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Electric Utility Customer Satisfaction on the Rise

Electric Utility Customer Satisfaction on the Rise

Despite the tense situation in the power industry and the numerous power alerts so far this summer, a new study by J.D. Power and Associates and Navigant Consulting found that electric utility customer satisfaction actually has improved this year and the average length of the longest power outage declined. Nationwide about 65% of residential customers reported that they are extremely or very satisfied with their electric utility provider.

The four regional leaders in customer satisfaction were Potomac Electric Power in the East; LG&E Energy, parent of Louisville Gas and Electric and Kentucky Utilities in the Midwest; Memphis Gas, Light and Water in the South and the Salt River Project in the West. Salt River Project, which serves the Phoenix area, posted the highest customer satisfaction ranking in the nation with a score of 118. It ranked high in all categories but distinguished itself in customer service, power reliability/quality and billing/payment.

One of the main conclusions of the 2000 Electric Utility Residential Customer Satisfaction Study, which was based on responses from 24,000 residential customers, was that the largest 75 electric utilities in four regions of the U.S. are doing a better job this year of quickly restoring power when outages affect residential customers. The average length of the longest power outage was reduced to five hours from 17 last year.

"Although customers report more power outages, the average duration is considerably shorter this year," said Jim Gaz, director of energy services at J.D. Power and Associates. "More importantly, customers feel they are much better informed about outages. Taken together with improved ratings on customer service representatives and faster caller answering times, it's not surprising that so many utilities were able to improve satisfaction levels."

The study also found that customer needs are changing and reliability, power quality and billing/payment are issues that have grown in importance for customers.

"Company image and price/value are still dominant factors for the electric industry, but power quality and reliability, billing/payment and customer service have more of an impact with this year's respondents, collectively representing more than 82 million households," said Gaz.

Power prices nationwide remained flat at $88/month on average. Delaware and South Carolina have the highest bills with customers paying $112/month on average, whereas Minnesota and Utah have the lowest monthly averages at about $60. Customers in Alabama reported the most outages per year at eight, followed by Utah and West Virginia with seven. Customers in Rhode Island reported the fewest outages with three per year. And customers in Michigan reported the longest outages, averaging nearly 13 hours.

If given a choice, 17% of the residential customers said they would definitely or probably switch suppliers - with no significant difference in price. However, 39% of the unhappy customers said they would switch without a lower price offering. The study also found that it might take a 15% cut in prices to encourage the majority of customers to be very or somewhat likely to switch suppliers.

Additional details about the study are available at http://csi.navigantconsulting.com

Rocco Canonica

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