Customer satisfaction and electric utilities.
William P. Zarakas and Philip Q Hanser are Principals with The Brattle Group. Kent Diep is a Research Analyst at The Brattle Group.
It’s no surprise that customer satisfaction is increasingly important to retail electric utilities. Satisfying customers was important during the old days of utility regulation, when utility customers had little if any choice concerning their electricity supplier. It’s even more important today, when customers can invest in equipment to bypass the grid in whole or in part, and it will inevitably be more pronounced in the future, when distributed generation options become more widespread and affordable.
The Brattle Group’s recent research on customer satisfaction, based largely on an empirical analysis, studied the relationships across a data set that included: measures of customer satisfaction, indicators of electric system reliability, and utility cost structures as well as system characteristic and demographic variables. This analysis confirmed some of the views that have been widely held by utility managers, but which were based more on a sense of conventional wisdom than backed up by the data. It provided a few surprises as well, which are important to take into account as utilities brace for mounting competition in retail markets and develop strategies to enhance satisfaction among their customers.