Electric providers face barriers in energy services mart

By Staff -- Purchasing, 6/1/2000

A recent survey by North Salem, N.Y.-based RKS Research and Consulting finds that only one in four businesses are aware of competition and choice in electric power supply. However, among large power users-spending $200K or more per month-the survey finds more companies shopping, switching and re-evaluating their energy suppliers. "Already, nearly one in five key accounts in deregulated markets have switched their suppliers-double the result of just six months ago."

At this time, RKS suggests that power buyers are less interested in traditional suppliers' service offerings than in commodity deliveries of electric power. "According to the RKS findings, some eight in 10 U.S. businesses-83%-now use their energy supplier only for delivery of electricity, an increase of three percentage points from six months ago." Meantime, RKS reports that only 14% of business customers look to electricity providers for energy consulting, additional products, or services. What's more, RKS says, "majorities of business customers believe that electricity delivery performance is the key criterion for choosing an electric supplier."

Rick Ginter, director of research for RKS Research and Consulting notes that, "These latest and lower scores show that business customers are still focusing on the commodity delivery service from their present supplier. This perception threatens to relegate the traditional utility to a narrower role as customers turn elsewhere for the new products and services they seek."

The survey does, however, find that more than seven in 10 business customers and eight in 10 large accounts indicate interest in seeing additional energy-related offerings from their electricity suppliers. "These results," Ginter says, "show that interest is growing among business customers in a broader electricity-plus 'relationship with their energy suppliers."