Choice Available to Some But Those Choosing Are Few
According to a recent survey, one in six U.S. consumers, or 17%,
say they can now choose their energy suppliers. However, only 2%
have actually changed providers.
"In probing the reasons surrounding the switching decision, we
heard most consumers saying that energy companies still pretty much
all look alike," said Charleen Heidt, vice president of RKS
Research & Consulting, a national market research and public
opinion polling organization. "At the present time, customers see
very little difference between one supplier and another. But the
data suggest they will respond to a compelling offer from a
different entity that sets itself apart from the pack. Our findings
indicate that few energy companies are reaching out proactively to
their residential customers; the early entrants who do so may
rapidly build market share."
On the gas side, the U.S. Department of Energy's Energy
Information Administration found in a June survey that a total of
about 8% of the residential gas customers in the country are
actively choosing gas suppliers other than their local utilities.
EIA determined that while 45% of the nation's residential gas
customers are now eligible to buy gas from alternative suppliers
only about 18% (or about 1.8 million people) of those eligible (9.3
million) are doing so.
There is a wide variance in participation levels among consumers
who have a choice of gas suppliers. "In some states, such as
Nebraska, 97% of the eligible residential and commercial customers
are electing to choose their own suppliers. In other states, such
as Indiana and New York, participation is 2% or less of those
eligible," EIA noted in a survey summary.
For its survey, RKS interviewed 999 heads of households during
May and June and conducted consumer focus groups in Boston,
Pittsburgh, Houston, and San Diego. The survey found widespread
satisfaction with customers' current energy providers, with 75%
saying they would recommend their supplier to others. And 43% said
they are very likely to remain with their present supplier when
they have a choice. Loyalty drops off quickly --- to less than 20%
--- among households with frequent outages or billing and service
problems with their supplier.
RKS found that more than a third of U.S. consumers believe
deregulation and increased competition will make investing in
energy securities more attractive. Of those surveyed, one in 10
currently holds stock in one or more electric utilities or holding
companies. Customers who are more critical of their electricity
service and profess less loyalty to their current provider believe
deregulation will increase the investment outlook for energy
stocks, RKS said.
Joe Fisher, Houston
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