shopping for power.
Although 88 percent of customers say they are aware they can switch to
alternative suppliers, only 45 percent have shopped, according to a statewide
survey conducted by Terry Madonna Opinion Research.
Twenty-three percent of residential customers statewide have switched,
according to the Pennsylvania Public Utility Commission. About 1.4 million
customers have switched.
Madonna and several electricity suppliers told the PUC on Thursday that
nearly a year after Pennsylvania’s retail utility deregulation went into full
effect, the public remains wary of shopping.
“There are a fair number of people who did not look into changing an electric
supplier because they didn’t believe there would be long-term savings in it,”
said Madonna, director of the Center for Politics and Public Affairs at Franklin
and Marshall College in Lancaster.
The poll results were presented Thursday at a PUC hearing on competition.
The surveys found that price was the main concern driving customers to
switch, but many said the perceived savings were insufficient to make them
switch.
Suppliers said some residential customers have recorded savings up to $300 a
year.
Madonna, who conducted his telephone survey of 801 customers in September on
behalf of Constellation Energy, said 78 percent said they would consider
switching if they could save 10 percent on their generation charge.
Many customers who declined to shop said they were happy with their current
supplier regardless of the cost.
Madonna’s findings were echoed by an Internet survey of 450 customers
conducted by AlphaBuyer, a Paoli group- buyer that markets online.
Forty percent of the customers said the savings were not worth it, said Kevin
McCloskey, AlphaBuyer’s chief operating officer. About 24 percent said shopping
was too confusing or the choices overwhelming. About 15 percent said switching
was too risky or that it was a “scam.”
Under Pennsylvania’s Electric Choice law, customers can choose a company that
markets the power. Billing is still conducted by the incumbent utility company,
which collects a fee for distributing the power.
Customers who don’t switch are still supplied by the utility at a default
rate.
Only 18 percent of customers had visited the PUC’s website for choosing a
supplier. PUC members said more customer education was needed.
“It’s perplexing to us with all the tools being made available to customers
we only see 20 percent of the residential customers shopping,” said Robert F.
Powelson, PUC chairman.
Our Perspective:
HBS has been dealing in the deregulated energy market for over 10 years. I have always been suspect of the proposed residential savings in this market. Most of the time you are offered a floating rate that may offer minimal savings.
The opposite is true in the commercial market. There are providers offering fixed price alternatives that offer a great opportunity for savings. HBS has found great success in the PA commercial deregulated market. We represent all the major providers selling electric in the PA market.
There is no upfront cost. Deregulated savings in the energy market has been a welcomed windfall for any business in both the New Jersey and Peennsylvania market who willing to look at the opportunity.
Hutchinson Business Solutions 