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Nearly 80% of Floridians Support Energy Choice, ACCES Survey Says

Survey Shows Consumers Strongly Support Maintaining Existing Energy Choice, ACCES Says

June 7, 2017

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Copyright 2010-17
Reporting by Paul Ring •

A survey conducted for the American Coalition of Competitive Energy Suppliers (ACCES) of consumers in Florida and Ohio found that, "consumers are overwhelmingly in favor of choice."

The survey found that 78% of Florida energy consumers believe consumers should be given competitive choices to meet their energy needs, while showing 72% of Ohioans are satisfied with energy choice.

"The survey results send an unambiguous message to all energy policy stakeholders: customers value choices," ACCES's report said

"Results from this study indicate that where competitive markets do not exist, customers are eager to have more energy choices available to them. The survey also suggests that customers in states with retail energy competition strongly support maintaining their existing choices for their energy use," ACCES's report said

Ohio and Florida were selected as the markets to measure for the survey for three specific reasons. First, both are populous states (seventh and fourth largest in the country, respectively), providing a reasonable basis for the extrapolation of insights to the general population of the United States. Second, both are widely recognized by political analysts as "swing states," thus minimizing the risk that a political slant by a state’s citizens would likewise slant measured attitudes toward competition and regulation. Third, and most importantly, both provide illustrative examples of the particular market structures in which ACCES sought to measure consumer opinion. Ohio has robust electric and natural gas choice, while Florida maintains vertically integrated monopolies for electricity, and has limited natural gas choice programs in certain areas.

"Despite these stark differences between the two states -- emblematic of the differences between all 50 U.S. states -- the unmistakable preference among consumers is for maintaining or extending energy choice," ACCES's report said

The survey found, "no matter whether consumers have had choice for a number of years, such as in Ohio, or really have not had much choice at all, in Florida, that they're both interested in choice," and, "they want choice," said Michael Meath, spokesperson for ACCES

The survey confirms that "everything that holds true in the transportation industry, the cell phone industry, travel, retail, housing -- people want to be able to determine where they spend their money and what they spend it on," is equally applicable to energy, Meath said

Turning to the Florida survey results, despite being a non-competitive market, roughly half of Florida energy consumers are aware that, "some states allow you to choose a company other than the utility to provide you with electricity and natural gas" (47% yes, aware / 48% no, not aware). An overwhelming 78% majority of Florida energy consumers found that, "consumers [should] be given competitive choices to meet their energy needs" instead of stating that, "electricity and natural gas products and rates [should] be controlled by government mandate" (10%).

Three-out of-four Florida energy consumers would favor, "the Florida legislature passing a bill which would allow Florida consumers to choose their suppliers of energy" (75% favor, 10% oppose, 8% no opinion). A near-majority of respondents would strongly favor such a bill (47%), the survey found

Nearly three-quarters (72%) of Florida energy consumers agree that the Florida Public Service Commission, "should enforce consumer protection rules and control distribution costs while allowing competition and innovation," the survey found

In Ohio, 84% of survey respondents were aware that the state allows consumers to choose a company other than their utility to provide them with electricity and natural gas.

Respondents in Ohio who have elected to shop for their energy needs reported favorable outcomes. A combined 72% of consumers are satisfied with the competition and resulting energy choice available in Ohio, ACCES's report said (16% extremely satisfied, 24% very satisfied, and 32% somewhat satisfied).

At the completion of the survey, Ohio respondents were asked to provide any additional anecdotal experiences. "The majority of the responses were positive, indicating that consumers were generally pleased with their competitive supplier and intended to continue to take advantage of the energy choice options in Ohio," ACCES's report said

Consumers in Ohio who have elected to purchase their electricity and natural gas from competitive suppliers have reported they were happy with the options and found shopping to be a generally easy process. However, some consumers did express frustration with certain practical aspects of energy choice markets. For example, one concern that some respondents raised was the difficulty in "staying on top of" contract renewals. Continued efforts by both PUCO and suppliers to educate consumers on how to best compare an offer and understand energy contracts and bills may help to alleviate some of these types of frustration," ACCES's report said

In Ohio, for the 44% of consumers who have not chosen to purchase natural gas or electricity from a competitive supplier, the predominant reason is because they are, "comfortable with [their] current local utility provider" (47%).

Mirroring the Florida results, 72% of Ohio consumers believe that government oversight is important to ensure customer protection but believe that competition is by far the most fair and equitable way to advance and regulate the market.

Seventy-one percent of Ohio respondents describe competitive choice in, "other aspects of [their] life as a consumer, such as cell phone plans, internet and cable, and transportation" as either extremely (36%) important or very (35%) important. Younger Ohio consumers are the most likely to place a premium on choice in all aspects of their life. Seventy-seven percent of consumers surveyed in the 18–34 age bracket described the importance of competitive choice as a consumer as being extremely important (42%) or very important (31%). Similarly, in Florida, when asked about the importance of competitive choice, nearly 80% of consumers describe competitive choice as extremely important (37%) or very important (41%) in other aspects of life as a consumer, including cell phone plans, internet and cable and transportation.

