimated savings the company boasts are truly electrifying. According to the U.S. Energy Information Association, the average price of electricity in Texas is 11.67 cents per kilowatt hour. Griddy claims that by using its services, customers in Texas can pay an average of about 8 cents per kilowatt hour, though that estimate is contingent upon a few different factors, namely how much energy is on the grid. The company estimates a small home could save $237 per year and a large home could save more than $550 per year by using its services instead of traditional energy companies.
Granted, achieving those savings may involve careful monitoring of the app to avoid electricity use during peak times and price spikes, which have come from hot weather, tripped power plants and other causes and shot prices to as much as $9 per kilowatt hour, per Griddy’s Twitter feed. Still, Griddy’s weekly updates boast that its users pay less for electricity than Texans on the whole.
A bright future
Griddy was born four years ago in Houston and now serves more than 480 cities in Texas. The co-founders have their sights set on New York, Europe, Asia and Australia as markets for expansion.
The company recently signed a partnership with EDF Trading, one of the largest wholesale energy traders in the world. Under the agreement, EDF will supply a variety of services and an equity investment to help Griddy accomplish its goal of expanding domestically and internationally.
Like the changing prices of energy, Griddy too is always evolving. Two energy executives became entrepreneurs, an idea became innovation, and an energizing drive to be different has become a source of power and change.