CITY OF LODI DEPARTMENT OF ELECTRICITY
SPRING 2003
Business CUSTOMER OVERSAMPLE

Topline Report

This report summarizes and highlights the findings generated by City of Lodi Electric Utility Department’s benchmark survey conducted among a cross section of Lodi business customers.  The survey was an “oversample” of CMUA’s 2003 Statewide Survey of California Businesses served by Municipal Utilities.  Both the Lodi oversample survey and the CMUA Statewide survey were conducted by means of telephone interview.  The CMUA survey was conducted in May, 2003, and interviews for the Lodi survey were done in June, 2003.

The Lodi survey is based on 50 telephone interviews among a sample of businesses provided by City of Lodi Electric Utility Department.

The CMUA Statewide survey was based on 500 telephone interviews – 400 conducted among businesses served by California municipal utilities (150 in Northern California and 250 in Southern California) and 100 served by the state’s investor-owned utilities.

Within this topline summary report, Lodi Electric responses – based on the 50 telephone interviews just conducted – are compared and contrasted against findings generated by the statewide survey:

• Business customers of NCPA Members (as a group – 63 interviews)
• Business customers of California municipal utilities (400 interviews)
• Business customers served by the state’s investor-owned utilities (100 interviews)

Attached to this memorandum is the actual questionnaire used in the Lodi survey, showing the results for Lodi and the other dimensions noted above, on a question-by-question basis.

Measuring Performance – RKS’ Business Performance Record

RKS’ Business Performance Record (BPR), in effect, summarizes business customers’ assessment of their utility’s performance in a single number.  The factors within the BPR fill in the blanks by providing more details on the components underlying overall performance:

The table above shows the BPR for Lodi customers, compared against results based on identical questions asked among municipal utility and IOU customers throughout California generated by the 2003 CMUA Statewide survey.  The comparison reveals:

• Lodi receives a BPR (7.64) which is virtually identical with the score California municipal utilities across the state receive from their business customers (7.63).
• Lodi’s score is nominally (but not statistically significantly) lower than the average score NCPA members receive from their business customers (7.78).
• Lodi’s score is (statistically significantly) higher than the average score obtained by California’s IOUs from their business customers (6.52).

Within the BPR model, there are several factors or components which roll up to the total BPR shown above.  An analysis of the factors within Lodi’s BPR suggests:

• Lodi business customers rate their utility highly on:

Ø      Value

Ø      Relationship

Ø      Power information

Ø      Power delivery

• The weaknesses for Lodi are:

Ø      Price

Ø      Image

Working to Conserve Electricity (Q1c)

When asked how hard they are working to conserve electricity this survey finds somewhat fewer Lodi customers responding they are working hard:

Just under one in three Lodi customers say they are working hard – a number falling below the percent of NCPA (44%), business customers served by California municipal utilities (38%) and business customers served by California IOUs (38%) who respond the same way.

Utility Image (Q2,3)

The survey finds that while Lodi is generally well thought of, it does not score as highly as its neighbors that are NCPA members, or other California municipal utilities:

But this survey does show that in the eyes of Lodi customers, the utility is on an improving track:

Over one-fourth of Lodi business customers say the utility has improved (compared with 54% responding it has stayed the same and 14% who say it has gotten worse.)  This is the highest percentage recognizing improvement, compared with Lodi’s neighbors.

Further probing finds business customers holding the following view of various aspects of Lodi’s – and neighboring utilities’ – image on nine dimensions:

Lodi’s business customers give their utility (statistically significantly) higher marks than business customers of California IOUs on seven of the nine dimensions.

But more relevant are the comparisons between Lodi and its NCPA neighbors.

Viewed from this perspective, Lodi scores a bit higher than its NCPA neighbors on:

• Progressive and cutting edge
• One of most valuable business partners
• Good community citizen

Lodi does about as well as its NCPA neighbors taken as a group on:

• Trustworthy
• Meets expectations
• Well-run utility

Lodi scores a bit weaker than its NCPA neighbors on:

• Works hard to retain our business
• Prepared for the future
• Values us as a customers

Power Delivery (Q4,5,6)

This survey finds Lodi business customers generally satisfied with the power delivery they obtain from their local utility:

About half (46%) of Lodi business customers report that they recall experiencing no outages over the past 12 months – a percentage that is similar for NCPA members as a group and for business customers of all California municipal utilities.  For business customers of IOUs, only a third recall no outages.

Among those who experienced one or more outages over the past 12 months, the average number that Lodi business customers recall (1.8) is similar to the NCPA total (2.3) and the California municipal utility average (2.0) and lower than the IOU average (2.8)

With regard to interruptions – surges, dips and fluctuations – Lodi customers recall far fewer of these than do business customers of NCPA utilities, California municipal utilities and California IOUs.

