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What Texas Consumers Are Telling Us About Churn, Default Risk and Rate Confusion
ElectricityPlans.com recently completed its second annual Texas Electricity Consumer Confidence Survey. The findings reveal growing concern about high electricity bills, continued grid anxiety and frustration with Texas electricity shopping.
Electricity Bills are Increasing and Consumers Feel the Strain
Nearly half of Texas electricity bill-payers (47.4%) saw their monthly bills rise over the past year. But more importantly, it’s causing a strain as prices for everyday goods also increase and wages stay flat.
More than one in four surveyed (27.7%) cut back on other expenses to afford their electricity bill. Another quarter (24.4%) set their thermostat to an uncomfortable temperature to lower expenses. Others delayed their payments (16.3%) or received a late notice or disconnection warning (14.3%). And nearly 8% reported being disconnected.
The impact of higher bills varies by income level, with those $35-$75K income experiencing the highest level of disconnection for non-payment (DNP).
Implications for REPs:
- Proactively reach out to customers who have consistently paid in the past but are suddenly slow-paying. Recognizing a time of strain and addressing it with solutions builds loyalty.
- Offer blend/extend deals to consistent payers who are on high rates. This avoids a potential high bill that triggers shopping.
- Monitor and model customer payment behavior and get ahead disconnection risks before summer moratoriums.
Grid Anxiety and Storm Experience Drive Outage Preparation
Five years after Winter Storm Uri and two years after Hurricane Beryl, grid reliability remains top of mind. A majority (57.2%) said they are “concerned” or “extremely concerned” about the grid’s ability to handle this summer’s demand.
Texans are prepared for outages, with 63.1% taking some preparedness steps in the past 12 months, including stocking supplies (38.6%), buying a portable generator (22.2%), or investing in a battery backup system (15.4%).
Houston residents were notably more prepared than Dallas residents (70.4% vs. 56.3%), a gap that reflects the region’s direct experience with hurricane-driven outages.
Implications for REPs:
- The perfect storm is coming for VPP programs. Battery back-up appeals to homeowners concerned with grid stability. At the same time, the REP gets to arbitrage battery power onto the grid, generating new income and helping support the grid.
- Educate consumers with peace of mind messaging to counteract public concerns about the grid.
Confusion About Electricity Rates Persists
While 52% of Texans chose their current provider based on the lowest rate, many don’t fully understand what they’re comparing.
Thirty percent (30%) don’t know that advertised rates differ from effective rate due to bill credits, tiered rates, based charges or other fees and credits. Twenty-eight percent (28%) don’t know whether their plan includes a minimum usage fee or base charge and 24% said the shopping process felt too complicated to compare plans fairly.
Implications for REPs:
- While bill credit plans give you that low advertised rate to acquire customers, your retention and customer experience team needs tools to handle the eventual first-bill complaints.
- Satisfaction guarantees and proactive outreach reduce first-bill churn and complaints before they escalate. That extra touch can reassure consumers you’re on their side.
Conclusion
Consumers are dealing with bill stress, grid distrust, and a confusing shopping experience. REPs that treat these as operational priorities, not just marketing challenges, will be better positioned to grow and retain customers.
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AUTHOR BIO
Rebecca Bridges is chief marketing officer for Electricity Plans, an electricity shopping site that helps Texans avoid expensive electricity mistakes by showing what plans really cost, before they enroll.
