Residential Customers Resistant to Changing Retail Electric Providers as Price Gap Closes

COSTA MESA, Calif., Aug. 10, 2016 /PRNewswire/ -- With the price/value gap narrowing between retail electric providers and regulated public utilities in deregulated states, fewer residential customers are switching providers, making customer satisfaction and retention more important than ever, according to the J.D. Power 2016 Retail Electric Provider Residential Customer Satisfaction Study,℠ released today.

Switching and renewal rates also are lower in the completely deregulated Texas retail markets.

In the nine states included in the study, half of delighted customers (overall satisfaction scores of 900 or higher) say they "definitely will not" switch providers, while 37% of pleased customers (750-899) and 25% of indifferent customers (550-749) say the same.

Additionally, indifferent customers indicate they would consider switching for a cost savings of $30 a month, and pleased customers cite a threshold of $35 a month. Delighted customers are most resistant to switching, citing a level of $46 a month to consider switching.

"Historically, the key differentiator between retail electric providers and regulated providers has been price, but that price gap has shrunk," said Andrew Heath, senior director of the utility & infrastructure practice at J.D. Power. "So, despite the best efforts of those providers to persuade customers to switch, they've been unsuccessful because customers don't feel incentivized to do so."

The study also shows that, in the past 12 months, customers have been shopping less often. In Texas, only 16% signed up with a new provider (vs. 18% in 2015) and only 41% renewed their service (vs. 44%). In the other states, only 20% signed up with a new provider (vs. 23% in 2015) and only 25% renewed their service (vs. 27%).

Nonetheless, overall satisfaction with retail electric providers in Texas is 730, an increase of 15 points from 715 in 2015. Overall satisfaction in the other eight states averages 646, an improvement of 14 points from 632 in 2015. While Texas achieves the highest score overall, New York (680) performs highest among the other eight states.

The study measures retail electric providers in competitive markets by examining satisfaction among residential customers of the 91 ranked 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. Satisfaction is calculated in a 1,000-point scale.

Retail Electric Provider Study Rankings (by state)

Connecticut: Ambit Energy ranks highest in Connecticut for the second consecutive year with a score of 735 and performs particularly well in the factors of communications and enrollment/renewal. Town Square Energy (715) and Connecticut Gas & Electric (684) follow in the rankings, performing above the Connecticut average (671).

Illinois: Nordic Energy ranks highest in Illinois with a score of 686, performing particularly well in the factors of communications, corporate citizenship and enrollment/renewal. Following in the rankings are AEP Energy (682) and Ambit Energy (644), performing above the Illinois average (627).

Maryland: Maryland Gas & Electric ranks highest in Maryland with a score of 695 and performs particularly well in the factors of communications, corporate citizenship and customer service. Following in the rankings are Direct Energy (683) and WGL Energy (669), performing above the Maryland average (662).

Massachusetts: Green Mountain Energy ranks highest in Massachusetts with a score of 702 and performs particularly well in the factors of price, communications and corporate citizenship. Direct Energy (677) and Massachusetts Gas & Electric (672) follow in the rankings, performing above the Massachusetts average (656).

New Jersey: New Jersey Gas & Electric ranks highest in New Jersey for the second consecutive year with a score of 711 and performs particularly well in the factors of price, communications and corporate citizenship. Ambit Energy (687) follows in the rankings, performing above the New Jersey average (676).

New York: Agway Energy ranks highest in New York with a score of 769 and performs particularly well in the factors of price, communications, corporate citizenship, enrollment/renewal and customer service. Green Mountain Energy (709) and New York Gas & Electric (700) follow in the rankings, performing above the New York average (680).

Ohio: Dynegy Energy Services ranks highest in Ohio with a score of 638 and performs particularly well in the factors of price and communications. IGS Energy (628) and FirstEnergy Solutions (620) follow in the rankings, performing above or equal to the Ohio average (620).

Pennsylvania: Green Mountain Energy ranks highest in Pennsylvania with a score of 709 and performs particularly well in the corporate citizenship factor. AEP Energy (706) and IGS Energy (705) follow in the rankings, performing above the Pennsylvania average (669).

Texas: Champion Energy Services ranks highest in Texas for the second consecutive year with a score of 793 and performs particularly well in the factors of price, billing and payment, communications, enrollment/renewal and customer service. First Choice Power (770) and 4Change Energy (769) follow in the rankings, performing above the Texas average (730).

The 2016 Retail Electric Provider Residential Customer Satisfaction Study is based on responses from 20,000 electric retail residential customers of the 91 ranked retail electric providers in nine states regarding their experiences with their retail electric provider. Online interviews were conducted August 2015 through June 2016.

NOTE: To see the nine charts that accompany this release, please click here: http://www.jdpower.com/pr-id/2016146.

Media Relations Contacts
John Tews; J.D. Power; Troy, Mich.; 248-680-6218; [email protected]
Geno Effler; J.D. Power; Costa Mesa, Calif.; 714-621-6224; [email protected]

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