Energy Suppliers Competing in the Mailstream
Do you ever think about where your electricity comes from? You flick a switch, and voilà, let there be light. But many consumers now have to ponder that question, thanks to some mailings sent out recently by energy suppliers. They're all taking advantage of the maturing of a competitive marketplace in several states, with more of an appeal to one's wallet than anything else.
In Connecticut, for several years Energy Plus has been leveraging its relationships with other companies (like hotels and airlines) to attract new customers. For example, in August, it mailed an offer to Marriott Rewards members. While the initial reward of 10,000 points is the primary benefit of switching to the utility, another affinity exclusive incentive is earning two additional points for each dollar spent on the supply portion of one's bill.
There's isn't much talk about price, however. On the back of the letter, an answer to a FAQ cautions that although the current rate is about 10 percent below the local utility, "your rate can vary each month based on the market rate" (to order, go to our Who's Mailing What! Archive, and use Archive code #807-716417-1008B).
Pennsylvania's rate caps on utilities fully expire at the end of this year, leading some companies to compare themselves with PPL, one of the commonwealth's dominant electric companies. Direct Energy follows up a previous effort by reminding a consumer that they're "guaranteed 12% off" PPL's Price to Compare rate until December 2010. Again, very little copy is devoted to the terms and conditions of the offer; the mousetype merits only a paragraph at the bottom of the one-page letter (Archive code #807-713491-1008).
Constellation Energy targeted New Jersey residents for the first time after years of working only with businesses, and also centers its pitch on price. "Welcome Lower Electricity Rates to the Neighborhood" states the #10's teaser. The company's electricity price is fixed "up to 12% lower than your utility's current winter tariff rate," the letter reads. Yet again, therein lies the rub, further explained in the copious mouseprint on the back of the page: Variable prices may be higher in Summer, when rates are higher because of increased usage and demand.
The premium is a Target gift card, with a value of up to $150 depending on the choice of the two plans offered. To further assist in the buying decision, the reverse side of the order form includes information about the company's energy sources, conservation practices and air emissions. But judging by the figures and chart shown, this disclosure is very unlikely to please green-conscious prospects (Archive code #807-699123-1008).