By Jesse Berst
Analysts have long predicted that big box retailers – Wal-Mart, Home Depot, etc. – could someday compete as power retailers. Chicago-area consumers will see this idea in action, thanks to a new arrangement between Constellation Energy and Best Buy.
The companies have teamed to allow customers to switch providers while also buying related products such as thermostats or home energy monitors. Constellation claims the programs can save customers up to 18% over ComEd rates or 22% over Ameren rates.
It has been fascinating to watch power retailing develop in areas such as Texas and the United Kingdom. In the early days, we thought it would be all about price. As it turns out, price is important but it is just the table stakes. To become a market leader, you have to establish brand trust. You have to bundle the power with other products or benefits. And you have to make that bundle ultra-easy to find and purchase.
With Best Buy leading the way, can Wal-Mart be far behind?
On a related note, Constellation says interest in shopping for electricity has grown dramatically among Illinois residents since late 2010 when the Illinois Commerce Commission OK’d a new billing system to enable competitive suppliers to offer residents the benefits of competitive market prices. Over 316,000 residents have signed up with new suppliers in the past year, according to the company.
Jesse Berst is the founder and chief analyst of Smart Grid News.com.