Energy Choice Adoption Rises in Northeast

A blog post on discussed the rapid growth of energy choice awareness in the Northeast. New Jersey has seen a slow but steady increase in awareness of retail choice over the past six years, with relatively stable prices over the past year. In contrast, rates have increased by 20 to 100 percent in Massachusetts and Connecticut, with varying increases for different utilities and rate classes. As of the first week in March, customers in Boston could cut their energy supply costs by 25 percent by switching to alternative suppliers. This opportunity has driven many customers in Massachusetts and Connecticut to explore alternative suppliers. also reported last week that energy choice participation fell in Central Pennsylvania during 2014 as default service became competitive with retail supply. Now, suppliers are offering discounts of up to 10 percent for residential customers, and most likely comparable discounts for commercial customers. Retailers have been more flexible in offering contract terms during which they can beat default service prices. This, coupled with an increase in utility prices in the region and decreasing wholesale prices, has driven increased interest in retail power in recent months.

As a general rule, when utility rates increase, customers often seek alternatives, and they are likely to switch if competitive suppliers offer savings versus utility default rates. When utilities offer rates that are comparable to or lower than those offered by retailers, as is the currently case in New Jersey, customers are unlikely to switch. In March, competitive suppliers offered discounts of just 1 percent compared with utility rates. In February, reported that utility rates would remain relatively stable, with increases or decreases of 5 percent or less throughout much of the state.

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