According to the latest American Customer Satisfaction Index (ACSI), satisfaction with energy utilities improved by 1% from a year ago, largely due to lower prices, particularly for natural gas. Contributing to the improvement was milder winter weather in many parts of the country and an easing of gas prices. With prices dropping and less gas needed for heating, utilities that offer gas service only or in combination with electric service gained the most in customer satisfaction scores.
The survey of customers is conducted by the University of Michigan’s Ross School of Business along with the American Society for Quality and consulting firm the CFI Group. Last year’s survey revealed a decline in customer satisfaction with utilities of 1%.
“Satisfaction-wise, it’s something of a mixed bag [for utilities],” Forrest Morgeson, a University of Michigan research scientist, told Power Market Today. “Obviously, it hasn’t been particularly strong, and some of that goes to pure price reasons. In most industries what we tend to see is that quality of service is the predominant determinant or driver of customer satisfaction with price playing a lesser role. For something like utilities — and this goes as well for gasoline, for instance — we tend to see price as a more powerful or at least an equal player with quality in determining satisfaction. The price jolts that we’ve seen over the last few years have had a pretty detrimental effect on the satisfaction of many of the companies within the [utility] industry. That’s sort of the general overview we see going on.”
The 10 top-rated companies from highest to lowest are Southern Company, PPL Corp., Sempra Energy, Duke Energy Corp., Allegheny Energy Inc., Progress Energy Inc., FirstEnergy Corp., KeySpan Energy Corp., CenterPoint Energy Inc. and Edison International.
The 10 lowest-rated companies from the bottom up are Ameren Corp., TXU Corp., Reliant Energy Inc., Exelon Corp., Northeast Utilities, Consolidated Edison Inc., Pepco Holdings Inc., DTE Energy Co., Energy East Corp. and Xcel Energy Inc.
Morgeson said he and his fellow researchers have yet to see satisfaction or dissatisfaction with deregulation reflected in utility customer satisfaction scores. He said the expectation is that customer satisfaction scores will improve with the expansion of customer choice within the industry.
“We haven’t seen that specifically,” he said. “This is something that we’re anticipating seeing an effect from. The bottom line is in many or in most industries where you have some kind of monopoly power for these companies, they simply need to care about customer satisfaction less, so you see lower satisfaction in industries where there is monopoly power.
“Deregulation could very well, once it has expanded, provide that boost to customer satisfaction once things get more competitive. At this point we haven’t looked for or for that matter seen anything that leads us to believe that that has yet happened.”
On the other hand, though, deregulation with the expiration of price caps can have the opposite effect, leading to customer outrage at substantially higher prices, as has been seen in Illinois.
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