NORTH SALEM, NY, Jan. 13, 2003 --The nation's largest businesses -- companies with multiple locations and a recognized national brand -- plan to drastically reduce the number of electricity and gas suppliers as they streamline and simplify their business relationships, according to a new survey of headquarters energy decision-makers.
For example, commercial national accounts--such as the nation's major chain stores, grocery, convenience and specialty retailers, restaurants and hotels--intend to deal with a short list of six electricity suppliers, down from the present roster of 88--a projected drop of 93 percent, according to the survey. Likewise, these same large customers expect to reduce their natural gas providers from 44 to five sources--an 88 percent reduction.
North America's largest industrial customers forecast similar trends, with plans to deal with no more than three electric and four gas suppliers--reductions ranging from 65 to 75 percent. As these trends continue, the resulting consolidation of suppliers could affect more than 25 percent of current energy industry revenues from commercial customers--plus an additional 15 percent paid by industrial customers.
These results highlight the sixth major survey of national accounts customers conducted by RKS Research & Consulting, a nationwide market research and public opinion polling firm. Using both on-line and telephone interviews, RKS gathered data from 200 headquarters energy managers responsible for 180,000 separate places of business throughout North America.
The firms represented in this survey account for $5.4 billion in annual electricity expenditures, plus another $2.6 billion a year for natural gas. Subsequent focus groups will involve some of these respondents in exploring the results and key themes in greater detail.
"From these findings, it's clear that these large and demanding national accounts are looking for a long-term relationship with far fewer suppliers," said David J. Reichman, RKS chairman and CEO. "While cost savings remain an important criterion, headquarters energy managers at these major firms now tell us that a responsive single point of contact, an assured supply of energy, and a strong financial profile will be the key factors in winning or losing their business in the post-Enron marketplace."
Clear majorities among these large energy users--80 percent--can now choose their electric and gas suppliers, according to the survey. Already, more than one in five have switched 75 percent or more of their dispersed locations to new energy providers. At the same time, respondents register low levels of satisfaction with both electricity and gas deregulation, and express reservations about the process and ultimate benefits of deregulating energy markets.
The latest RKS survey also finds national accounts increasingly active in energy efficiency. For instance, half these major businesses report increased spending on efficiency programs over the past two years, with 2002 expenditures alone estimated at some $200 million. And majorities within key segments--restaurants, food stores and specialty lifestyle and fashion retailers--are stepping up their 2003 spending on lighting, space conditioning and energy management systems, according to the survey.
In addition to the efficiency and purchase intention information, the full RKS national accounts survey report contains chapters on supplier best practices from the energy managers' perspective; customer rankings of national energy suppliers; account manager criteria; deregulation, choice and switching, and billing and service issues. Supplementary information will be available on completion of the focus groups with participating energy managers.
Now in its 29th year of business, RKS Research & Consulting designs and conducts both syndicated an customized market research and public opinion polling for energy and natural resources clients, including their major associations. RKS operates from headquarters in North Salem, NY, plus field offices in New Jersey, Florida, and California. Further information can be found at: www.rksresearch.com.