Retail competition in electricity supply—Survey results in North Carolina

Tanga McDaniel and Peter Groothuis

Energy Policy, 2012, vol. 48, issue C, 315-321

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.

Keywords: Electricity supply; Retail competition; Switching (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (13)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:enepol:v:48:y:2012:i:c:p:315-321

DOI: 10.1016/j.enpol.2012.05.028

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