1. Utility Service Quality Regulation in Pennsylvania A Presentation For The NARUC Consumer Affairs Subcommittee September 27, 2005 By Wayne L. Williams, Ph.D. Pennsylvania Public Utility Commission Bureau of Conservation, Economics & Energy Planning

2. Outline Why monitor distribution customer service? Customer transaction surveys. Other customer service performance measures. Electric reliability monitoring.

3. Why Monitor Distribution Customer Service? Pennsylvania has laws enacted for electric choice (1996) and gas choice (1999). Laws said utilities are to maintain, at a minimum, the current levels of customer service to their customers as they move to competition. With restructuring, customers have a choice of energy suppliers but will continue to receive distribution service through a monopoly distribution company (former utility).

4. Policy makers did not want the quality of customer service to decline as utilities reorganized, entered new areas of business and engaged in cost control efforts. PUC needed a way to more effectively measure customer service performance. With input from interested parties, PUC passed new quality of service regulations:  Electric distribution companies – 1998 http://www.pacode.com/secure/data/052/chapter54/subchapFtoc.html  Natural gas distribution companies – 2000 http://www.pacode.com/secure/data/052/chapter62/subchapBtoc.html

5. Customer Transaction Surveys PUC regulations require Distribution Companies to survey customers who have had recent contact with the company. Surveys are conducted by independent research firms under contract with the companies. The Commission requires that all companies use uniform methodology to gather the data and report to the Commission. The companies and the Commission staff worked out the details of the sample, the wording of the survey questionnaire and reporting that all companies must use.

6. The transaction surveys measure: - Satisfaction with the ease of reaching the company. - Satisfaction with using the company’s automated telephone system. - Satisfaction with the amount of time to speak with a company representative. - Courteousness of the company representative. - How knowledgeable the company representative was. - Satisfaction with the way the representative handled the contact. - Satisfaction with how field representative handled visit to home/property. - Overall satisfaction with the quality of the service provided in the contact.

7. Other Customer Service Performance Measures PUC regulations require companies to report to the Commission annually on performance measures that can impact customer satisfaction. Companies must uniformly measure and report on customer call center access: - Average busy out rate Definition: percent of calls to call center that received busy signal (therefore, call not received by the company.) - Percent calls answered in 30 seconds Definition: of calls received, percent answered in 30 seconds or less. - Call abandonment rate Definition: of calls received, percent abandoned by customer before answered.

8. Billing: number/% residential bills not rendered in a billing period. Meter reading: number/% of meters not read in accordance with regulations. Responsiveness to customer disputes: number/% of customer disputes (complaints) that did not receive a response from the company in 30 days.

9. Transaction survey, call center & other data is collected monthly and reported to the PUC each year. The PUC produces an annual report that shows performance by company for the prior years. The report is provided to the companies and available to the public. http://www.puc.state.pa.us/ Under General Navigation on the left, click on Publications and Reports. Next, click on Yearly Reports. Scroll down to Customer Service Performance Report and click on 2003 Report, which is the most recent. The 2004 Report should be available from the Web site in late October.

10. Electric Reliability Monitoring Electric Competition Act required that distribution reliability be maintained at the same level of quality under retail competition. By orders in 1999 and 2003 the Commission established new performance standards based on average performance from 1994 to 1998 (pre-competition). Standard is a band of acceptable performance above the benchmark. Performance exceeding the standard (higher # = worse performance) can be grounds for Commission diagnostic, corrective or punitive action.

11. Performance is measured by nationally accepted indices: Saifi: System Average Interruption Frequency Index Caidi: Customer Average Interruption Duration Index

12. The Commission has short term (12 month) and long term (3 year) standards: 12 month rolling performance should be no higher than 20% above the benchmark. 3 year rolling performance should be no higher than 10% above the benchmark.

13. In 2004 the Commission updated the reliability regulations to include: Quarterly reporting of 12 month rolling performance (in addition to annual reports). Reporting of their 5% worst performing circuits and remedial plans. Transmission and distribution inspection and maintenance goals versus actual performance.

14. Budgeted vs actual transmission and distribution operation and maintenance expenses and capital expenditures. Linesman, technician and electrician staffing levels for operation and maintenance. Companies must have Commission approval to exclude “Major Events” form their reliability calculations.

15. The Commission standardized the calculation of a major event by requiring that it apply to 10% of customers loosing power for >5 minutes across the entire service territory vs multiple operating areas. Together, the revised standards and reporting give the Commission improved tools to monitor reliability and diagnostic tools to analyze why performance may be deteriorating. http://www.puc.state.pa.us/electric/electric_reliability.aspx

16. Contact Information: Wayne L. Williams (717) 787-2139 waywilliams@state.pa.us