Texas residential retail electric service providers ranked by J.D. Power

Westlake Village, Calif., August 18, 2010 — Declining electricity prices have led to an increase in overall customer satisfaction with residential retail electric service providers in Texas, according to the J.D. Power and Associates 2010 Texas Residential Retail Electric Provider Customer Satisfaction Study released today.

The study, now in its third year, measures customer satisfaction with retail electric utility providers in Texas by examining four key factors (listed in order of importance): price; billing and payment; communications; and customer service.

Overall satisfaction among residential customers of electric retailers in Texas has increased in 2010 to 634 on a 1,000-point scale — up by five points from 2009.

Primarily driving this overall improvement is increased satisfaction with price, which improves by nine points from 2009 to an average of 610 in 2010. In addition, satisfaction with the communications and billing and payment factors have also increased from 2009.

“Natural gas prices have stabilized from the volatility seen during the past few years, which has led to lower rates and greater satisfaction with price among electric retail customers,” said Jeff Conklin, senior director of the energy and utility practice at J.D. Power and Associates. “Typical customer-reported bill amounts have declined to an average of $156 in 2010 from $167 in 2009.”

Champion Energy Services ranks highest among retail electric utility providers in Texas and achieves a score of 737. Champion Energy Services performs particularly well in the price, billing and payment and customer service factors. Following in the rankings are Amigo Energy (717) and StarTex Power (716).

In 2010, a shift toward switching providers has emerged, with only 41 percent of customers indicating they have been with their current provider for three years or longer, compared with 49 percent of customers in 2009 who said the same.

The study finds the primary reason that retail customers switch providers is to take advantage of a better deal offered by a competing retailer. Slightly more than one-fourth of retail customers indicate they “definitely will” stay with their retail provider, while 15 percent of customers indicate they “probably will not” or “definitely will not” stay with their current provider.

The study also finds that slightly more than one in 10 retail customers in Texas indicate they are “highly committed” to their electricity provider. Among highly committed customers, overall satisfaction averages 864 — nearly 200 points higher than satisfaction among customers with medium commitment levels and more than 350 points higher than satisfaction among customers who have low levels of commitment.

In addition, highly committed customers are much more likely to stay with their provider and to provide positive recommendations about their retailer, compared to less-committed customers.

“Satisfying retail electric utility customers is an ever-changing process with respect to improving pricing and presenting better offerings and promotions,” said Conklin. “As competitive pressures grow in the Texas retail market, retail providers will need to continue finding ways to maintain long-term relationships with their current customers, as well as implementing innovative products and improving existing services. Creating loyal and committed customers allows retail providers to maintain positive brand appeal and to attract and enroll new customers.”

The study also includes the following key findings:

Nearly one in 10 retail customers in Texas in 2010 indicates using power that is fully green or renewable—an increase from 7 percent in 2009. Green pricing plans are notably more satisfying than other pricing plans, with satisfaction among customers with green pricing averaging 120 points higher, on average, than satisfaction among customers with different pricing plans.

The primary reason cited by customers regarding why they are unlikely to continue using their current provider is poor customer service. Approximately 14 percent of customers in 2010 report receiving poor customer service, compared with 12 percent in 2009.

Retail customers are most likely to recall televised communications from their providers, compared with other methods of communication, such as bill inserts or radio ads. However, customers indicate the most satisfying method of receiving communications from their electric retailer is e-mail.

The 2010 Texas Residential Retail Electric Provider Customer Satisfaction Study is based on responses from more than 7,300 residential customers of electric retailers in Texas. The study was fielded between September 2009 and June 2010.


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