In both states, price was an important, but not dominant factor, in consumer choices. In Ohio, 43% of respondents chose a factor other than price as their primary consideration when comparing energy products. Factors of concern include sustainability, environmental factors, and energy-related value-added services. Interest in energy-related value-added services, such as warranty service, increases among those who say they are extremely satisfied with competitive choice in Ohio (21%). Some 45% of Ohio energy consumers say price is their primary consideration when comparing energy products

Similarly, if Florida consumers could choose their energy supplier, 47% stated they would choose factors other than price to meet their energy needs and definition of value, including the ability to lock in a rate, choose a renewable source of energy, obtain energy equipment service, and have brand recognition. Price does remain a significant factor for Floridians, however; with 45% of the respondents electing "dollar savings" as the most important factor in deciding between providers. Secondary considerations include "ability to lock in [a] rate" (15%), "ability to choose renewable energy" (12%) and ability to obtain "energy equipment service" (10%).

Based on such results, ACCES concluded in its report that, "while price is a significant factor in driving consumer decision-making, a price-only approach to market design and regulation could lead to major opportunity costs in consumer satisfaction. Environmental and sustainability concerns, flexible contract terms, and an interest in value-added services like energy efficiency and home warranty protection are just a few of the options that consumers have identified as important to their decision-making. When state regulators focus solely on price as a determinant of market success, this additional value found in retail competition is lost."

Meath cited the consumer experience with mobile phones as illustrative of the value-add choice can bring, where customer satisfaction may increase despite a higher total spend (due to additional value received for such higher spend). ACCES's report noted that, according to the U. S. Bureau of Labor Statistics, "[a]nnual expenditures for cellular phone services increased from $608 per consumer unit in 2007 to $963 in 2014 -- an increase of 58.4 percent." At the same time, according to the Pew Research Center, cell phone ownership has increased from 75% of U.S. adults at the end of 2007 to 95% at the end of 2016; smartphone ownership has increased even more significantly, from 35% of U.S. adults in 2011 to 77% in 2016.

The higher spend comes as the value of telephony was transformed from simple communication to an instantaneous information resource and connectivity mechanism -- one valued and eagerly adopted by consumers. Innovations made possible through transformative energy marketplace changes and choice, whether this be from unlocking consumers' energy data and/or integrating energy as the foundation for a smart home -- could similarly bring enhanced value to customers exercising energy choice, making a price-only comparison inapt.

"Consumers recognize value in a competitive market beyond cost savings alone," ACCES's report said

With regards to consumer satisfaction with their utility, most respondents in the survey indicated they were happy with the reliability that the utility provides, but frustrated with the lack of choice and price. "In many energy markets around the United States, consumers are still unaware of how choice works, and the independent, important role that utilities play in a competitive market. Educating consumers is about more than listing alternative suppliers -- homeowners and businesses alike need to understand how competitive suppliers and utilities work together to procure and deliver energy," ACCES's report said

"[C]onsumers are generally satisfied with the service provided by their local utility, but want that service to continue without compromising opportunities for new energy options. This suggests the model used by competitive markets may be a good approach for states like California, Nevada, and others, that are considering retail energy choice. In competitive states, delivery, reliability and safety remain the top priorities of the utilities while competitive energy suppliers provide most of the commodity and value-added services. Some states (Texas for electricity, Georgia for natural gas in the largest gas utility territory), have gone so far as to remove utilities from any energy supply role, thereby focusing the companies solely on delivery, reliability, and overall safety of the distribution system. This approach balances consumers’ desire for innovation and choice with their trust and confidence in utilities as managers of the distribution system," ACCES's report said

"Results from this study indicate that where competitive markets do not exist, customers are eager to have more energy choices available to them," ACCES's report said

"The survey also suggests that customers in states with retail energy competition strongly support maintaining their existing choices for their energy use," ACCES's report said

"The survey results provide policymakers with data to support the intuition that markets exist to serve consumer needs, and should be designed and communicated to customers with the understanding that choice matters, and matters greatly, to most consumers. At the same time, regulators and legislators cannot discount valid concerns about ensuring that markets function with appropriate oversight. As evidenced by survey responses in both Florida and Ohio, consumers overwhelmingly believe regulators have a vital role in maintaining consumer protections, but want to ensure regulations do not limit the potential for new, innovative products and services," ACCES's report said

"For these reasons, ACCES urges policymakers to follow the consumers’ lead and keep energy markets policy flexible and adaptable to ever-evolving consumer preferences, while maintaining sensible consumer protections," ACCES's report said

ACCES serves as a resource for consumer education and to policymakers. The activities of ACCES are specifically limited to consumer education; the coalition conducts no lobbying, sales, marketing or promotional activities on behalf of any individual ACCES member.

The sample size for the survey was 500 energy consumers each in Ohio and Florida; which resulted in a margin of error of +/- 4.3%. Responses were gathered via live operator interviews with respondents on cell phones and landlines. The total percentages for responses may not equal 100% due to rounding. The survey was conducted between the dates of February 1–5, 2017, by Harper Polling of Harrisburg, Pennsylvania, which ACCES described as a nationally recognized survey research and polling firm utilized by members of Congress, public policy organizations and issue advocacy groups

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