The price is right. That’s the primary reason why satisfaction is higher among power customers who use a retail electric provider than among those who use a regulated utility in the Lone Star State, according to the “2013 Texas Residential Retail Electric Provider Customer Satisfaction Study” just released by J.D. Power, a global marketing information services company based in Westlake Village, California. .
Because Texas’ is one of 24 U.S. states in which the electric market is deregulated and competitive, customers have the opportunity to pick their own Retail Electric Provider (REP) and plan. With a wide variety of distributors and plans available in the marketplace, ratepayers may find a plan that provides significant savings or flexibility, or delivers renewable energy. Some REPs also have other value-added services, like air conditioning maintenance, rewards programs or other customer service benefits.
The study, now in its sixth year, measures the satisfaction of 7,708 residential customers of electric retailers in Texas by examining six key factors (listed in order of importance): price; billing and payment; corporate citizenship; communications; enrollment/renewal; and customer service. The study was fielded between September 2012 and June 2013.
Among Texas retailers, Champion Energy Services ranked highest for a fourth consecutive year, with a score of 764. The company performed particularly well in price; billing and payment; enrollment/renewal; customer service; and communications. Following in the rankings are Green Mountain Energy (737) and Bounce Energy (736).
Highest Satisfaction Since Study Began
This year, overall satisfaction among customers of retail residential electric providers in Texas is rated 682 on a 1,000-point scale—an increase of four points from 2012. This is the highest score since the study was first published in 2008.
Customer satisfaction with price—a primary driver of satisfaction in the study—has increases 20 points, to 684, from 2012. The average perceived price per kilowatt hour (kWh) has declined to 10.4 cents in 2013 from 10.7 cents in 2012. Texas electric retail providers outperform regulated utilities in Texas by 114 points in the price factor (684 vs. 570, respectively). What’s more, price satisfaction is highest among customers whose residential electric provider has made them aware of available energy savings measures.
"Deregulation of the residential electric market in Texas opened the doors to healthy price competition and also focused residential customers on finding the cost savings and service programs that match their needs," said Chris Oberle, senior director of the energy practice at J.D. Power. "Satisfaction isn't just about price. Retail electric providers must stay connected to their customers with clear, frequent and effective communications and quality customer touch points, including billing and payment, customer service, corporate citizenship, enrollment and beyond, to achieve a premier provider position."
Satisfaction with the effectiveness of communications has risen to a high of 638 since 2008. The frequency and recall of communications by electric retailers play an increasingly important role in customer satisfaction. Satisfaction is rated 717 among customers who recall communications from their retail electric provider (33 percent), compared with 666 among those who do not recall a communication (67 percent)--a dramatic difference of 51 points. The most frequently recalled methods of communication are email (36 percent); direct mail (30 percent) and bill insert (20 percent).
Two New Factors
Corporate citizenship and enrollment/renewal, two new factors in the 2013 study, debuted as important drivers of customer satisfaction.
Overall awareness of Texas REP corporate citizenship is low; however, customer satisfaction increases significantly when ratepayers are made aware of corporate citizenship efforts. For example, corporate citizenship satisfaction is 762 when customers are aware of their REP's impact on the environment, compared with 658 when they are not aware. The same general trend is observed when customers are aware versus unaware of their REP's local donations and sponsorships (738 versus 672, respectively) and volunteering/working in the community (763 versus 670, respectively).
Interestingly enough, the highest satisfaction recorded was in the enrollment/renewal factor (777). When customers are satisfied with their REP, they are more loyal to the brand, more likely to renew, and more likely to recommend the REP to family and friends. Nearly two-thirds (60 percent) of new customers who enrolled for service within the past 12 months had service with another retail electricity provider. The main reason customers cite for selecting their provider is a lower price (61 percent).
Edited by Blaise McNamee