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Contact: Brian Waldron
Phone: 302 379-7331
Email: bwaldron@alphabuyer.com



New Survey Reveals High Awareness of Deregulation, But Pervasive Apathy Among Consumers

PAOLI, PA, July 5, 2011 – While nearly 90% of Pennsylvania residents are aware of energy deregulation, only 20% have switched to an alternative supplier despite the lure of substantial cost savings. In response to the rising debate over why more people have not switched, Alphabuyer, a new group buying company for essential household services such as electricity and natural gas, commissioned the first objective research which examined consumer awareness and sentiment toward energy deregulation. Among the results, the number one reason (40% of respondents) consumers have not switched is because the perceived cost savings was not significant enough to make switching energy providers worthwhile. 

This sentiment that the savings are not significant enough to switch was consistent across populations – men (44%) and women (37%), younger residents (29% of 18-44 year olds) and older residents (47% of those 45 and older), lower income earners (36% of those earning less than $50,000 per year) and higher income earners (44% of those making over $50,000 per year). 

Given that electricity rates in the PECO area have jumped more than 50% in the past year, it is interesting to see that more people do not find the potential savings worthwhile.  By changing to an alternative electricity provider, residents in the Philadelphia region could save more than 15% on their home energy bill with no switching fees or early cancellation costs and no risk to their current electricity service.  For the average PECO customer, this equates to a cost savings of about $150 per year.

“In these tough economic times it is startling that people are passing up on what is essentially free money,” said Alphabuyer CEO Kevin Johnson.  “On the whole we need to do a better job of communicating the cost savings to consumers and simplifying the process, making it easier for people to compare and switch.  Alphabuyer strives to reduce all the noise in the marketplace by negotiating on behalf of all consumers to achieve best-in-market rates, terms and conditions in each region.  Consumers can easily reduce their home energy costs without incurring any risk to their electricity or natural gas service.”

Zoomerang Data Service

A total of 477 people were surveyed across the state from June 9 to June 13, 2011 by Zoomerang Data Service.  The survey consisted of 10 questions asking respondents about their awareness and attitudes regarding energy deregulation.

Other Findings

Awareness of energy deregulation increases with age, with three-fourths of 18-34 year olds aware and a full 98% of 55 and older residents aware.

Consumers are generally less aware of natural gas deregulation (54% are aware they can switch to an alternative natural gas provider) even though competition for natural gas supply has been allowed in Pennsylvania since enactment of the Natural Gas Choice and Competition Act in 1999.  This is significantly less than the 86% of consumers who are aware they can switch to an alternative electricity provider.

While consumer apathy was cited as the most common reason for failing to switch energy providers, the survey illuminated additional reasons.  Twenty-four percent of Pennsylvanians indicated that the process of switching confuses them or are overwhelmed by the number of alternative energy providers and their various rate structures.  Another 15% of residents were concerned about potential risks from switching to a new energy provider.

Distinctions Across Regions

While awareness levels and switching rates vary across regions, consumer sentiment is fairly consistent across the state.  Residents in the Philadelphia and Lehigh Valley region have the highest awareness of electricity deregulation (93% vs. 86% statewide) yet no higher switching rates for electricity (18% vs. 20% statewide) and has the lowest switching rates for natural gas (2% vs. 8% statewide).  These low switching rates are explained somewhat by the fact that Philadelphia and Lehigh Valley residents showed the highest level of apathy, with 67% stating they don’t think the potential cost savings is significant or they don’t have time to comparison shop among alternative providers (vs. 53% statewide).

Residents in the greater Pittsburgh area have the highest awareness of natural gas deregulation (72% vs. 57% statewide) and the highest switching rates both for natural gas (19% vs. 8% statewide) and for electricity (25% vs. 20% statewide).  Consumer sentiment in the greater Pittsburgh area mirrored the state averages.

Residents in the central part of the state area have high awareness of both electricity deregulation (88% vs. 86% statewide) and natural gas deregulation (52% vs. 57% statewide) yet the lowest switching rates for electricity (4% vs. 20% statewide) and low switching rates for natural gas (3% vs. 8% statewide).  Low switching rates in the central Pennsylvania seem more to do with the process, with 46% stating they are confused by the process or overwhelmed by the number of choices (vs. 24% statewide), and the potential risks (29% vs. 15% statewide).