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Small businesses give IOUs low marks on customer satisfaction.
Fortnightly Magazine - October 15 2002

Underwhelmed by the Utilities That Serve Them?


Small businesses give IOUs low marks on customer satisfaction.

At best, small businesses generally have viewed their power utility with ambivalence, and at worst, looked at it with disdain. Events such as the California deregulation debacle and the Enron collapse did little to enhance the reputation of energy suppliers in the eyes of small business operators. Recent E Source Small Business Service findings at Platts Research & Consulting indicate that small business customers of municipal and investor-owned utilities think less of these organizations then they did a year ago, while electric cooperatives enjoy an increased level of customer satisfaction.

Each year, the E Source Small Business Service surveys approximately one thousand small businesses in the United States and Canada. Respondents represent the grocery, restaurant, education, light industrial, retail, healthcare, and office sectors. They are queried on a variety of topics, ranging from product and service interest to internet usage. This year, E Source asked a series of questions to measure small business perceptions of their power providers. Respondents rated the following statements from one to 10, with 10 equivalent to "strongly agree:"

My energy supplier:

  • Values my business as a customer
  • Understands my business needs
  • Understands my energy needs
  • Has earned my loyalty

On average, co-ops scored a full point above municipal utilities and investor-owned utilities received the lowest scores. ()

How happy small businesses are with their utility appears, at least in part, to be a function of what kind of business they conduct. In respect to feeling valued as a customer, 26.4 percent of education respondents and 17.6 percent of lodging customers gave energy suppliers their highest rating. In contrast, only 13.6 percent of office respondents and 12.7 percent of light industrial operators gave top marks.

When it comes to business needs, utilities score highest with the education sector-30.6 percent of these respondents gave their highest rating. Some 25.2 percent of grocery store respondents also gave highest marks. Only 14.4 percent of lodging respondents gave a rating of ten to their utility, while office respondents were the least satisfied in this regard, with 12.3 percent giving top marks.

The question of how well a utility understands energy needs evokes similar responses. Some 29.6 percent of educational respondents gave top marks to their utility, as did 28.5 percent of grocery store operators. Light industry and office once again were most resistant to giving out top marks, with only 14.9 percent and 13.6 percent giving a ranking of "ten."

The education sector also ranked utilities high in respect to the question of whether they had earned their loyalty. Some 27.2 percent of educational respondents gave top marks, as did 21.7 percent of office operators. On the other hand, only 14.5 percent of restaurant and 13.6 percent of lodging respondents were willing to give power suppliers their highest rating.

What conclusions can be drawn from these rankings? First, it appears that co-ops, who are often actively pursuing a role in supporting local economic development are seeing these efforts pay off in terms of small business