Four-in-Ten Small Consumers and Eight-in-Ten Large Consumers Participate in Competitive Electricity Markets

ABACCUS Highlights the Value of Shopping for Electricity

HOUSTON – July 28, 2015 – Millions of electricity customers in North America live in states and provinces that allow them to shop for electric service. At least seventeen million residential consumers (forty-three percent of those eligible) and most large business consumers (eighty percent of eligible consumption) have exercised their right to choose, according to the Annual Baseline Assessment of Choice in Canada and the United States (ABACCUS), a report released today by Distributed Energy Financial Group LLC (DEFG).

“After 15 years it is now crystal clear that Texans can save money under retail electric competition.” Chairman Donna Nelson, Public Utility Commission of Texas

“A variety of electric service choices is available to residential consumers in North America,” said Nat Treadway, DEFG managing partner and lead author of the report. “A key feature of choice relates to electric price risk. Most consumers lock in a price that is not subject to market volatility or changes in regulatory decisions. Others prefer bargain shopping, and they willingly and frequently switch providers. In Texas, the best deals for residential consumers reveal commodity prices far below the regulated rates of 15 or even 20 years ago. Commercial and industrial consumers are also satisfied. More than eight-out-of-ten units sold to the largest business consumers in a dozen U.S. states rely on direct retail access between consumer and supplier,” he said.

“After 15 years it is now crystal clear that Texans can save money under retail electric competition,” said Donna Nelson, Chairman of the Public Utility Commission of Texas. “When customers take time to shop for the best value, they can find a rate that is actually lower than the regulated rates they were paying when they had no choice.”

The ABACCUS report recognizes Texas as the leader in competitive retail electric markets for the eighth consecutive year. In addition, the Canadian province of Alberta, and the U.S. states of Connecticut, Illinois, Maine, Maryland, Massachusetts, New Jersey, New York, Ohio and Pennsylvania were all recognized as leading competitive retail electricity markets. Each jurisdiction is making regulatory reforms that will have an impact on the ABACCUS scores and rankings.

“From accelerated switching to our newly redesigned PAPowerSwitch website, there are clear reasons why Pennsylvania continues to shine as a haven for competitive retail shopping,” said Robert F. Powelson, Commissioner of the Pennsylvania Public Utility Commission and member of the ABACCUS Advisory Board. “My colleagues and I are very excited to see continued progress with retail offers and new market enhancement programs that are driving further competition in the market. Further, we are committed in Pennsylvania to maintaining the long-term viability of the marketplace.”

“Retail choice has helped keep Illinois electric rates competitive and low,” said Ann McCabe, Commissioner of the Illinois Commerce Commission. “As of May, more than 60% of residential customers receive electricity from a competitive supplier, about 2.7 million customers.”

The ABACCUS report explains how consumers shop for cost savings and numerous other valued features of service. “In addition to locking in prices, consumers may prefer a convenient bill payment feature, or power generated by a renewable resource or a time-of-use option that encourages load shifting. We are also seeing on-site power generation and storage integrated with shopping for electricity,” said Mr. Treadway. “It’s exciting to see consumers provide real-time feedback as a result of their shopping habits and changes in behavior. Retail energy providers rely on advanced metering infrastructure to respond to consumer preferences. REPs are improving their understanding of usage patterns and they are purchasing power more efficiently and developing the services that consumers prefer.”

DEFG develops ABACCUS scores and rankings based on data available in the market. ABACCUS provides a baseline for building a properly-functioning competitive retail electric market. Copies of the full report are available at http://defg.local/publications/consumer-choice/.

DEFG is a management consulting firm specializing in energy, focused on retail consumers. We conduct research and help clients improve customer service, increase customer engagement, apply customer-facing technologies and increase the value of the smart grid.

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