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Customers Unhappy With Utility Deregulation

May 1, 2001 12:00 PM, By EC&M Staff

The introduction of deregulation and competition to electricity markets has so far brought disappointment and confusion — and few benefits — to major American businesses, according to a new national survey of medium and large commercial and industrial customers conducted by RKS Research & Consulting.

The survey revealed corporations that replaced their electric suppliers rate their new provider lower for price, performance, and value. Although they admit prices are lower, these businesses remain dissatisfied with the relationship, and they plan to start looking for another supplier.

North Salem, N.Y.-based RKS found less than half of the businesses located in competitive states believe they have the option of choosing their supplier.

Although events in California and the western states are attracting headlines, this survey indicates that deregulation awareness is actually highest in the Northeast and Mid-Atlantic. In fact, the largest multisite companies in New York and New Jersey register the highest awareness and lowest customer satisfaction scores.

Customers of electric cooperatives and municipal utilities give their suppliers higher scores for performance and value than firms served by investor-owned utilities, according to the survey.

“These latest results continue the pattern of customer disillusionment first documented near the end of 1999,” says Carmine Grastataro, RKS senior vice president. “Suppliers operating in markets preparing for deregulation — particularly Ohio and Texas — need to assume that the changeover process will lead to inflated expectations and customer dissatisfaction.”

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© 2012 Penton Business Media, Inc.

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