Consumers with Highest Electric Bills are Happiest Utility Customers

 

Takeaway

  • Co-op customers believe current energy prices are high and that their bill reflects that reality. 
  • In comparison with cooperative utility customers, all other utility customers are less satisfied with their electric utilities. 

 

Despite paying the highest monthly electric bills, the latest UT Energy Poll shows cooperative utility customers are the most satisfied among all electrical subscribers.

Cooperative (co-op) utilities are primarily in large rural areas or suburban Southern areas where customers all pitch in to cover costs and have an ownership stake in the utility; the data shows that being a stakeholder, remarkably, appears to reverse the expected relationship between price and satisfaction. For all other types of utilities, as customers pay more they become less satisfied with their electric utility, demonstrating the usual, expected pattern of price sensitivity. For co-op customers, the high monthly average electric bill does not go unnoticed; rather, such customers believe current energy prices are high and that their bill reflects that reality. These politically-moderate customers self-report average knowledge of energy issues and average participation in local and national elections.

In comparison to cooperative utility customers, all other utility customers are less satisfied with their electric utilities. In non-coop customers, as average monthly electricity bills rise, less surprisingly, satisfaction with electric utilities decline. Municipal Utilities (Munis) and Regulated Electric Providers (REPs) have the lowest satisfaction ratings, while Investor Owned Utilities (IOUs) have medium satisfaction ratings.

Municipal utility customers’ discontentment may have risen because they have the smallest home sizes, yet pay more than IOU and REP customers. These customers are more likely to be urban residents and to have Democratic or Liberal political affiliation.

REP customers have low satisfaction with their electrical utility and believe that current energy prices are high. These households are more likely to be in the northeastern region of the U.S. and have medium sized homes. Politically, they are middle-of-the road and self-report medium levels of knowledge about energy issues and participation in elections.

IOU customers pay the lowest average monthly electricity bills and perceive energy prices to be the lowest. Perhaps unsurprisingly, given that fact, they are more satisfied with their electric utility than Municipal or REP customers. The typical IOU household is a large suburban home and the household reports high knowledge of energy issues and high participation in elections and IOU customers are more likely to identify themselves as republicans or conservatives when it comes to politics.

Disclaimer

The views expressed are those of the author and not necessarily The University of Texas at Austin.
 

About The Author

Jacob Suher

Ph.D. Student in Marketing, McCombs School of Business, The University of Texas at Austin

Jacob Suher is a doctoral...

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