Gain a Sustainable Advantage :: Shelton Group

Utility rates are up slightly – will consumer frustration be up big time?

by

Here are some numbers from our latest Energy Pulse™ for you to ponder:

  • 59% of the American population says their utility bills went up last year.
  • 80% of the American population says they’re not using more energy.

So if they’re not using more energy but their bills are going up, whose fault is that?

Their utility’s.

Our nation’s utilities are at the top of the “blame” list for rising prices (for the first time in eight years) and Americans are growing increasingly frustrated, angry and victimized over rising bills they think they can’t do anything about.  This state of mind, of course, threatens to derail the energy efficiency industry: If folks adopt a “why bother” attitude we’re destined to see a decrease in number of EE measures implemented (and we’re actually already seeing that in our data.)

So here’s a little bit of truth: According to the U.S. Energy Information Administration (EIA), utility rates did go up on average across the country 1.3% last year, and they’re predicted to rise 1.9% this year. In fact, the EIA predicts our consumption will increase .8% every year through 2040. But let’s put that in perspective. For last year, a .8% increase in consumption combined with a rate increase of 1.3% is a 2.1% increase. The average American utility bill is about $105 – an increase of $2.20 month. For folks barely scraping by, that’s $26 a year that is desperately needed. For most of us, it’s an imperceptible increase.  So small it would be tough for 59% of us to actually notice that our bills have gone up.

So what gives?

We know that half the American population claims to have done between 1-3 things to make their homes more energy efficient. We also know that if they spent $4,000 on those improvements they expected to cut their bills a whopping 85%. So the perception of bill increases is likely linked to the overwhelming disappointment in not seeing a massive DROP in their bills. No decrease is the same as an increase.

We must help Americans begin to see actual, perceptible decreases in their utility bills in order for them to feel satisfied – and no longer “victimized” by their utility. Those kind of perceptible decreases will come with whole-home approaches – many measures done at once WITH lots of training about behaviors to actually maximize the efficiency. (You’d be shocked how many people actually leave the lights on more often once they screw in the CFLs or set their thermostats to more comfy temperatures once they buy the more efficient HVAC unit.)  One-offs with promises of savings simply won’t work. Utility customers have gotten smarter – and more frustrated – than that.

 

Share Button

Suzanne Shelton

About Suzanne Shelton

Suzanne Shelton is President and CEO of Shelton Group, the nation's leading marketing agency focused exclusively on energy and the environment. Drawing on her extensive knowledge of the industry, Suzanne provides unparalleled strategic insights in her writing, research, and client work. Suzanne is a guest columnist in multiple publications and websites, such as GreenBiz.com, and she speaks at over 20 conferences a year, including ACEEE, AESP, Greenbiz Forum, and Sustainable Brands.

View all posts by Suzanne Shelton →

3 comments

Receive new post updates: Entries (RSS)
Receive follow up comments updates: RSS 2.0

3 thoughts on “Utility rates are up slightly – will consumer frustration be up big time?

  1. Your basic premise of blaming the utility is so typical and way off base. What other basic staple industry has seen only a 1.3% increase in prices in the past year? When you publish this kind of essay that offers no real insight in truth, you are just as guilty as the average (and ignorant) consumer for shifting blame where blame doesn’t belong. Until you figure out the flaw in your illogic, you are not helping anyone or anything by regurgitating the same rhetoric that ignorant and arrogant consumers do. You are supposed to enlighten your readership and all you can publish is another finger-pointing essay… Michael Jackson said it best in one of his songs, “I’m lookin at the man in the mirror…”

    I don’t expect you’ll publish my comments, but if you do, please include my email address. I’d like people to know that there’s hope around the corner… Real solutions with really amazing savings… And a very low price to play… Sing it again, Michael!!

    • Douglas, thank you for your comment, I am happy to publish it. It appears you are quite passionate about what you have to say, but I want you to know we base what we say in this forum on what we learn about consumer attitudes through our quarterly research. For nearly 10 years we have been polling Americans on how they view, among many other things, energy, energy efficiency and their energy providers. This latest post is based on findings from our studies, as well as information from the EIA. We don’t screen participants in our studies for any particular bias, Douglas, we in fact, survey average Americans based on census data, matching exactly percentage-wise, the makeup of the US population. It’s not an exercise in finger pointing when we write our posts, it’s instead meant to inform our readers on what’s going on inside the heads of mainstream Americans, and offer advice based on those perceptions. My guess is that we’ll agree to disagree on this matter, but please know that I appreciate your feedback. And, per your request, your email address is Douglas@CarbonLessEnergy.com.

  2. Given space limitations, point taken. However, as you generally point out consumers opinions and perspectives are better understood by understanding the opinions/trends of the segments.

    This is true of “Utilities”. The US currently has three electric market models (read: utility business models): ISOs (PJM, ISO-NE, NY-ISO, CA-ISO, MISO & SPP), ERCOT, and Power Pools. (see:http://www.ferc.gov/industries/electric/indus-act/rto.asp). The consumer energy bill includies charges for Generation, Transmission, and Distribution. Depending on the electric market, the “Utility” has the ability control one, two or three of these line items. Also, if you parse the data according to the three markets, you get significantly different results on the “average” increase.

    My message is that just as there is no average consumer, there is no average utility and an average conclusion will not lead to the “signal”, just more “noise”.