Volatile prices decrease consumer satisfaction with Texas competitive retail suppliers

Michael Giberson

From a press release by J.D. Power and Associates:

Wide fluctuations in electricity prices during the past year have led to a decrease in overall customer satisfaction with residential retail electric providers in Texas, according to the J.D. Power and Associates 2009 Texas Residential Retail Electric Provider Customer Satisfaction Study released today.

The study, now in its second year, measures customer satisfaction with retail electric providers in Texas by examining four key factors (listed in order of importance): pricing; billing and payment; communications; and customer service. According to the Public Utility Commission of Texas, 45 percent of 5.5 million eligible Texas residential customers were served by competitive retail electric providers by the end of 2008.

See ratings for 15 electric retailers here.

One thing that kind of lept out at me when scanning the ratings: retailers associated with former regulated utilities in Texas appear to have the worst overall ratings.

Here are the worst rated companies and the former electric utility that the retailer is or was affiliated with.

Lowest, with a 2 out of 5 overall rating, is CPL Retail Energy (from the former Central Power and Light, once part of AEP) and First Choice Power (affiliated with the Texas-New Mexico Power Company). Scoring 3 out of 5 were TXU Energy (TXU of course), Reliant Energy (formerly with CenterPoint Energy, Inc.), GEXA Energy (non utility*), and Direct Energy (also affiliated with CPL and West Texas Utilities, previously part of AEP in Texas). (*GEXA was purchased by FPL in 2005, a Florida-based energy company affiliated with regulated utility Florida Power & Light, but GEXA is not affiliated with former Texas regulated utilities.)

Eight companies were rated 4 out of 5, and just StarTex Power achieved a 5 out of 5 rating. So far as I can tell – by visiting company websites, Wikipedia, Yahoo Financial, and other online resources – none of these top nine companies are affiliates or former affiliates of the pre-restructuring electric utilities in Texas.

Just to review, that is 5 companies that were or are affiliated with the pre-restructuring regulated electric utilities in the state, and all 5 are rated 2 or 3 out of 5 possible in overall satisfaction. A total of 10 companies do not have direct affiliations with the legacy Texas electric utilities, and 9 of the 10 are rated either 4 or 5 out of 5 possible in overall satisfaction.

Coincidence?