By Rich Heidorn Jr.
GROTON, Conn. — Electric retailers have made progress in moving away from the cutthroat price competition that shaved margins, but restrictions on billing and metering and “organizational inertia” continue to be challenges, a panel told the New England Energy Conference and Exposition last week.
Cullen Hay, general manager of Direct Energy’s residential operations in the Northeast and Midwest, said his company used acquisitions to grow in the past, as it joined other electric retailers in seeking price-conscious customers even as their costs went up. Power suppliers have fewer barriers to prevent customer attrition than cable TV suppliers, telecommunication companies or banks, he said.
“We all kind of lived under the same mantra that as one customer came in the front door, one customer would walk out the back door,” he said.
Over the last three years, however, electric retailers have begun to increase their customer engagement by offering additional services such as home warranties and rooftop solar, he said. “These are not gimmicks. These are the value-added things that the telecom industry found successful when they were handed a deregulated market,” he said.
“The new wave of the industry is knowledge …. Our mission statement is getting our consumers the information they need to make really intelligent decisions. And that goes with consumption-reduction tools like [the] Nest [thermostat] and online portals that allows them to see what their consumption looks like, what their community’s consumption patterns look like” to identify inefficient appliances and make informed decisions.
“That’s the retail, residential industry in the next five years. And it’s already happening.”
Progress, Challenges in Pursuit of C&I Customers
High capacity and transmission costs in regions such as PJM and New England are leading more commercial and industrial customers to welcome companies offering to improve efficiency in return for a share of the cost savings, said Dean Musser, CEO of Tangent Energy Solutions.
“The power customers [are] out there pushing and pushing for ways to innovate. And it’s up to us in this industry to capture that innovation,” he said.
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