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

08 March 2000
By Dr. Kenneth Train with AAG Associates Andrew Goett and Kathleen Hudson

In this article the authors 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 over forty 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.

This article was published in The Energy Journal, Vol. 21, No. 4, pp. 1-28, 2000, and was named "Best Paper" by the Journal at a banquet held at the International Association of Energy Economists' annual conference in Vancouver, Canada on 8 October 2002.