Study: discounts needed to lure power consumers

Convincing most US customers to switch electricity suppliers could require offering them hefty discounts from existing charges, J.D. Power & Associates and Navigant Consulting Inc. found in a new study. The majority of those surveyed said it would take 15% savings to cause them to be very or somewhat likely to change electricity suppliers.


Convincing most US customers to switch electricity suppliers could require offering them hefty discounts from existing charges, J.D. Power & Associates and Navigant Consulting Inc. found in a new study.

US consumers, on average, are spending $88/month for power, unchanged from last year. If given a choice, 17% of residential consumers say they would definitely or probably switch power suppliers�with no significant difference in price.

Some 39% of those surveyed reported they would switch without a price discount. However, the majority said it would take 15% in savings to cause them to be very or somewhat likely to change electricity suppliers.

Delaware and South Carolina have the highest average bill at about $112/month, compared to Minnesota and Utah with the lowest average at about $60/month.

The report also found big utilities in four regions of the US are doing a better job this year compared to 1999 of restoring power outages. The average length of the longest power outage was cut to 5 hours in 2000 from 17 hours in 1999.

Customers in Alabama reported the highest number of service outages and interruptions at 8/year, followed by Utah and West Virginia with 7/year. Rhode Island customers reported the fewest outages with 3/year. Customers in Michigan reported the longest outages, averaging nearly 13 hours.

"As competition increases and consolidation continues for the electric industry, some companies will be left behind, if they don't improve overall performance and may eventually find themselves the target of a takeover," says Jim Gaz, director of energy services at J.D. Power.

Potomac Electric Power Co. ranked highest in customer service in the eastern US, followed by Allegheny Power Co. in second place. LG&E Energy Corp. ranked No. 1 in the Midwest, with Northern States Power Co. in second place.

Memphis Light, Gas & Water came in first in the southern region, while South Carolina Electric & Gas Co. ranked second. Salt River Project was named No. 1 in the western US, while Seattle City Light was ranked second.

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