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Electric Choice: Who is Choosing You?

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Nevelyn Black is an independent writer with a background in broadcast and a keen interest in renewable energy.  In the last few years, she transitioned from celebrity interviews and film shoots...

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Customers in deregulated states can choose their electricity plan and provider.  If Senate Bill 695 is passed, in Michigan, industrial electric customers will also have an ‘electric choice.’  Supporters say allowing industrial customers to choose suppliers is an effort to reduce electric costs and attract investments. Michigan currently has a 10 percent cap on who can participate in electric choice and the majority of Michigan ratepayers are with DTE Energy or Consumers Energy.  If given a choice, who would your customers pick?  Will a little healthy competition keep rates low and improve the economy?  ABATE Executive Director Rod Williamson said the legislation “will help grow the Michigan economy by requiring utilities to actually compete in the market instead of giving monopoly suppliers a high rate of return.”  

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On the issue of monopoly suppliers, Tennessee Valley Authority (TVA) has been accused of ‘attempting to operate as a monopoly and without public power values.’  The federally-owned electric utility corporation has also been accused of withholding transmission upgrades to prevent local power companies from receiving power from outside suppliers.  Local municipalities and power co-ops haven’t said they will leave the TVA system but they have petitioned FERC to order TVA to provide access to transmission lines.  Should TVA welcome outside power producers to transmit electricity across their lines to local utilities?  How is retention accomplished in a competitive market?  On a smaller scale, once there has been a  delivery of goods, retention strategies like good first impressions, good communication, continued marketing and rewards for loyalty are employed.  

For utilities, offering reliability and resiliency is still their mantra.  In fact, according to the U.S. Energy Information Administration’s (EIA’s) report, customers felt utilities were doing a good job with reliability.  Regarding resiliency, in 2017, the average duration of customer interruptions totaled about two hours for the entire year, excluding weather events.  Of course, with the increase in extreme weather events, those numbers have changed significantly.  These events have slowed restorations dramatically. Some consumers have lost faith in the resiliency of their utility.  Consumers are looking to hardening, undergrounding and decentralizing the grid, while they invest in generators, solar-plus-storage and community energy systems as a solution to the problem.  

Roughly 2/3 of states are regulated and consumers in those states are unable to shop for electricity.  Are your customers loyal by default or have you earned their patronage through reliability and resiliency, competitive pricing and personalized customer communications?

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Brian Lindamood's picture
Brian Lindamood on Oct 25, 2021

Thanks for the post Nevelyn. There's no doubt that regulated utilities cannot take their customer relationships for granted. Beyond the specific deregulation efforts you cite, the fact is customer expectations have changed. Customers want and expect to have a responsive digital relationship with companies they do business with, including their energy providers. That relationship is what drives customer satisfaction and ultimately customer loyalty, even in the face of competition. 

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