2011 JD Power & Associates Poll Released: Champion Energy #1 Again

Posted on Posted in Amigo Energy, Bounce Energy, Champion Energy, Direct Energy, Dynowatt, Fixed Rates, Gexa Energy, Green Mountain Energy, Reliant Energy, Spark Energy, StarTex Power, TER News, Texas Electricity News, TXU Energy, Variable Rates

The JD Power & Associates group has released their most recent survey of the deregulated electricity providers operating in Texas. In their own words:

The study, now in its fourth 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.

You can view the full results here, but I’d like to run down some of my thoughts about the winners and other participants below.

First, congratulations to Champion Energy, who has now won the award for a 2nd straight year. Their presence and reputation in the market continues to be excellent, and this survey supports that. Their score was a 745/1000. Landing in the 2nd spot was Spark Energy, which is their highest showing yet in this survey, with a score of 740/1000. Rounding out the top 3 was StarTex Power, a mainstay in this yearly poll, with a score of 739/100. As an interesting factoid, all 3 of these retail electricity providers are headquartered in Houston, Texas. And I’m personally proud to say that all of the top 3 REPs are also partners with Texas Electricity Ratings.

Other Texas Electricity Ratings partners fared well on the survey. Amigo Energy, Direct Energy, and Dynowatt all scored 4 out of 5 in overall customer satisfaction, as did Green Mountain Energy and Gexa Energy. Bounce Energy also scored a 4 out of 5 in overall satisfaction, which is extremely impressive considering this is their first year on the survey.

The incumbent electricity providers, TXU and Reliant, did not fare well at all on the survey. TXU Energy was rated last of all providers surveyed, with 2 out of 5 for overall customer satisfaction. Reliant Energy scored 3 out of 5.

I would encourage everyone to read the full press release, and it’s certainly worth reading, but I’m pasting almost the entire thing in this post anyway. Some more interesting facts from the PR below, with my thoughts:

Overall satisfaction among residential customers of electric retailers in Texas has increased to 659 on a 1,000-point scale in 2011—up by 25 points from 2010 and 30 points from 2009. While satisfaction has improved in 2011 in all four factors examined in the study, satisfaction with price improves most notably to an average of 644, increasing by 34 points from 2010. During the past several years, customer-reported bill amounts have declined steadily from a median of $167 in 2009 to $156 in 2010 and $150 in 2011. These price decreases are primarily due to declining natural gas prices.

Well, this seems to contradict Recharge Texas’s hilariously off-base statements about Texans being dissatisfied with deregulated electricity, which I already broke down: here.

Satisfaction with the billing and payment factor has also improved considerably, up 31 points from 2010. Contributing to this increase is a shift in payment methods, with a higher proportion of customers choosing to pay their utility bill electronically rather than by mail. Approximately 46 percent of customers indicate paying their bill either through a financial institution or utility website, while 23 percent of customers mail their payments. Satisfaction among customers who use online and electronic payment methods (recurring bank or credit card debits) is considerably higher than among customers using traditional methods (mail, phone or in-person payment).

I personally think this is a huge deal. It illustrates perfectly the kind of innovation that has been forced onto the market by competition. Not only for online bill pay, but mobile applications and any other kind of innovation that has taken place in the past 9 years. Competition forces companies to stay at or ahead of the curve, if possible. Some regulated electricity providers in other states don’t even have online bill pay yet.

And some final snippets:

  • It pays to shop around before deciding on an electric retailer. Customers who consider more than one electric retailer are substantially more satisfied than those who only consider one retailer.
  • It may be tempting to choose a retailer based solely on low prices, but this could result in being less satisfied. Customers who choose their retailer based on good customer service are notably more satisfied than those who make their decisions based on low price, reputation, past experience with a retailer or recommendations from family or friends.
  • Select your payment plan carefully. Customers who opt for a fixed rate plan—which guarantees a set rate during the entire length of the contract—are much more satisfied than customers who choose a variable price plan.
  • If you’re dissatisfied with your current electric retailer, consider switching. Among customers who rated their previous provider as “unacceptable” (one point on a 10-point scale) and switched to a new provider, satisfaction soars to an average of 747—nearly 90 points higher than the industry average.
  • 5 thoughts on “2011 JD Power & Associates Poll Released: Champion Energy #1 Again

    1. Reliant Energy has a scam going and the public needs to be educated on it. They advertise the “Basic Power Flex Plan” as .05 per kwh, yet when you look at the average price for the last 6 months it’s almost .10 per kwh. So I chatted online with their sales dept but couldn’t believe what I was told, so I called in. Sure enough, it was confirmed again that they have no intention of offering the .05 rate after the first month. That is purely a teaser rate not based on the cost of supplying the energy, but rather solely advertised to lure you in to their variable rate plan.

      How many people are falling into this trap I wonder??? I understand the underlying principles of variable rate plans and feel that if I’m willing to ride the uncertainty of the costs in the supply side I can gain/lose accordingly. However, this is not the case with their plan, at least not in the beginning. It’s deceptive, that’s the bottom line. It’s a pure bait & switch trick and now I refuse to consider any plan from a company that would so blatantly mislead people.

      Thanks for maintaining this website.

      1. David,

        Actually, this is pretty standard operating procedure for almost all the Electricity Providers on the market. Most of the guys who offer a variable plan offer it at an introductory rate. According to the laws of ERCOT, REP’s are allowed to advertise these plans at the Teaser Rate, as you called it, on Power To Choose and other sites. I actually wrote about this awhile back, and I wish ERCOT would change some of their rules in this regard. And they might still. However, for the time being, this is just how things work for variable rate plans. If one REP is going to advertise the Teaser Rate, the rest of them pretty much have to follow suit unless they just want to resign themselves to losing customers to the guys who DO advertise at the Teaser Rate. And while I’ve been HIGHLY critical of many of Reliant’s plans in the past, what they’re doing here is no different from 20 other guys in the market. However, you’re correct, people complaining about the huge increase of rates after month one is one of the most commonly complained about items I receive through my website: Texas Electricity Ratings.

        I think it’s fantastic that you actually looked at the average price for the past 6 months and did the research to understand the plan you were considering. I wish I saw more of that kind of thing. Unfortunately, I don’t, which is why I tend to advocate fixed rate plans to customers because there’s less uncertainty and at the end of the day they’re often cheaper than variable rate plans anyway. But in this one instance, Reliant isn’t doing anything different from a couple dozen other guys in the market. Basically, my rule of thumb is if you see “Introductory” or “Promotional” rates, just assume they’re going to go up by 40% of more the next bill.

        Thanks for reading the site.

    2. i’m going to bookmark you here so i will be able to read at your new articles whenever i want. thanks for helping.

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