Looking at specific ratings of power delivery support the conclusion that this is a strong suit for Lodi:

According to its business customers, Lodi scores about the same as its NCPA neighbors taken as a group on four out of the five dimensions of power delivery tested.  The one dimension on which Lodi seems to fall short is:

• Easy to reach to obtain information about a power outage

Further probing finds that being kept informed by their utility about restoration times is called very important by more than three fourths of business customers across all of the groups:

Contact (Q8,9)

About half of Lodi business customers say they have not had any contact with their utility over the past 12 months:

This “no contact” incidence is significantly higher than that found among NCPA members as a group.

This also has an effect on the average number of times the customer has contact with the utility:

• The average number of contacts per year among Lodi business customers is below those of the other benchmarks shown in the table above.

Among those Lodi business customers having contact with their utility within the past year, most of it (88%) was by telephone. The main reasons for the contact were:

• To report an outage
• Bill question or problem
• To arrange for new service or disconnection
• To pay a bill
• To get maintenance service

Further probing asked business customers to assess their satisfaction with the utility representative with whom they spoke:

The results point up these findings:

• Compared to California IOUs, Lodi is doing very well
• Compared to California municipal utilities statewide, Lodi is generally doing as well
• Compared to its NCPA neighbors, Lodi business customers give their utility consistently lower scores.

There were some questions asked about visiting the utility’s website.  This survey finds 12% (six Lodi business customers) responding that they have ever visited their utility’s website.  This incidence is much lower than comparable benchmarks:

• NCPA – 24%
• Total CA Muni – 22%
• Total CA IOU – 32%

Billing (Q11)

Lodi business customers award their utility generally high marks for clarity of information contained on their electric bill (7.9) and for the accuracy of their meter readings (8.2)

However, while Lodi’s scores are comparable with Total California municipal utilities, business customers of NCPA members as a group give their utility higher marks (8.4 clarity of information; 8.6 accuracy of meter readings).

Pricing and Value (Q12,13)

Lodi business customers award their utility high marks on service, but lower marks on prices that are competitive and providing good value for the money:

Lodi’s relative weakness on the price dimension is illustrated in the responses to the question asking business customers to assess the price they pay for electricity today (on a 0 to 10 scale where 0 means the price is low and 10 means the price is high).  In the following table a higher numerical mean reflects the feeling that the price is high:

Recalling that in interpreting the results for this question, a lower number signifies a more positive response than a higher number, Lodi’s average score of 6.9 is significantly below the IOU average (7.7) but is also significantly above the NCPA average (5.8)

When Lodi’s electric prices are placed within the context of the prices charged for electricity by “neighboring California utilities,” here are the results:

By 28% to 16% – a ratio of 1.75:1 – more Lodi customers know that the electricity prices they pay are lower than those charged by neighboring California utilities.  But it should also be emphasized that a plurality of more than one-third (36%) are not sure how to answer the question.

By contrast, among business customers served by NCPA members, the ratio of lower:higher stands at 4.3:1, and among California municipal utilities as a group, the comparable ratio is 3:1.

Energy Efficiency and Public Benefits Programs (Q14)

This research finds:

• 12% of Lodi business customers responding they had an energy audit done by their utility.  (The comparable score among NCPA members is 25%, and among California municipal utilities as a group is13%.)
• 24% have participated in any energy efficiency of conservation programs that Lodi offers business customers. (By comparison, the corresponding incidence stands at 30% among NCPA members and 20% among all California municipal utilities.)
• 42% of Lodi customers responding they had seen, heard or read anything about public benefits programs offered by their utility.  (The corresponding score is higher among NCPA members – 59% – and similar among all California municipal utilities – 42%.)

Among those Lodi business customers who are aware of the programs offered by their utility, the effectiveness scores – on a 0 (completely ineffective) to 10 (extremely effective) scale – they offer are good:

• Helping customers to significantly lower energy costs: 7.4
• Providing practical and useful information that helps customers use less energy in their business: 7.2
• Making customers aware of the benefits of using renewable resources: 7.2
• Rating overall job Lodi is doing in designing and implementing these kinds of programs : 8.0 on 0 (poor) to 10 (excellent) scale

About half (54%) of Lodi customers say they are getting enough information about these programs and services, but one third – 36% – respond they are getting too little information.  When asked about the preferred means of obtaining communications about these programs, here is how they respond:

Clearly, Lodi customers prefer:

• Bill inserts
• Direct mail

as the ways they want their utility to communicate about these programs.

