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Retail competition in electricity supply—Survey results in North Carolina

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  • McDaniel, Tanga M.
  • Groothuis, Peter A.

Abstract

Residential retail competition in electricity supply was introduced in many countries and some US states as part of electricity industry deregulation. Following problems in the electricity market in California in 2000/2001 many US states, including North Carolina, suspended their deregulation agenda. Recent technological advances have made competition more viable, so we ask if NC should reconsider deregulation and retail competition. The welfare benefits will depend on consumers’ willingness to switch suppliers and the potential for value added innovations. In electricity and industries such as pay-tv and telecommunications consumers are ‘sticky’, remaining with their current supplier even though rivals offer savings. Moreover, some analysts question the likelihood of significant welfare improvements from retail competition. We survey residents in two NC counties focusing on: (i) households’ knowledge of and interest in retail competition, (ii) factors that would encourage them to switch suppliers and (iii) the required savings to encourage switching. About 50–65% of respondents would favor retail competition in NC. Demographic variables and experience switching in other industries affect opinions and the savings required to incent switching. We conclude the estimated rate reduction to encourage competitive switching will be hard to achieve in NC as long as rates remain below the national average.

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  • McDaniel, Tanga M. & Groothuis, Peter A., 2012. "Retail competition in electricity supply—Survey results in North Carolina," Energy Policy, Elsevier, vol. 48(C), pages 315-321.
    • Handle: RePEc:eee:enepol:v:48:y:2012:i:c:p:315-321
    DOI: 10.1016/j.enpol.2012.05.028
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    References listed on IDEAS

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    3. Niamir, Leila & Filatova, Tatiana & Voinov, Alexey & Bressers, Hans, 2018. "Transition to low-carbon economy: Assessing cumulative impacts of individual behavioral changes," Energy Policy, Elsevier, vol. 118(C), pages 325-345.
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    5. Fontana, Magda & Iori, Martina & Nava, Consuelo Rubina, 2019. "Switching behavior in the Italian electricity retail market: Logistic and mixed effect Bayesian estimations of consumer choice," Energy Policy, Elsevier, vol. 129(C), pages 339-351.
    6. O'Shaughnessy, Eric & Heeter, Jenny & Gattaciecca, Julien & Sauer, Jenny & Trumbull, Kelly & Chen, Emily, 2019. "Empowered communities: The rise of community choice aggregation in the United States," Energy Policy, Elsevier, vol. 132(C), pages 1110-1119.
    7. Itaoka, Kenshi & Chapman, Andrew & Farabi-Asl, Hadi, 2022. "Underpinnings of consumer preferences and participation in Japan's liberalized energy market," Utilities Policy, Elsevier, vol. 76(C).
    8. Janez Dolšak & Nevenka Hrovatin & Jelena Zorić, 2020. "Analysing Consumer Preferences, Characteristics, and Behaviour to Identify Energy-Efficient Consumers," Sustainability, MDPI, vol. 12(23), pages 1-19, November.
    9. Haar, Lawrence, 2021. "The competitive disadvantages facing British assetless electricity retailers," Energy Policy, Elsevier, vol. 155(C).
    10. Xiaoping He & David Reiner, 2017. "Why Consumers Switch Energy Suppliers: The Role of Individual Attitudes," The Energy Journal, International Association for Energy Economics, vol. 0(Number 6).
    11. Hussain, Shahid & Seet, Pi-Shen & Ryan, Maria & Iranmanesh, Mohammad & Cripps, Helen & Salam, Abdul, 2022. "Determinants of switching intention in the electricity markets - An integrated structural model approach," Journal of Retailing and Consumer Services, Elsevier, vol. 69(C).
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