Although millions of Texas electric customers are saving money by shopping for their energy provider, there is still a big language gap when it comes to customer understanding of competition and choice, President and Chief Operating Officer David Roylance told a forum on electric deregulation hosted last week by the Dallas Morning News. 

Roylance, a 25-year energy industry veteran, noted that, under customer choice, "costs have gone from being a source of profit for retailers to a destroyer of profit."  Roylance explained that, before competition, electric utilities earned profit on their "rate base," or their retail costs and physical assets like power plants and transmission wires, at a guaranteed rate of return.  That increased incentives for utilities to spend more on operations than needed, because it meant that they had a larger rate base on which to earn a profit.

Under competition, where electric companies only make money by getting customers to choose them, costs have to be as low as possible in order to attract customers with low electricity rates, while offering great service.  These lower operating costs will mean savings for Texas electric customers.

However, today's energy suppliers still have a "language problem" when it comes to offering customers lower rates and new products under competition, Roylance added.  The industry still talks in kilowatt-hours, a measure of electric usage, but most customers do not think or talk in kilowatt-hours, Roylance said.  Customers think in terms of how much they spend on their monthly electric bill ($100, $150), or how much it costs to set the thermostat at 78 degrees.

Roylance noted that there are some "enabling efforts" underway for energy suppliers to talk in a language more meaningful to customers, and is optimistic that customers will see a shift away from cents per kilowatt-hour to a flat monthly rate in describing the cost of an electricity plan, and in comparing different products.

The lack of a consumer-friendly language makes it "very confusing" today for customers to compare electric rates and providers, Roylance added.  But also confusing for customers is the more than 100 offers available for residential customers from about 30 electric companies.

"SaveOnEnergy is part of the innovation that is trying to fill that gap," in customer awareness and understanding, Roylance said. seeks out the attractive rates and providers, and posts the best electric rates and products in an easy to understand comparison, instead of a broad laundry list of general offers customers may see elsewhere.

Additionally, allows customers to easily compare not just price, but also the many additional benefits that come with certain electricity plans.  While Roylance noted that the value-adding benefits available from some energy providers (airline miles, gift certificates, renewable energy, convenient payment options) are only in their infancy compared to where they will be a few years from now, these bonus features are still attracting customers to electric companies that might not have the lowest rate in the market.

Over 5,000 Texans shop for a low electric rate on every month, and about half of these Texans are choosing a plan that isn't one of the absolute lowest, because they're opting for a green product, or a product with airline miles, or a bill credit for signing up.  "They’re searching for some other feature that meets their unique needs," Roylance explained, and lets customers quickly identify the features and prices of different plans in a straightforward and simple format, so consumers can click, pick, save, and join the progressive Texans that are benefitting from competitive electricity rates in Texas.

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