Questions on public benefits programs were rounded out by describing seven different programs and asking business customers, for each program, their interest in it:

Lodi business customers express most interest in:

• PV rebates
• Advanced metering
• HVAC maintenance programs
• Having the ability to view the organization’s electricity usage on Lodi’s website

Utility Type:  Awareness and Preference (Q15)

Two-thirds (66%) of Lodi customers know their utility is a community owned municipal utility.  Just 6% identify Lodi as an investor owned utility and 28% are not sure.  Regionally (71% of NCPA members) and statewide (71% of business customers served by California municipal utilities) the percent who are aware their utility is a municipal utility are similar to Lodi.

When asked their preference as to the type of utility they want to have serve them, two thirds of Lodi customers (compared with 68% of NCPA members and 73% of municipal customers statewide) prefer to be served by a muni.  Among the remainder, 2% of Lodi customers prefer an IOU and 30% are “not sure.”

Deregulation (Q16)

Despite the massive failure of deregulation in California, many business customers favor trying to come up with a better solution.  Half of Lodi businesses favor reworking deregulation – a position which is different from the way business customers of NCPA members respond:

By 2:1 (50% to 24%) Lodi business customers favor trying to come up with a better electricity deregulation plan.  The corresponding ratio among customers of NCPA members is 1:1 while among business customers of total California municipal utilities it is 5:3.

Economic Development (Q17)

This survey finds slightly fewer business customers in Lodi planning expansion compared with the other benchmark groups:

About one in seven (14%) of Lodi business customers say their organizations do have plans to expand over the next 12 months – a number that is almost half the rate of business customers of NCPA members taken as a group.

What is most interesting is the finding that 26% of Lodi business customers respond that they are “not sure” about their organization’s plans – a number that is significantly higher than any of the other groups.

Concluding Observation

This research finds City of Lodi Electric Utility Department generally well thought of by its business customers.

From the standpoint of overall performance Lodi is assessed:

• Better than California’s investor-owned utilities
• As well as other municipal utilities throughout California
• Not quite as well as its NCPA neighbors

Lodi scores well on:

• Value
• Relationship
• Power issues

Lodi’s weaknesses appear to be:

• Price
• Image

Looking at the strengths, first, Lodi stands out – in the eyes of business customers – in providing reliable and clean power.  The only slightly negative rating in the whole power area is in being “easy to reach for information about an outage.”  The research finds Lodi receiving a score of 7.4 (on a 0-10 scale) compared with 7.4 for other municipal utilities but 8.1 for NCPA members.

On the price dimension, Lodi’s scores are lower than NCPA and the California municipal utility average on:

• Prices that are competitive

Lodi is lower than NCPA on:

• Good value for the money

And the overall assessment of the price paid for electricity finds Lodi business customers giving scores to their utility which are more negative than the overall California municipal utility average, and NCPA members.

Lodi finds itself in an interesting situation:  business customers view its price as a weakness; but on the other hand, the utility does better (as well as other California municipal utilities)  on the value dimension.

One other piece of information is worth pointing out here:

The rate at which Lodi business customers have contact with their utility is relatively low:  48% have had no contact in the past year (compared with 35% responding this way for all California municipal utilities, and a lower 22% for NCPA members) and among those who have had contact the average number of contacts stands at 3.9 (compared with 6.3 for all California municipal utilities and 8.1 for NCPA members.)

RKS believes that one solution is to encourage and beef up contact between business customers and their utility.

RKS experience shows that if the contact is handled properly, perceptions of value and customer satisfaction tend to increase.  In fact, the CMUA Statewide survey shows that among those large business accounts that have a personal account representative, the overall performance – or customer satisfaction – scores they award their utility are one full point higher than for those that do not have a personal account representative.

RKS believes that adopting a strategy of explicitly encouraging contact between the utility and business customers – so long as the contact is handled properly and competently – is one way to improve scores in the future.

This strategy should also have the effect of boosting the “value” ratings (which are already respectable) while, at the same time, positively affecting price perception.

Another strategy is to explicitly address the three image issues on which Lodi scores are weak:

• Works hard to retain our business
• Values us as a customer
• Prepared for the future

The third bullet point is a measure of flexibility.  Although there is some ambiguity here, Lodi customers appear to be saying here that although they see their utility as being progressive, they are not certain about how well it implements plans and therefore is prepared to meet the challenges of the future.  This is the kind of issue that can be addressed over time – slow reinforcement pointing to the utility’s awareness of and flexibility with regard to meeting future challenges.  Again, direct contact between customer and utility is bound to have a beneficial impact here.

The other two bullet points seem to cluster around the concept of appreciating customers and communicating that appreciation.  Increased direct contact is an effective prescription here, as well.

The bottom line is that this is a good report card for City of Lodi Electric Utility Department.  And the things that the research suggests as needing to be fixed – those items outlined above –do lend themselves to remedial action.