Although Texas uses more energy than any other state, many company decision-makers in Texas admit they are still relatively uninformed about energy deregulation, according to a recent survey of nearly 500 businesses commissioned by Tractebel Energy Services, Inc., the U.S. retail energy business of Tractebel Electricity & Gas International, a business division of SUEZ (NYSE:SZE).
Based on responses of 476 companies in the deregulated zones of Texas, the survey, which was conducted by an independent research firm, indicated that very few companies see energy as a strategic or "core" initiative, although the cost of energy often represents a considerable percentage of companies' overall operating budgets. More than 80 percent of businesses surveyed do not employ a dedicated energy manager, yet more than 70 percent handle their energy procurement directly with their supplier. In addition, a majority has never purchased energy from anyone other than their local utility.
"The survey results show that many Texas companies could be saving money on their energy costs, but lack the knowledge to make an informed choice in a deregulated market," said J.D. Burrows, vice president of marketing at Tractebel Energy Services. "Overall, large commercial and industrial customers have embraced competition, but even they may not be taking full advantage because of a limited knowledge base."
While electricity is a commodity, more respondents rated good customer service as very important, compared with obtaining the lowest price. An energy provider's size, stability and financial health were also important to respondents.
Market volatility was a continuing concern among respondents, especially considering the high oil and natural gas prices of the last few years. About half of the businesses chose to enter short-term energy contracts, and a large majority (84.6 percent) preferred fixed-price products instead of index-price products that reflect market fluctuations.
Budget certainty -- defined as a company's ability to plan and project future profit margins -- is hindered by this market volatility. Although many businesses were pleased with their current energy provider, about 70 percent of respondents said they were likely to consider a new supplier that could improve their companies' budget certainty.
"What all of this tells us is that if customers knew more about what they are actually purchasing when it comes to energy, it would be to their advantage. Which is why we feel one of our most important jobs in the coming year will be to continue to inform customers about the variety of options they have when it comes to choosing their electricity provider. We think a more informed customer is better for them, for us and the entire industry," said Burrows.
Tractebel Energy Services provides end-user electricity and related energy services and products to Commercial and Industrial (C&I) customers across the key deregulated markets in the U.S. and currently serves more than 6,000 customer accounts representing more than 2,700 MW of electricity. Tractebel Energy Services helps customers control their energy budgets by providing innovative pricing structures that minimize exposure to risks associated with the energy market.
Licensed in 10 states, and actively operating in seven, the company is ranked as the sixth largest and fastest growing retail energy provider in the U.S.(a) Tractebel Energy Services plans to expand to other states in the Northeast and Midwest in 2005. Its parent company, SUEZ, is one of the most established and largest companies in the world, dating back to 1822 with more than 15,000 employees based in North America alone. To learn more about Tractebel Energy Services, customers may visit the company's Web site at www.tractebelenergy.com or call 1-866-999-8374.
For more information about SUEZ, Tractebel Electricity & Gas International, or Tractebel Energy Services visit the companies' Web sites at www.suez.com, www.egi.tractebel.com, or www.tractebelenergy.com.
(a)2004 KEMA Ranking; KEMA is an independent energy consultant
About Tractebel North America, Inc.
Based in Houston, Tractebel Energy Services, Inc., is a wholly owned subsidiary of Tractebel North America Inc. (TNA). TNA is responsible for managing SUEZ's positions within the energy value chain in the U.S., Mexico and Canada, including electricity generation and cogeneration, natural gas and liquefied natural gas (LNG), asset-based trading and origination, and retail energy sales and related services to Commercial and Industrial customers.
TNA owns and/or operates a total of 59 power, cogeneration, steam, and chilled-water facilities, including those in construction or development, representing a capacity of more than 5,717 MW of electricity generation, 12 million pounds per hour of steam, and 147,000 tons per hour of chilled water. TNA's wholly owned subsidiary, Tractebel LNG North America LLC ("TLNGNA"), owns and operates a liquefied natural gas ("LNG") receiving terminal in Everett, Mass., which commenced operations in 1971 and currently serves most of the gas utilities in New England and key power producers, meeting approximately 20% of New England's annual gas demand.
In Mexico, TNA affiliates operate three natural gas distribution companies, located in Guadalajara, Queretaro and Tampico, which serve more than 90,000 customers with clean and reliable energy. TNA affiliates also operate cogeneration plants in Tampico and Monterrey, which produce 280 MW of power. TNA and its affiliates are the only companies in Mexico with the capacity to offer integrated solutions regarding natural gas, electricity and energy-related services.