The July natural gas wholesale contract fell to a four-week low Friday as moderating weather and increasing output from U.S. nuclear power plants continued to weigh on the demand outlook for our favorite commodity. The July wholesale contract settled down 8.7 cents, or 2%, at $4.325 a million British thermal units on the New York Mercantile Exchange, the lowest ending price since May 20. The wholesale contract has fallen 9.1% this past week and the primary reason for the downward move is strictly fundamental as the weather reports for the 6 to 15 day time period continue to become mild and trend toward average temperatures for this time of year.
As start this Monday, we go to our favorite place in the deregulation arena which is Pennsylvania for the quote of the week and it’s only Monday. One customer was quoted over the weekend on an energy blog indicating that he was one of 31,000 residential electric supply customers that Duquesne Light Co. lost over the past five months. He still pays the Western Pennsylvania utility to transmit power to his home, but since December, this resident has been buying electricity from an alternative supplier to the utility and saving roughly 10 percent compared with Duquesne Light's rate. He was quoted that "utilities don't have any incentive to find the lowest cost" power for their customers, he said. "That's why I felt more comfortable signing with an alternate supplier." I think that is a great quote for deregulated suppliers and the Pennsylvania Public Utility Commission Chairman, Robert Powelson wishes more people would drop their local electric utility's standard default service and pick one of the lower-cost competitors that are increasing in number statewide. The five-member PUC is looking at ways to make Pennsylvania's retail market for power more competitive including eliminating, or changing, the utilities' default service that most households use now.
In the Georgia retail natural gas market about 15% of customers switched suppliers over the last year, and over the next 12 months another 15% will be in play, according to a study done by J.D. Power and Associates 2011 Georgia Retail Gas Provider Satisfaction Study which was published last week. In the 1990s Georgia was a leader among states in the push to open retail gas markets to competition which many folks in the deregulation business can remember and the state's gas utility market was deregulated and opened to competition in 1998. The early days of competition were marked by customer confusion to say the least with some suppliers not being able to bill for 9 months, websites put into circulation on how to switch to alternative suppliers without paying, etc. Now about 1.5 million Georgia households are served by retail providers, according to government figures. The study also looked at customer satisfaction with gas suppliers on price, billing and payment, communications, and customer service. Not surprisingly, less satisfied customers said they are more likely to switch providers. "Although Georgia has a mature retail gas market, the fact that nearly one-third of customers are switching providers or contemplating switching, indicates ample opportunity for improving customer satisfaction," said Chris Oberle, senior director of the energy practice at J.D. Power. "There is a clear connection between high levels of satisfaction and increased customer loyalty, both of which are essential for any Georgia gas retailer that wants to retain and grow its customer base." The study looked at customer satisfaction with gas suppliers on price, billing and payment, communications, and customer service. Not surprisingly, less satisfied customers said they are more likely to switch providers.
Customers are particularly satisfied with customer service, billing and payment factors and are least satisfied with the communications factor. Billing and payment satisfaction was highest among customers who pay their bills through a recurring credit card payment, compared with customers who use other payment methods, including payment through the retailer website, by automatic deduction from a bank account, through their bank's website or by mail. Communications satisfaction was highest among customers who said they received between four and nine communications from their gas retailer during the past three months, compared with customers who received fewer than four or more than nine communications.