With on-line shopping on the increase in U.S. households, a new national survey finds more consumers interested in dealing with their energy suppliers over the Internet.

But only half the customers who deal with energy providers over the Internet are satisfied with the results, and these high-tech households are more critical of their utilities than other consumers, according to the survey. Representing a threat to utility market share -- and an opportunity for competitors -- one in five of these customers say they will shop on-line for a new energy provider, the survey points out.

While residents give their electric suppliers high marks for technical competence, they register negative or no opinions in critical areas of customer focus, such as economic development, flexible service and billing options, and communications, according to the survey. These attributes will be increasingly important in a competitive marketplace, the survey asserts.

Likewise, U.S. households rate their utility representatives as friendly but inflexible on service transactions. The survey data indicate that increased customer orientation, plus strong operational performance, will distinguish one competitor from another in a deregulated environment.

And the same study finds that residential customers in deregulated markets rate their providers more positively for value and operational performance. But in an important message to distribution utilities, these same customers expect that reliability will steadily improve in a more competitive marketplace.

These results are part of the year-end 1999 national residential customer assessment conducted by RKS Research & Consulting, a nationwide market research and public opinion polling firm. RKS interviewed 1,635 heads of households across the U.S. during October and November, 1999. The interviews, completed by telephone, draw on nine distinct census regions across the U.S.

According to the RKS data, six in 10 U.S. households now contain at least one personal computer, and half of the computer owners with Internet access have purchased products or services on line. Among the customers who contacted their utility on line, only 54 percent felt the transaction was handled to their satisfaction. And those same consumers rated their energy supplier lower in such important dimensions as value, reliability and loyalty.

"These low scores add up to lost opportunity for electric utilities, as well as encouragement for competitors," said Charleen Heidt, RKS vice president in charge of the residential survey. "Since the Internet shifts control to the consumer, enabling the customization of product, service, and billing options, energy suppliers need to re-think their current one-dimensional 'push' business model."

According to the RKS survey, one in five U.S. households now say they can choose their electricity supplier, a sharp increase from only 12 percent a year ago. Among those with choice, five percent have actually switched suppliers, more than double the two percent reported a year ago. Residents of the Mid-Atlantic and Pacific Coast states are the most active and vocal about choice, according to the survey.

At the same time, deregulation and choice are having a positive influence on customer perceptions of electric suppliers, the RKS data indicates. Residential customers in choice states view the performance of their utilities more favorably, and say their electric service is a good value. These customers are also more likely to recommend their supplier to others, according to the survey.

But customer expectations of their present utility rise with deregulation, the RKS survey points out. For example, nearly four in 10 residential consumers -- 39 percent -- believe their electric supplier will perform better and be more responsive to their needs. A quarter of those sampled feel they will experience fewer power outages as a result of deregulation.

"This is an important message for incumbent utilities, as well as their competitors," Heidt said. "Residential customers have high hopes for deregulation and choice, and they're becoming more demanding and less forgiving in the area of power delivery."

Some other key findings from the year end RKS survey:

• Nearly a third of residential customers will return to a supplier who delivered a positive experience -- whether or not it is currently in the energy business
• More than one in five -- 22 percent -- say they would pay 10 percent more for "green" energy from renewable sources
• And in a signal to national marketers and aggregators, 12 percent would consider buying their energy through an affinity group, such as an auto club, professional association, church or school.

Through rigorous analysis of the findings, the same national survey predicts that consumers will select their future energy provider on the basis of overall value -- not just price. Survey data confirm that future residential customer behavior will be influenced most by a combination of supplier performance, perceptions of reliability, and actual outage experience, and that these factors will count for more than simple cost savings.

Now in its 26th year, RKS Research & Consulting designs and conducts both syndicated and customized market research and public opinion polling services for some 90 electric, gas, and water utilities, as well as their major associations. The firm operates from headquarters in North Salem, N.Y., plus field offices in New Jersey, Florida, and California. RKS is on the Internet at: www.rksresearch.com

Ordering information on the 1999 RKS National Residential Customer Assessments is available from RKS at 914/277-6900 ext. 102, or fax: 914/277-6988.