Consumers surveyed rate utilities more favorably than U.S. businesses overall

Sept. 18, 2002 — While American consumers hold low opinions of major business and corporate executives these days, they still trust and support their local electric utility, according to the results of a new nationwide survey.

By a 6-1 margin, U.S. heads of households say their electric utilities are more trustworthy than American companies in general, the survey points out. While six in 10 consumers express less trust in America’s business leadership than two years ago, only one in five report less trust in their local electric company. And on a 4-1 basis, these same respondents believe their local utilities are far more accountable than U.S. businesses overall.

Closer to home, three in 10 customers say their local utility is more trustworthy than other energy companies, and one in four express complete trust in their local supplier. Utility employees rate particularly high among consumers for adhering to ethical business practices, earning a 7.4 on a 0 (Poor) to 10 (Excellent) scale. By a 4-1 margin, consumers believe electric co-operatives are more honest than investor-owned utilities, although this margin is closer than a year ago.

These results are part of the national survey series, “Credibility Crisis: Earning Customer Trust,” conducted by RKS Research & Consulting, a nationwide market research and public opinion polling firm.

In-depth telephone interviews were completed during the month of August with 820 heads of households across the U.S. to measure the effects of recent economic and market events on consumer satisfaction, support and trust toward the local electric utility and natural gas distribution company. Results from a separate survey of business customers are also being prepared for release.

The new survey confirms a sense of widespread disillusionment among American consumers. For instance, respondents believe nearly half of U.S. corporations-47 percent-maintain deceptive business practices or questionable ethics. Only five percent of those surveyed give high marks to business executives for their personal ethics or their handling of confidential information for personal financial gain. And trust in business leaders lags at a mediocre 5 on the 0-10 scale.

Overall, half the consumers surveyed believe small, privately held companies are more honest in their business practices than large, publicly held corporations. Telephone companies, Adelphia Communications cable operations, global petroleum producers, and Martha Stewart receive repeat mentions in open-ended requests for examples of less trusted companies, according to the survey.

Among the 46 percent of respondents who hold stock in U.S. companies, nearly three in 10 maintain they were directly and personally affected by dishonest business practices. Within this group, 56 percent report investment losses, and 10 percent say they lost retirement savings.

The fact that one in seven survey respondents has family or friends who work at a utility may explain the strong showing by energy suppliers, according to the RKS analysis. Throughout the survey, consumers consistently rated their local utility significantly higher than other American businesses in overall assessment, accountability, honesty, and adherence to ethical business practices.

“Despite the steady stream of negative news headlines-many involving energy companies and traders-consumers still hold positive attitudes toward their local power supplier,” said David J. Reichman, RKS chairman and chief executive officer. “While utilities did better overall than U.S businesses generally, our analysis indicates that this advantage is still fragile, and that there is still plenty of room for improvement, particularly in improving credibility through effective, ongoing communications.”

Further information is available on the website: www.rksresearch.com.

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