Retail Electric Providers – J.D. Power and Associates Retail Supplier Satisfaction Survey
J.D. Power and Associates recently released a survey showing that customers are more satisfied with Retail Electric Providers than with Local Electric Utilities when it comes to paying for electricity (Duh).
The J.D. Power survey covered Maryland, Connecticut, Illinois, Massachusetts, New York, Pennsylvania, and Ohio. Since we currently overlap with New York and Illinois, we wanted to compare the J.D. Power results with Power2Switch user reviews and state issued complaint statistics.
For the state of New York, Ambit Energy ranked highest on the customer satisfaction index, with a score of 642/1000. Following Ambit, Energetix ranked second, with 630/1000. The rest were well below the state average in satisfaction.
Energetix is fairly straightforward, green energy company that provides service to RG&E and NYSEG territories. We currently don’t have any Energetix reviews on our supplier review pages, but with an average of 1.33 complaints over the past 6 months, they strike me as a small, reputable company.
Ambit is far more interesting. They are a 6 year old; Dallas, TX based company that has reached over 1 million customers. The interesting part is their business model. Ambit is a direct-selling energy supplier; meaning that anyone can sign up as a “consultant” and receive residual income as their friends/family/ neighbors switch to Ambit through them. You can learn more about it here.
Now, direct selling when it’s done right, isn’t all that bad. In fact, in generated almost $30 Billion in 2011. However, there are fine lines between direct selling, multi-level marketing, and a pyramid scheme. The last is where compensation comes from solely recruiting more sellers. I can go into it later.
Keeping in mind that Ambit markets itself by paying customers to sign up additional customers, it makes sense that there are above than average complaints. In New York, over the past 6 months, Ambit averaged 8.83 complaints per month, well above average.
The main takeaway for New York is that Ambit may beat other providers on price, but Ambit is a direct selling energy provider, and as far as direct selling providers go, they are pretty good, but keep an eye out for companies that have similar models.
In Illinois, Energy Plus is the leading supplier, with a J.D. Power ranking of 633. It’s followed by First Energy Solutions, which tapped in at 611.
First Energy Solutions has a good reputation, well below average complaints, and the reviews by our customers who actively switched have enjoyed saving money with FES. There were two main complaints on our site, both revolving around municipal aggregation switches.
J.D. Power ranked Energy Plus as the highest satisfaction for savings by an energy provider. Quite honestly; we strongly disagree, and so do most of our customers. Here are some quotes from our supplier page:
“I was enticed to start service with a low rate (under 6 cents per kWh) and within 3-4 billing cycles, the rate increased to more than 9 cents per kWh.”
“I learned the “Plus” in Energy Plus stands for a plus sized electric bill”
Here’s why people are upset with Energy Plus- On their website, they offer:
“Hotel/ Rail Points”
Which all conveniently entice consumers to switch to their low initial price. Once they’re on, the rates seem to shoot up rather quickly, so from the onset, it sounds like a great idea to gain points and save on energy, but, as with all good deals, the devil is in the details.
The main takeaways:
1) Be cautious of multilevel marketing energy companies
2) If it sounds like too good of a deal- it probably is
3) Satisfaction reviews don’t necessarily take all parts into consideration, and it can end up shorting the customer.