Navigant Research Blog

U.S. Electric Utility Customers Are Satisfied Overall, But Details Tell a Mixed Story

Neil Strother — August 3, 2016

AnalyticsU.S. customers have spoken, and the verdict is they are generally satisfied with their electric utility. But according to the latest J.D. Power survey, there is some downside: the business is still not on par with other industries, and communicating about outages takes a hit.

The latest data on customer attitudes holds mostly positive news for utilities:

  • Overall satisfaction improved for the fourth consecutive year, averaging 680 (based on a 1,000-point scale), which is up 12 points from last year.
  • Average frequency of brief power outages (5 minutes or less) reported by customers declined once again, as it has each year since 2010; the percentage of customers experiencing perfect power—no brief or long outages—was 41%, up from 37% in 2010.
  • When it comes to informing customers about scheduled utility work, there was improvement, too, with 73% of respondents saying they were notified ahead of time, up from 71% from last year.

Cost Declines Driving Satisfaction

One of the key drivers of satisfaction has to be the continued cost decline in monthly bills. Customers who took part in the latest survey report their monthly bills are the lowest in 10 years, averaging $129 in 2016, down from $132 in 2015. There is nothing like prices going down to help drive up satisfaction, particularly for a commodity like electricity.

Nonetheless, the utility industry lags when compared with others in overall satisfaction: auto insurance averages 811, retail banking averages 793, and airlines average 726. As the study notes, just 11 of the 137 utility brands included in the survey outperform the airline industry average. In addition, telling customers about outages took a step backward, with 40% of this year’s survey respondents saying they were informed about an outage, down from 42% in 2015.

Utility Scores by Region

Among the largest utilities by region, PPL Electric ranked highest in customer satisfaction in the eastern United States for the fifth straight year with a score of 705. MidAmerican Energy was tops in the Midwest for the ninth straight year with a score of 713. In the south, Florida Power & Light ranked highest with a score of 724. In the west, Salt River Project took the top honors for the 15th consecutive year with a score of 730. Among all cooperative utilities, SECO Energy ranked highest in this newly designated segment with a score of 769.

On the whole, this survey should give utility managers some comfort about how they perform in the eyes of residential customers, though there is obvious room for improvement. These results also mirror a similar survey from earlier this year that showed business customers with an overall satisfaction score of 704, which was a sizable jump from 677 last year and the highest level in 8 years. However, as newer technologies gain more traction in the utility business, maintaining or increasing customer satisfaction will be challenging, as noted in the Navigant Research reports Bring Your Own Thermostat Demand Response and IoT Enabled Managed Services. These reports highlight how utilities can leverage the latest technologies and drive up customer satisfaction while acknowledging the risks from poorly planned or poorly executed programs.

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