If the shopping credit is high enough, retail marketers can come in and hope to compete on price as well as with value-added products. It may be argued that California and Pennsylvania are not comparable, because the shopping credit in Pennsylvania is different for each utility service area. But by examining the Pennsylvania data more closely, the point is made even more strongly that marketing activity, as measured by customer switching, is correlated with the level of the default service price. Both consumer demand and retail supply must be strong to make a competitive market. It costs a lot to win a customer.
Consumers are unfamiliar with decisions about electricity and market inertia is strong.
This is another reason why mass marketing to residential customers has been curtailed or eliminated by some suppliers. But there are opportunities to overcome this hurdle by educating and informing consumers. Consumer education, backed by the information on which to base decisions, will encourage market participation, reduce customer acquisition costs and boost green power choice. Every state that restructures has ordered a consumer education plan. Education messages should encourage switching and let people know that electricity choices affect the environment.