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Despite an extremely severe winter and correspondingly high electricity bills, satisfaction with retail electric providers has improved dramatically from 2013, driven in part by improved communications, according to the J.D. Power 2014 Retail Electric Provider Residential Customer Satisfaction Study SM.
The study, now in its second year of measuring retail electric providers in competitive markets in addition to Texas, examines satisfaction among residential customers of 82 ranked retail electric providers in nine states across five key factors: price; communications; corporate citizenship; enrollment/renewal; and customer service. An additional factor, billing and payment, is measured in Texas.1
Overall satisfaction with retail electric providers (REP) in Texas is 706 (on a 1,000-point scale), an increase of 24 points from 682 in 2013. Satisfaction in the other eight states is 626, an improvement of 20 points from 606 in 2013. While Texas ranks highest overall, Pennsylvania (650) ranks highest among the other eight states.
Recall of communications increases dramatically in 2014. In Texas, 43 percent of customers recall an REP communication this year, compared with just 30 percent in 2013. Recall of communications also improves in the other eight states, to 29 percent in 2014 from 26 percent in 2013.
“One opportunity for retail electric providers to grow their customer base is by convincing consumers to switch from their local electric utility,” said Jeff Conklin, senior director of the energy practice at J.D. Power. “Nearly two-thirds of customers avoid switching because they don’t perceive the savings as being big enough to take the time to switch, or they are not sure how to go about switching. Retail electric providers need to help customers overcome these obstacles with better communication about the process and benefits of switching.”
- Perception of price has a strong impact on customer satisfaction. Price satisfaction is higher among customers on a fixed price contract (704) than among those on a variable pricing plan (636).
- Customers with a variable price plan in eight states paid higher bills this year because of big market price swings due to the severe weather. Price satisfaction among customers with variable plans declines by 27 points based on surveys completed during September and December 2013 when the price index was 630 compared with among customers surveyed in March and June 2014 (603). Satisfaction among customers with fixed price plans declines by only 10 points from 2013 (692 vs. 682, respectively).
- Reasons customers avoid switching to a retail electric provider are the bill savings are not big enough to switch (37%); they are satisfied with the level of service they presently get from their local utility (27%); they didn’t know how to switch (24%); and they are concerned about getting worse service if they were to switch (22%).
- Overall, 21 percent of customers plan to switch from their local electric distribution company in the next 3 months. More than one-fourth (27%) say they “definitely will” or “probably will” consider switching if they knew they would save up to $20 a month.
- Among all factors driving satisfaction, enrollment/renewal improves the least (+18 points) from 2013.
- In Illinois and Ohio, satisfaction among customers who have switched from their local electric utility via aggregation (communities negotiate a retail contract on their behalf) is substantially lower than among those who have chosen a REP on their own (619 vs. 647, respectively).