Competitive energy suppliers lure customers with perks

Sometimes, it pays to be energy inefficient.

Competitive energy suppliers in Pennsylvania are wooing customers by offering loyalty rewards, in addition to electricity and natural gas. Consumers can earn travel perks, restaurant gift cards, gasoline discounts and even home warranty discounts.

One company rewards customers based on the number of kilowatt hours or therms used.

“People don’t always go into a marketplace based solely on price,” said Pamela Witmer, a commissioner with Pennsylvania’s Public Utility Commission. “The [competitive supplier] community is creative — much more than utilities.”

Pennsylvania’s competitive energy marketplace is just that — competitive — more than 360 suppliers vying for customers throughout the state. In the Pittsburgh market, more than 60 companies stand ready to serve.

Most Pennsylvanians have opted to stick with their default utility. Only 38 percent of customers have joined the competitive electricity marketplace. But companies are hoping to entice more to try it by offering rewards programs and referral programs.

In the Pittsburgh market alone, more than a dozen companies offer some type of value-added promotion to electric generation and natural gas services.

Ambit Energy, based in Dallas, gives eligible customers travel points based on energy use. Those points can be redeemed for spa and golf getaways, airline gift cards, trips to the Bahamas and cruise tickets.

Bounce Energy, a subsidiary of Houston-based Direct Energy, gives customers a $25 gift card after six billing cycles and a $50 gift card after 12 billing cycles. Those can be spent at travel companies, grocery stores, retail outlets, electronics stores and restaurants.

“It differentiates us as a company, not only in among the retail electricity suppliers, but particularly among the default suppliers,” said Bounce Energy spokeswoman Jessica Michan. “If they want more bang for their buck, they’re going got go with a retail electricity supplier that is conscious of what they need and their wants and desires.”

Bounce Energy, which was acquired by Direct Energy in August 2013, started offering its rewards program in 2008. About 85 percent of Bounce customers in its three-state service area — Pennsylvania, Texas and New York — use the program.

“There’s definitely room for more customers to be a part of it,” Ms. Michan said.

Direct Energy, which also provides heating, ventilation and air conditioning services throughout the nation, offers its energy customers a free trial for its HVAC maintenance program as a perk.

Cable giant Comcast is offering a $25 rebate for customers who switch electricity suppliers to Energy Rewards, a subsidiary of Newark, New Jersey-based NRG Energy Inc., as well as free movie tickets through Fandango, temporary access to cable premium channels and other discounts as part of a pilot program in the Pittsburgh market.

Perks offered most frequently by companies are referral rewards programs, which give existing customers money for recruiting friends. It is an effective way to market brands to potential clients and reward loyalty among existing customers, said Mark Berger of Orangeburg, N.Y.-based Respond Power.

The company gives $25 for referrals to both the new and referring customer, and $50 to both if the new customer adds electricity and natural gas service.

“The best source of your new business is your current business,” Mr. Berger said. “Energy is one of these things most people don’t talk about. You don’t see your friend at the store purchasing a different brand of energy than what you use. It’s not like, ‘Oh. you use Tide?’”

Some companies offer customers significant price discounts on the electric generation portion of their electricity bill if they recruit enough new customers. Others reward customers by discounting energy use during non-peak hours, while some offer smart thermostats to help lower energy costs.

Ritchie Hudson, the state chair of the Retail Energy Supply Association, called the value-added programs “one of the most overlooked benefits” of Pennsylvania’s decision to deregulate the energy marketplace in 1996.

“These types of benefits,” Mr. Hudson said, “were the very reason Pennsylvania chose to move to a competitive market in the first place.”

Michael Sanserino:, 412-263-1969 and Twitter @msanserino.

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