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| [April 17, 2012] |
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Record-High Customer Satisfaction for Energy Utilities Follows Milder Winter
ANN ARBOR, Mich. --(Business Wire)--
Six consecutive years of customer satisfaction improvement for electric
and natural gas service providers make 2012 a record breaker for the
energy utility sector, according to a report released today by the
American Customer Satisfaction Index (ACSI). Energy utilities jump 2.7%
to an ACSI score of 76.7 on a scale of 0 to 100, the highest level seen
since inaugural measurement in 1994.
"For energy utilities, 2012 marks the largest year-on-year customer
satisfaction gain in a decade," says Claes Fornell, ACSI founder and
author of The Satisfied Customer: Winners and Losers in the Battle
for Buyer Preference. "The growing supply of natural gas has lowered
prices, while a mild winter throughout much of the country has reduced
energy use. The bottom line for many consumers is a lower energy bill
and the benefit to utilities is greater customer satisfaction overall."
The ACSI report covers customer satisfaction with three categories of
energy utilities (cooperative, investor-owned and municipal), along with
two health care service industries (hospitals and ambulatory care).
Investor-Owned Utilities: Atmos, Sempra and CenterPoint Post Leading
Scores
As residential customer satisfaction with energy utilities reaches its
highest level in nearly two decades, two investor-owned companies vie
for first place with ACSI scores of 83: natural gas supplier Atmos
Energy and gas-and-electric supplier Sempra Energy (News - Alert). Another natural gas
provider, CenterPoint Energy, follows closely with a score of 82. This
year, all three leaders edge up 2% and reach their individual all-time
highs.
For the energy utility sector at large, natural gas remains a strong
contributor to improved customer satisfaction. Natural gas service is up
1% to an ACSI average of 81 after four years of steady improvement,
whereas electric service is flat at 75.
"Typically, storms do not cause outages for natural gas customers,"
notes Fornell. "Lower prices for most households-coupled with better
service reliability-make natural gas a superior energy source in the
eyes of many customers."
In the investor-owned category, several companies earn above-average
scores of 80 to 81. Fair weather and improved reliability prove a
winning combination for Southern Company and NiSource, as the two
utilities are deadlocked at 81 following solid gains of 5% and 7%,
respectively. Meanwhile, PPL (+1%), NextEra Energy (+3%) and Dominion
Resources (+4%) enter a three-way tie at 80.
Customer satisfaction surges for both American Electric Power and
Ameren-up 10% to 79 and 78, respectively. The largest gain, however,
goes to Pepco Holdings, whoe ACSI score rebounds 28% to 69-welcome news
considering the utility's steep customer satisfaction loss just one year
ago. In 2011, Pepco bottomed out at 54-the worst score among over 200
companies in the Index.
"A year ago, it was apparent that frequent and prolonged outages had
taken a sharp toll on customer satisfaction for Pepco Holdings," says
Fornell. "The utility's focused efforts to improve its power grids,
bolster reliability, and speed up power restoration-including a quick
response to outages caused by 2011's Hurricane Irene-have gone a long
way toward repairing the utility's customer relationships."
The opposite occurs for Northeast Utilities this year, as the company
duplicates Pepco's precipitous decline by plummeting 21% to 59 and the
bottom of the category. Severe weather, stretching from Hurricane Irene
in August to June tornadoes and a late-October snowstorm, results in a
customer satisfaction storm for Northeast. While Northeast Utilities may
rebound as quickly as Pepco does now, higher customer satisfaction
instead might be years in the making, as it was for Ameren following its
dramatic drop in 2007.
Municipal Utilities: Salt River Stays Strong; LIPA Slumps to Last
Place
Overall, municipal utilities are doing a better job of satisfying
customers in 2012. The category shows an ACSI increase of 4.1% to 76,
which places it in a tie with investor-owned utilities. Salt River
Project (SRP) leads the category for a second year with a score of 81
(-1%), while CPS Energy earns a close second place at 79 (unchanged).
Considerably lower, Long Island Power Authority (LIPA) sees customer
satisfaction sink 11% to 58-now the worst score among all utilities. In
the wake of Hurricane Irene, some LIPA customers endured outages in
excess of one week, leaving the utility in a precarious customer
satisfaction position. The nation's largest municipal utility, Los
Angeles Department of Water & Power (LADWP), performs better at 69
(+5%), but its ACSI gap to the category's leaders is nevertheless wide
(10 to 12 points).
Cooperative Utilities: Category Turns in Top Overall Score
Smaller rural cooperative utilities continue to hold a strong lead over
the other utility categories, despite a 1.2% slip to an ACSI score of
81. Touchstone (News - Alert) Energy Cooperatives, an alliance of more than 700 local
electric cooperatives across the country, remain one of the Index's
top-scoring energy utilities at 81 (-2%). This year, however, the
aggregate of all other cooperatives sneaks by Touchstone with a 4% gain
to 83. This score places small co-ops in a tie with the very best of the
energy utility sector for 2012: investor-owned Atmos Energy and Sempra
Energy.
Health Care: Office Visits Remain More Satisfying Than Hospital Care
Despite the high cost of health care, customer satisfaction with the
sector overall is virtually steady at 78.5 (negligible +0.1%)-a score
that exceeds the national average for all sectors and industries (75.8
as of the fourth quarter of 2011). Patients continue to show a
preference for ambulatory care (such as office visits to doctors,
dentists and optometrists) over hospital care (inpatient, outpatient and
emergency room services). For 2012, ambulatory care earns an ACSI score
of 81 (+1.3%), a level of patient satisfaction that has been nearly
steady over time.
Hospitals move in the opposing direction, dropping 1.3% to 76. For
hospitals, emergency room care puts downward pressure on patient
satisfaction, averaging a low 66 (down from 72 in 2011). In contrast,
patients view both inpatient (81) and outpatient (79) services of major
hospitals much more favorably, at a level on par with ambulatory care.
About ACSI
The American Customer Satisfaction Index (ACSI) is a national economic
indicator of customer evaluations of the quality of products and
services available to household consumers in the United States. The ACSI
uses data from interviews with roughly 70,000 customers annually as
inputs to an econometric model for measuring customer satisfaction with
more than 225 companies in 47 industries and 10 economic sectors, as
well as over 100 services, programs, and websites of federal government
agencies.
ACSI results are released on a monthly basis, with all measures reported
using a scale of 0 to 100. ACSI data have proven to be strongly related
to a number of essential indicators of micro and macroeconomic
performance. For example, firms with higher levels of customer
satisfaction tend to have higher earnings and stock returns relative to
competitors. Stock portfolios based on companies that show strong
performance in ACSI deliver excess returns in up markets as well as down
markets. And, at the macro level, customer satisfaction has been shown
to be predictive of both consumer spending and gross domestic product
growth.
The Index was founded at the University of Michigan's Ross School of
Business and is produced by ACSI LLC. The ACSI can be found on the Web
at www.theacsi.org.
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