NGI The Weekly Gas Market Report
A new study finds all is not well with the relationship betweenenergy marketers and service companies and their commercialcustomers. Indeed, BENTEK Energy Research says “commercialcustomers feel marketers and ESCOs promise prices that are notrealized, underperform on services, and they are not meetingcustomers’ needs in helping to reduce their energy consumption.”
The study found large commercial customers embrace energyderegulation and want to centralize their energy procurement andmanagement functions into a limited number of suppliers, but theyare distrustful of prospective suppliers and service providers.Commercial customers perceive non-utility energy companies aspromising prices that frequently cannot be realized. In addition,several survey respondents expressed skepticism that energycommodity suppliers will aggressively help them reduce energyconsumption. Service companies, particularly those related toequipment manufacturers, are also viewed as too prone to promotetheir own company’s equipment instead of recommending the “best”solution.
Customers or prospective customers in 10 industries weresurveyed: schools, hospitals, office buildings, warehousing,grocery stores, hotels, dry cleaning, restaurants, retail, andlight manufacturing. Some have had more experience with energymarketers than others, said BENTEK Project Manager Michael Hoehn.”If you look at the dry cleaning industry, that’s an industry thathas been significantly penetrated [by marketers]. A lot of thosedry cleaners have been burned and been burned in very bad ways.”Hoehn said one of the dry cleaners in the survey ended anassociation and was in the process of looking for another marketerwhile the survey was taking place. Industries that have not had asmuch direct experience with marketers have their impressions shapedby others. They hear negative comments about marketers and ESCOsfrom other businesses and industry trade groups, he said.
BENTEK says commercial customers are ripe for aggregation, andone route to aggregating customers is through various industrytrade associations. However, Hoehn noted, many of theseorganizations are only regional in scope. And on the other hand,nationwide marketers still lack the ability to deal with LDCtariffs across the country, which means there still is a place forregional or niche marketers, Hoehn said.
“The slim margins available to marketers operating behind mostLDC territories makes sales to the commercial market highlyproblematic,” said Porter Bennett, BENTEK president. “Marketersneed to find ways to provide value to customers beyond that whichis inherent in the commodity. Becoming a total energy solutionsprovider is one way to achieve this goal.”
Joe Fisher, Houston
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