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Customers' Choice Among Retail Energy Suppliers: The Willingness-to-Pay for Service Attributes

Abstract:
We examine small/medium commercial and industrial customers' choices among energy suppliers in conjoint-type experiments. The distribution of customers' willingness to pay is estimated for more than 40 attributes of suppliers, including sign-up bonuses, amount and type of renewables, billing options, bundling with other services, reductions in voltage fluctuations, and charitable contributions. These estimates provide guidance for suppliers in designing service options and to economists in anticipating the services that will be offered in competitive retail energy markets.

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Energy Specializations: Electricity – Local Distribution; Electricity – Markets and Prices ; Electricity – Policy and Regulation

JEL Codes: Q21: Renewable Resources and Conservation: Demand and Supply; Prices, Q40: Energy: General, Q41: Energy: Demand and Supply; Prices, D12: Consumer Economics: Empirical Analysis

Keywords: electricity market, retail, conjoint analysis, customer behavior, electricity prices

DOI: 10.5547/ISSN0195-6574-EJ-Vol21-No4-1

Published in Volume21, Number 4 of the bi-monthly journal of the IAEE's Energy Economics Education Foundation.

 

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