A Power Plant On Every Block? New Survey Shows Growing Consumer Interest in On-site Power.

NORTH SALEM, N.Y.--(BUSINESS WIRE)--Sept. 29, 1999--

High-Income Households Seek More Protection from Power Disruptions,

Less Dependence on Utilities

Amid summer power shortages, continued utility restructuring and consolidation, affluent American households are receptive to the idea of generating their own electricity, according to a major new nationwide survey.

While high-income single family homeowners register satisfaction with their utility service, growing numbers express interest in some kind of back-up power source, the survey points out. These customers want -- and can afford -- increased protection against losses, discomfort and inconvenience. And some of these affluent homeowners feel the need for more control of their power supply, with less dependence on their energy supplier.

Already, one in 10 affluent U.S. households -- 11 percent -- owns some form of emergency backup generator, according to the survey. Owners of these units show interest in acquiring a more advanced generating device. A larger proportion -- 15 percent -- express a high degree of interest in on-site power generation, while another 24 percent remain neutral.

This latest market assessment, an update of a groundbreaking study completed a year ago, was performed by RKS Research & Consulting, a nationwide market research and public opinion polling firm based in North Salem, N.Y.

For this survey, RKS interviewed 810 heads of households across the U.S. High-income status was defined as the top 15 percent income bracket in each of four separate census regions. The interviews took place in May and June of this year, and results are now being reported to study sponsors.

"These findings demonstrate surprisingly measurable interest in a product that is still mainly in the concept stage," said David J. Reichman, RKS president. "The strong signals we received from affluent consumers indicate a large potential market for power generation devices that deliver a higher degree of protection, control, and independence to sophisticated, technology-rich households."

The RKS survey also confirms that no single supplier has a lock in the market for on-site generation. High-income residents are just as willing to consider an equipment manufacturer as much as their utility to sell and service this equipment, and large numbers would turn instead to their local retail outlet.

"This result makes it clear that the market is wide open for all kinds of competitors in the on-site power market," said Reichman. "And we see an edge for the entrant that could offer a one-stop solution -- from selecting, siting and servicing the equipment to being on hand for installation and financing."

The RKS data also confirms that customer interest in on-site electricity increases in direct proportion to power inconveniences. Specifically, consumers showing the highest interest in on-site generation have experienced twice as many outages and significantly more interruptions than other respondents.

Interest is highest in the Eastern U.S., a broad area of unusually severe heat and constrained power supplies this summer.

Higher income households have more sophisticated needs and are willing to pay a premium for solutions, the survey points out. For example, homes in excess of 3,000 square feet, households with multiple computers, and large families express the highest levels of interest in distributed generation. And these customers consider a premium of 17 percent more than their present electric bill a fair price for back-up support.

In addition to this survey of high-income residential customers, RKS has again performed an in-depth study of business customers and their interest in on-site options. The results of this survey will be reported out in September.

RKS' distributed generation market surveys are taking place against the backdrop of growing manufacturer, regulatory, and legislative interest. On August 11, Rep. Jay Inslee (D-Wash.) introduced a bill called the Home Energy Generation Act, a measure calling for standards to encourage the development of home energy technologies.

Earlier this year, the state of California Public Utilities Commission convened hearings for proposed rule-making for distributed power generation.

Now in its 26th year, RKS Research & Consulting designs and delivers both syndicated and customized market research and public opinion polling services to some 90 electric, gas and water utilities, as well as their major associations. The firm operates from headquarters in North Salem, NY, plus field offices in New Jersey, Florida, and California.

RKS is on the Internet at: www.rksresearch.com

Ordering information for the RKS Residential Customer Survey of Distributed Generation can be obtained from RKS at 914/277-6900, ext. 102 or fax: [phone].