Electric utility companies across the U.S. are getting much higher customer satisfaction marks from midsize businesses in 2002 as compared to last year, according to the results of a new J.D. Power and Associates survey released last Tuesday. Power quality and reliability have combined to become the most important factor comprising overall customer satisfaction, the survey reveals.

J.D. Power interviewed representatives from more than 7,800 midsize businesses throughout the U.S., including manufacturers, retailers, business and consumer services firms and health care providers. Midsize businesses are defined as those that normally spend $1,500 to $25,000 per month on electricity. The study shows that midsize businesses are now spending an average of $5,056 per month on electricity — up 5% over 2001.

The study’s nationwide customer satisfaction index has risen impressively — from 92 points in 2001 to 100 in 2002, J.D. Power noted. Nearly every utility rates higher, with 35 of 41 utilities included in the study significantly improving their performance by at least four index points. While only seven utilities had an overall customer satisfaction index of 100 or more in 2001, 22 utilities achieved a score of 100 or better this year. A score of 100 represents industry average.

“With several utilities moving way out in front of the pack, the other utilities need to pay more attention to satisfying their customers than ever before,” said Alan F. Destribats, executive director of the utility practice at J.D. Power.

Combined, power quality and reliability is now the most important factor comprising overall customer satisfaction. Company image also is an important component, but slides from first to second in impact. The other key components of overall satisfaction are price and value, billing and payment, and customer service.

“Utility management attention and investment in power delivery are paying off,” said Destribats. “Midsize business customers reported the fewest number of interruptions this year.”

The study shows that performance in power quality and reliability has improved from an average of 5.3 interruptions per customer per year in 2000 and 2001 to 4.7 interruptions in 2002.

Retail sales of electricity continue to struggle. According to midsize business customers eligible to choose a new electricity supplier, less than 3% currently have an alternative supplier, while 9% had switched in 2001 and 5% in 2000.

The 2002 study also focuses on the interest of midsize business customers in energy and communication products and services. Customers were surveyed about their interest in various products and services and were asked to rate how well they think their electric utility would perform as a provider of these services.

“Our study shows that the higher the overall level of satisfaction with electricity service, the more likely midsize businesses are to view their utility as a competent provider of other products and services,” said Destribats.

The top 10 utilities rated the highest as potential providers of these products and services are: Alliant Energy, Northeast Utilities, Southern Co., the Los Angeles Department of Water and Power (LADWP), Cinergy, LG&E Energy, Progress Energy, Puget Sound Energy, Duke Power and Baltimore Gas and Electric (BG&E).

The survey also breaks out by region the top utility performers in terms of customer satisfaction among midsize businesses.

The top-ranked electric utility in the western part of the country is LADWP, jumping 12 index points from 2001. “I’m very pleased that the LADWP is being honored with this important award. We believe it demonstrates the Department’s dedication to the energy needs of businesses in Los Angeles,” said Los Angeles Mayor James K. Hahn. “This should send a clear signal to business owners across the nation that if they are planning to expand or to relocate to a more business friendly environment, there isn’t a better place to operate a business than in the city of Los Angeles,” Hahn added.

The utilities in the western region showing the most improvement are San Diego Gas and Electric, Pacific Gas & Electric, Puget Sound Energy and Southern California Edison. The California utilities have rebounded significantly from the power crisis of 2000-2001, J.D. Power said.

Moving over to the Midwest, for the third year in a row, LG&E Energy ranks highest in overall customer satisfaction with midsize business electric service in the heartland, earning the highest customer satisfaction index score among all utilities included in the study. Other utilities in the Midwest with the greatest improvement since 2001 include Exelon-ComEd, Cinergy, Ameren and Xcel-NSP.

Turning to the South, Southern ranks highest in overall customer satisfaction for midsize business electric service in the southern part of the country for the third straight year. The most improved utilities in the South are TXU Electric and Gas, Duke Power, Dominion Virginia Power, Progress Energy, Florida Power & Light and Reliant Energy HL&P.

In the East, BG&E ranks highest in overall customer satisfaction with midsize businesses. BG&E improved an impressive 12 points over 2001 to overtake two-time midsize business customer study awardee PPL Electric Utilities. Included among East Coast utilities showing the most improvement over 2001 are Con Edison, Long Island Power Authority, Northeast Utilities and Allegheny Power.

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