Newspaper article Pittsburgh Post-Gazette (Pittsburgh, PA)

Tyranny of (Energy) Choice? as Customers Shop for Suppliers, Rewards Programs Proliferate

Newspaper article Pittsburgh Post-Gazette (Pittsburgh, PA)

Tyranny of (Energy) Choice? as Customers Shop for Suppliers, Rewards Programs Proliferate

Article excerpt

When Pennsylvania's electric market opened up more than a decade ago, there was little to entice the first customers beyond price.

Today, paying your monthly bills on time could earn you free nights in a Marriott, free travel by Amtrak or Southwest Airlines, gift cards to Sears or Speedway, or simply cash back. Or maybe you would rather that cash go directly into your college savings account?

With the prevalence of major rewards programs offered in recent years by energy suppliers in Pennsylvania, customers are witnessing the "natural evolution of the marketplace," said Ritchie Hudson, state chairman of the Retail Energy Supply Association.

"Now that we've seen the tremendous growth in number of customers participating in the competitive market in the last few years, I believe these are a bit more front and center," said Mr. Hudson, whose group represents electric and natural gas suppliers operating in 15 states and the District of Columbia that have deregulated energy retail markets. "Suppliers have tried to differentiate themselves by different value drivers."

NRG Energy, a New Jersey-based energy behemoth that owns a family of retail supply companies, has "deep experience" launching a variety of plans that offer rewards, said Heather Farber, managing director of NRG Retail East. One of its energy supply companies, Energy Plus, began serving Pennsylvania in 2010 and offers hotel, travel, retail and education perks based on a consumer actions from signing up for a specific plan to remaining a loyal customer.

"Energy competition has fostered innovation that provides consumers additional value and solutions, bringing them options they cannot get from the utilities," Ms. Farber said. "Consumers have more choices than ever.

"We believe our rewards partners value having an additional way to connect with their consumers through a need everyone has: energy," Plus, she added, "We reward people for something [our customers] are already doing: using energy."

However, for smaller suppliers, it's often not practical to provide rewards on the scale of credit cards and retail outlets, Mr. Hudson said. …

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