Electricity Restructuring and Value-Added Services: Does Direct Access Make a Difference

This paper presents the results of a series of interviews of non-residential electricity service customers who have chosen to take service from a non-utility provider. Our key findings include:

• The retail energy service market remains immature and is characterized by high search and other transaction costs and significant regulatory uncertainty
• Customers generally believe that the primary benefit from electricity services contracts with non-utility suppliers is in the form of commodity savings, but there is significant interest in certain value-added services, specially, innovative billing, enegy information and energy efficiency
• Interest in purchasing an integrated and comprehensive suite of energy-related services from a single retail energy service provider (RESP) is limited
• Customers are virtually unanimous in their support of the idea of restructuring, despite limited savings on commodity prices in most states, uncertain value from other services, costly procurement and difficulties in making the transition to non-utility providers.