Resurgence for Retail Electricity Choice and Competition?

EcoPinion Consumer Survey Points to Growing Support and Context for National Dialogue

88 Percent of American Consumers Surveyed Think Retail Electricity Competition is a Good Idea

Washington, DC … EcoAlign, a strategic marketing agency in the energy sector, released the findings today of a consumer survey examining customer perceptions and attitudes in regard to consumer desire for more choices and more competition in the retail electricity sector. 1,000 Americans nationwide responded to the survey conducted in late March 2011.

“Americans clearly are looking for more choices regardless of whether provided by a regulated utility, a competitive energy supplier or a non-traditional market participant.”

Jamie Wimberly, CEO, DEFG

“Like the 1990s, the coming decade in the U.S. electricity sector will be driven by structural forces – rising prices, reliability issues, demand for alternative energy sources, smart grid, and so on – that would encourage a move toward competition and the delivery of more choices to retail consumers,” stated Jamie Wimberly, CEO of EcoAlign. “So, we asked consumers what they thought about more choices and competition for retail electricity, and they clearly support the concept.”

The top line findings from EcoPinion No. 11 include:

  • The findings of EcoPinion No. 11 clearly point to overwhelming support for the concept of competition in the retail purchase of electricity. Eighty-eight percent of those surveyed thought it was a good idea. This holds true across all demographic segments and geographical regions of the country, and younger Americans (18-34) have even stronger support (90%) than older Americans (55+ years) (84%).
  • Americans are not particularly well informed about the prevalence or existence of electricity restructuring. More than one quarter (27%) do not know whether they can purchase electricity from someone other than their local electric distribution utility. This is especially true of younger Americans (18-54 years) (32%) and renters (31%).
  • Over half of Americans (53%) are not aware that several states allow consumers to purchase home electricity from someone other than their local electric utility. This, too, is especially true of younger Americans (57%) and renters (58%). An additional 14% of Americans don’t know; that is, they have no opinion one way or the other.
  • When asked to indicate the response that is more important to them – “greater variety of choices” or “more competition among suppliers” – Americans gave a slight edge (53%) to “more competition.” Men (59%), older Americans (63%) and homeowners (62%) prefer “more competition.” Women (53%), younger Americans (51%) and renters (58%) prefer “more choices.”
  • Americans associate “energy deregulation” with a mix of negative and positive ideas. The most prevalent ideas mentioned when asked for one word to describe “energy deregulation” were: “higher costs,” “competition,” and “choice.” Many other words used to refer to energy deregulation, however, such as “loss of government control,” “government,” “lower costs,” “cheaper,” etc.
  • When asked, “If your local electric distribution utility or energy supplier was to offer two new services for your home, which ones would you choose?” Half (50%) stated a strong preference for “solar programs.” Significant numbers are interested in “energy efficient lights” (35%), “budget billing” (34%) and “green pricing” (31%). Budget billing was more appealing to renters than home owners (39% v. 29%). Women are more interested in green pricing compared to men (34% v. 27%).
  • Americans would pay a little extra for electricity if they received “new and better products and services” (55%), “faster restoration after outages” (53%), “a more diverse fuel supply” (44%), “convenience and no hassles” (40%), “excellent customer service” (38%), and “new payment & communications channels” (24%).
  • With respect to their “greatest concern about the electric industry,” more than half of Americans (58%) selected “electric rates increase too often” among five listed concerns. No other response was even close. One in five (21%) stated that they have “little or no concern” about the electric industry.
  • The respondents were asked to compare pairs of words regarding their electric service and indicate their preference. When considering the following pairs, Americans selected:
    • “Value” (53%) over “discounts”
    • “Solving problems the first time” (65%) over “faster service”
    • “Lower prices” (72%) over “lights on 99.9% of the time”
    • “Energy management” (52%) over “budget management”

“Our research is beginning to point to increased levels of consumer engagement and a willingness to consider different options including premium services and pricing opportunities,” stated Jamie Wimberly. “Americans clearly are looking for more choices regardless of whether provided by a regulated utility, a competitive energy supplier or a non-traditional market participant. Is competition the best way to deliver more and better choices to consumers? Many Americans are conceptually inclined to say yes. But as we have learned from past experiences with restructuring, the details matter a great deal. Those companies with the most at stake will be the most engaged in shaping those details.”

EcoAlign is making the survey report available to the public at no charge.

EcoAlign is the energy and environment marketing agency and a wholly-owned affiliate of DEFG LLC. We develop and execute marketing strategies for utilities, renewable energy providers and vendors operating in the energy and environment space. We are uniquely suited to help companies achieve their business objectives, from reaching efficiency program targets and improving customer satisfaction, to launching new products, increasing market share and repositioning for growth in the clean tech space.

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