AGOURA HILLS, Calif., and CHICAGO-The largest 75 electric utility companies in four regions of the United States are doing a better job this year of quickly restoring power outages affecting residential customers, according to the 2000 J.D. Power and Associates/Navigant Consulting Inc. Electric Utility Residential Customer Satisfaction Study recently released. The average length of the longest power outage was reduced from 17 hours in 1999 to five hours this year.
The study, based on responses from nearly 24,000 residential customers, shows the customer service factor improved nationally by six points to 106 when compared to the 1999 study results. The utility companies included in the study each service more than 250,000 residential customers nationwide.
“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 Jim Gaz, J.D. Power and Associates director of energy services.
Nationwide, 65 percent of residential customers report that they are extremely or very satisfied with their electric utility provider. In addition, four electric utility companies formerly below industry average in customer satisfaction climb above the industry-average benchmark in this year’s study.
“As competition increases and consolidation continues for the electric industry, some companies will be left behind if they don’t improve overall performance and may eventually find themselves the target of a takeover,” Gaz said.
“The ultimate differentiating factors in a competitive retail market are product quality and service,” said Jeffrey Conklin, Navigant Consulting director. “Many utilities have improved this year due largely to enhancements in power delivery and customer service. The investments made in technologies, processes and human resources are paying off,” Conklin said.
Potomac Electric Power Co., serving the District of Columbia and nearby suburban Maryland, ranks highest in customer satisfaction with residential electric service in the Eastern region of the United States. This ranking was driven by strengths in the areas of customer service and company image. Allegheny Power ranks a close second in this segment, followed by PPL Utilities, while National Grid USA and Rochester Gas and Electric tie for fourth and Baltimore Gas & Electric ranks sixth in this region.
LG&E Energy, the parent company of Kentucky Utilities and Louisville Gas and Electric, repeats as the provider ranking highest in customer satisfaction with residential electric service in the Midwestern United States. LG&E Energy performs well in all areas, with particular strengths in company image, price/value and power quality/reliability. Northern States Power ranks second, Wisconsin Public Service third, Alliant Energy and MidAmerican Energy are tied for fourth in this region.
Memphis Light, Gas and Water (MLGW), serving both the city of Memphis and Shelby County in Tennessee, ranks highest in customer satisfaction with residential electric service in the Southern United States. MLGW’s residential customers give it high ratings for company image, price/value and power quality/reliability. South Carolina Electric & Gas ranks second, the City Public Service of San Antonio and Tampa Electric tie for third, while Southern Company ranks fifth and Duke Power is sixth in this region.
Salt River Project (SRP), which serves the Phoenix area, repeats as the provider ranking highest in customer satisfaction with residential electric service in the Western United States. In fact, SRP earns the highest overall customer satisfaction index score (118) nationwide. SRP ranks high in all components of satisfaction, but distinguishes itself in customer service, power quality/reliability and billing/payment. Seattle City Light ranks a close second, followed by Idaho Power ranking third, Sacramento Municipal Utility District fourth, and Avista in fifth place in this region.
“Although customers report more power outages, the average duration is considerably shorter this year,” Gaz added. “More importantly, customers feel they are much better informed about outages. Taken together with improved ratings on customer service representatives and faster call answering times, it’s not surprising that so many utilities were able to improve satisfaction levels.”
The study also found that customers, on average, spend $88 per month for electricity, which is unchanged from 1999. Delaware and South Carolina have the highest monthly average at approximately $112, whereas Minnesota and Utah have the lowest monthly average at approximately $60. Customers in Alabama report the highest number of service outages and/or interruptions per year at eight, followed by Utah and West Virginia at seven. Customers in Rhode Island report the fewest power reliability problems per year at three. Customers in Michigan experienced the longest outages, averaging nearly 13 hours.
If given a choice, 17 percent of residential customers say they would definitely or probably switch power suppliers-with no significant difference in price. However, 39 percent of unhappy customers say they would switch without a price discount. The study also reveals that it may take significant savings, more than 15 percent, to cause the majority of customers to be very or somewhat likely to switch power suppliers.
The 2000 Electric Utility Residential Customer Satisfaction Study is jointly designed and independently financed by J.D. Power and Associates and Navigant Consulting.