An Introduction to Ambit Energy
What Is Ambit Energy?
Ambit is a retail supplier of electricity and natural gas. They sell residential electricity service, commercial electricity service and natural gas. In 2016, their revenue exceeded a billion dollars.
In 2014, they were one of the fastest growing private companies in the U.S., a great accomplishment for an electric company. They grew from one customer to a million in just seven years. They achieved that rapid growth by offering incentives for existing customers who referred new customers before rolling out “consultants” who focus on enlisting even more customers and consultants.
Does Ambit Energy Produce Power?
No. They’re selling power generated by a variety of companies. All of the power is delivered by Oncor, something true of every other major electric company in Texas.
How Much Does Ambit Charge?
This truly varies. You’ll pay more for a greater percentage of renewable energy. For example, their 100% renewable energy plan costs roughly 1.5 cents per 1000 kWh than the plan with 15% renewable energy.
The price you pay per kilowatt hour goes down based on usage. If the price per kWh is 14.4 cents for 500 kWh, it drops to 12.4 kWh hours for those who use 2000 kWh. My electricity rate is just over 9 cents per kWh. However, the electric rate you’d pay depends on the plan you chose and where you live, so check out the rates on a comparison site.
Does Ambit Have Discounts?
The easiest discount to get through Ambit is to sign up for paperless billing and automatic payment. This is available for most of their one year and two year plans. You receive the discount because of the lowered administrative costs associated with your account. It is similar to the discount auto insurance companies give when you pay a single annual premium instead of sending a check every month.
In fact, you get a discount on Ambit’s energy rates if you have a 12 month or 24 month plan for that very reason. Sign up for an Ambit plan that has a cancellation fee, and you’ll pay less per kWh as well. Free electricity at night comes with a slightly higher electric rate for power consumed during the day.
Is Ambit Energy an MLM?
The short answer is yes and no. Ambit Energy is first and foremost a power company. They provide electricity and natural gas to their customers. They offer a customer referral program that allows you to receive a modest reward for referring new customers. How does that differ from an MLM? You can simply pay your electric bill, and that’s your entire business relationship with Ambit Energy. MLMs don’t work that way.
It takes 15 signups to get your own electricity for free. Since Texas hasn’t deregulated its gas industry, someone signing up for both gas and power service with Ambit counts as two signups but you won’t get credit toward free natural gas.
On the upside, there is no cost to you to refer people. Nor is there a set timeline to do so. This isn’t like Avon where you have to sell a minimum amount of products to remain a representative, and you certainly don’t have to pay for brochures or work full time selling stuff.
Ambit Energy isn’t unique for selling electric power via referral marketing. Stream Energy pioneered the concept. They grew from nothing to $80 million in sales in less than a year after its founding in 2004.
Why do people consider Ambit an MLM? The Chief Marketing Officer is a recent former Chairman of the Direct Sales Association, the MLM watchdog group that sets standards for the industry. Virtually all the marketing is done by a network of consultants that rivals big MLM companies like Avon.
I am not an Ambit consultant. I’m one of their customers who occasionally refers people to sign up with Ambit with the hope of saving some money on my own electric bill.
Ambit does not require consultants to be a paying customer, though they’re encouraged to be. This isn’t pay-to-play, because you’re paying for electricity and natural gas, not buying tons of makeup or health products. And if you drop out of the consultant program, you can continue to be an electricity customer.
© 2019 Tamara Wilhite