Call the Neighbors, It's Time to Pay the Bills

Alphabuyer aims to save Pittsburghers a bundle with social-utility deals.

Social media has changed the way we communicate and shop. It’s even toppled dictators. Now, Alphabuyer is using a potent combination of techno-savvy and business sense to take on a new challenge: how Pittsburghers pay their utility bills.

“We want to change the way people buy essentials,” says Kevin Johnson, company founder and chief Alphabuyer, “instead of spa visits and facials.”

Alphabuyer enables customers to shop for utilities as a group, saving them as much as 25 percent. The Philadelphia-based company employs fewer than 20 people but is quickly expanding. Pittsburgh operations began in May; group rates on electricity are the first to be offered on the site, with natural-gas deals to follow.

Utility deregulation is the lynchpin of Alphabuyer’s business model. Recent legislation split the process of generating power from supplying it, meaning Pennsylvanians are no longer shackled to specific utility companies. Unfortunately, comparing rates on your own is a painful ordeal awash in fine print.

Alphabuyer streamlines the process through its user-friendly website. The group dimension, meanwhile, allows people to get better deals than they would alone.

Shopping is as simple as logging onto the Alphabuyer site and punching in your zip code. Relevant deals appear with a click of the mouse (and are presented with a handy savings calculator and information on reading your bill). It’s almost alarmingly easy—which is the whole appeal. Alphabuyer does the heavy lifting in terms of utility switching and rate negotiation. Consumers simply have to sign up and save.

Buyers walk away with a two-year fixed rate for electricity, and the sign-up and switch are cost-free. What seems like an obvious win for the consumer benefits alternative suppliers as well; Alphabuyer helps them reach new customer bases and brings customers in bulk, with little to no up-front costs.

Savings on the essentials should be attractive to Pittsburghers—even more so than to many others. Pennsylvania saw the second-largest rate hike in the country from 2009-2010. And Pittsburgh is ranked 15 on City-Data.com’s list of “Cities with Oldest Houses (population 50,000+),” which could easily read “Houses Expensive to Heat and Cool.”

Alphabuyer aspires to handle more than just utilities, however. Plans are in the works to cover mobile, Internet and television services—even gasoline. The business model applies across the board—as long as providers and consumers are willing to participate.

Of course, there are still kinks to work out. West Penn Power, for example, isn’t included on the site, and a recent deal from TriEagle was well short of the numbers needed for the most competitive rates.

Still, Johnson remains tirelessly optimistic. It takes time to build momentum, even in a promising market. “Big things are going to happen in the next few months,” he says. “It’s going to be revolutionary.”

Categories: Community Feature