Regulators Ok With Customer Service Quality

Regulators Ok With Customer Service Quality

Mar 16 - Electric Perspectives

New research by Navigant Consulting shows that regulators are satisfied overall with customer service levels and don't necessarily need to adopt across-the-board mandatory customer service quality (CSQ) standards.

A recent proposal for a national call center answer time model rule by the National Association of Regulatory Utility Commissioners (NARUC) brought attention to the issue of CSQ measures and their relationship with merger and acquisition activity, cost-cutting, and challenges with restoration in some areas. Still, utilities report customer satisfaction levels are rising or holding constant- improved productivity bas allowed utilities to cut customer service spending without affecting satisfaction, according to the study. Navigant cited a JD Power & Associates statistic that customer satisfaction with utility customer services, such as billing and call handling, has been rising over the last several years.

The Navigant study found that across the nation, there is little consistency in how CSQ standards have been applied, but this is due to things like regional and utility differences. Regulators in most states have negotiated CSQ standards with each utility on a case-by- case basis. Moreover, in most states, regulators are satisfied with energy utility customer service performance.

The research also revealed that some regulators view customer complaint rates as an indicator of customer satisfaction and service quality, and most or all regulators are highly sensitive to complaints and complaint resolution compliance-suggesting that if customers begin to voice complaints loudly about their utility, regulators will be more likely to take a hard look at CSQ standards.

Another way of ensuring higher customer service performance is through performance based ratemaking (PBR), a method not always trusted by regulators, according to Navigant, but one that is flexible and most often favored by industry. In fact, 19 states already have PBR rate agreements that include CSQ standards in their utility rate plans.

Pennsylvania and New Jersey are already developing standards for mandatory compliance by utilities. The Pennsylvania public utility commission will introduce its model early this year-a prescriptive standard for utilities, expected to include contact center answer time regulations. The New Jersey Board of Public Utilities is seeking to initiate a consumer report card initiative that measures the performance of utilities in five areas: consumer service performance; consumer satisfaction; system reliability and safety; pricing; and financial profiles.

The study found several barriers to implementing benchmarks.

* Regional factors such as geography, weather, distribution system configuration, customer demographics, and differences in regulation have an impact on performance and vary across utilities.

* Customer and regulator expectations for service quality also differ regionally. Aligning costs, which are regulated at a state level, with a national standard will be extremely complex.

* Establishing a consistent and transparent set of measurement and reporting processes represents the single most problematic design challenge for regional or national standardization of CSQ standards.

If regulators do follow a mandatory CSQ standard model in lieu of existing models or PBR models, Navigant recommends that they be aligned, balanced, controllable, measurable, flexible, and verifiable.