Electricity buyers with multiple facilities are eager toconsolidate power buying activities from myriad suppliers to just ahandful when competition comes, according to a recent survey.

National accounts – large businesses with multiple sites, suchas chain stores, franchises, banks, and restaurants – intend toreduce their roster of electricity suppliers by 80%. The currentaverage of 60.5 providers per chain will drop to 11.6 per nationalaccount as chains seek to consolidate energy purchase decisions.Restaurants and food chains forecast the greatest reductions.

These results highlight the fourth annual assessment of nationalaccounts customers conducted by RKS Research &amp Consulting, anationwide market research and polling firm. RKS interviewed 267energy decision-makers responsible for 173,000 separate businesslocations across the U.S. Current estimates are the nation’selectric utilities derive 25% of their revenues from nationalaccounts.

“These large and demanding businesses increasingly view energyas a commodity, with the result that price is now becoming themajor factor in the purchase decision,” said Carmine Grastataro,RKS vice president. “Utilities will have to choose between thestrategy of engaging in hard-nosed bidding for low-cost contractsor developing a national brand to package and differentiate theirproduct and service offerings.”

Not only do national accounts customers want suppliers toaggregate loads of their own facilities, they want suppliers toaggregate multiple companies with similar loads in order to derivethe greatest savings possible,” Grastataro said. For end-users withmultiple sites across the country, real-time pricing appears to bean unworkable prospect. Facilities are in multiple time zones, andthere are just too many sites to keep track of. “Real-time pricingoffers are very difficult for them to work with,” Grastataro said.”Real-time pricing scenarios make life much more complicated.”

National account respondents identified 12 companies for serviceand responsiveness to customers. The top vote-getter was SouthernCompany, followed by Duke, PG&ampE, AEP, and Cinergy. The balanceof the field includes Texas Utilities; Tennessee Valley Authority;SCE/Edison International; Florida Power &amp Light; Northern StatesPower, Virginia Power, and Washington Water Power. Enron alsoreceived high marks as a desired new source of services.

Most of the end-users who chose Southern Co. and Duke haveheadquarters in those companies’ service territories, Grastatarosaid. That shows proximity to the customer’s home office could bekey in the future.

The RKS survey shows some promising trends for energy servicecompanies and brokers. Nearly half of national accounts do not buyadditional services (uninterruptible power, inspections and powerconditioning, natural gas fuel cells, etc.) from their currentutilities. But 64% expressed interest in a bill combining gas andelectricity with water, sewer, and trash services. If that billdoesn’t also combine fees for service at each customer location,forget it. “If you don’t have summary billing, you won’t even beconsidered.”

The survey results clearly show simplicity of service andbilling is a key to winning national accounts. “In analyzing theseresponses and talking to these customers in focus groups, we seeopportunities for utilities and energy service companies torepackage their products, service offerings, and pricing plans. Thefact that large national chains want to reduce costs and simplifytheir workloads creates opportunity for those suppliers who arewilling to invest in a brand strategy and tailored serviceofferings.”

For copies of the study, contact RKS Research, (914) 277-6900.

Joe Fisher, Houston

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