CUSTOMER SATISFACTION
In D. 96-09-092 the Commission adopted SCE's proposal to continue using its ongoing customer Survey Program to measure customer satisfaction. SCE's Survey Program, initiated in 1992, consisted of surveying customers in five service areas: field service and meter reading; local office operation; telephone center operations; service planning activities and energy service representative activities. In D. 96-09-092 the Commission adopted SCE's proposal to use its survey to measure customer satisfaction, but ordered SCE to develop more objective measures for the 1999 PBR midterm review to ensure consistency with its internal and external measures of performance9.
In D. 96-09-092 the Commission adopted SCE's 1992 historical customer satisfaction standard of 64% being "completely satisfied" or "delighted" with a 3% deadband as the PBR benchmark for customer satisfaction. Under this standard a penalty is assessed if SCE's customer satisfaction performance is below 61% and a reward is earned if the results are above 67%. A reward or penalty of $2 million dollars is assessed for each percentage point above or below this standard with a maximum of $10 million dollars. The Commission also added the condition that SCE is not entitled to a reward if the percent of customers in the bottom two survey response categories exceed 10%10.
Then in D. 98-07-077, the Commission adopted on an interim basis SCE's proposal to replace the Local Office Services category of the survey with In-Person Services category in its customer satisfaction rating calculations11. SCE requested this modification because in 1996 SCE closed all but twelve of the its Local Offices and replaced them with Authorized Payment Agencies12 (APAs). The Commission approved SCE's request with the condition that SCE would include the same five transactions originally measured (turn-on/turn-off, credit/extensions, payments, deposits, and reconnects) in the In-Person Services category, and include a weighted score that represents the combined score of both local offices and the APAs13.
In D. 98-07-077, the Commission also approved the implementation of additional changes to SCE's customer satisfaction survey proposed in Advice Letter 1276-E Appendix B14. In this Advice Letter SCE requested to increase the sample for the meter read category to approximately 3,200 for its 1997 customer satisfaction survey, weighted so that the score would carry the same one-fifth weight as other categories. SCE also requested to include its automated Voice Response Unit (VRU) as an additional category to its Telephone Center component of the survey. The Commission approved this request, and ordered SCE to include a sample interviewed with regard to their satisfaction with SCE's VRU15.
SCE reports an overall customer satisfaction rating of 71% for 1998, which represents the average percent of customers that responded "completely satisfied" or "delighted" to SCE's customer satisfaction survey.
SCE's survey uses a scale of one to five and five plus to measure customer satisfaction as follows:
_ Five for "completely satisfied" meaning that all of the customer needs were met;
_ Four for "somewhat satisfied" meaning that most of the customer needs were met, but a few were not;
_ Three for "neither satisfied nor dissatisfied" meaning that some of the customer's needs were met and some were not;
_ Two for "somewhat dissatisfied" meaning that most of the customer's needs were not met;
_ One for "completely dissatisfied" meaning that none of the customer's needs were met;
_ Five-plus for "delighted" meaning that all of the customer's expectations were truly exceeded.
The customer satisfaction rating is calculated by taking the average of the customer survey responses in the top two of the six response categories for each of the four service functions listed bellow. The following are SCE's 1998 survey results for the each service function:
Service Function Score
1. Field service and meter reading 66%
2. In-person services 75%
3. Telephone center operations 72%
4. Service planning activities 69%
SCE contracted Maritz Marketing Research Inc. to administer the 1998 customer satisfaction survey. In 1997, a different market research company, M/A/R/C Incorporated, administered the survey. SCE's reports that at least 15% of all surveys completed were verified by spot checks. Under the customer satisfaction mechanism established by the Commission, a customer satisfaction performance rating of 71% entitles SCE to a reward of $8 million.
ED reviewed SCE's survey calculations and found that SCE made significant changes to the methodology used in administering and calculating its customer satisfaction performance rating from 1997 and more significantly from SCE's original 1992 survey program. SCE changed the number of interviewing quotas, disproportionately increased and decreased the survey sample sizes in the six response categories, and changed the way the data is weighted to compensate for the changes in samples sizes. Appendix B of this resolution presents the customer satisfaction results for each service area and transaction, including the sample sizes for 1992, 1997, and 1998.
We are concerned that SCE's customer satisfaction survey has been significantly changed from the 1992 survey program and that the 1998 survey results may no longer be comparable to the 1992 scores used in establishing the 64% customer satisfaction PBR benchmark. For example, in 1992 SCE surveyed 1,454 customers for their satisfaction with the service with the Local Office service area (shown as Businesses Offices in appendix B ). The Local Office service area consisted of two service transactions (turn on/off and extensions), and three payment transactions (energy, deposit, and reconnect). In 1997, after Commission approval, SCE replaced this component of its survey with APAs (95% of total) and twelve Independent Local Offices (5% of total). In comparison, in 1998 SCE's reports an In-Person Services score of 75% based on a sample size of 3,552 APAs and 1,162 Independent Business Office customer surveys. However, SCE includes in its APA score 1,340 customers (519 for turn-on/turn-off and 721 for credit/extension transactions) that were surveyed and also accounted for in the Telephone Center component of the survey because APAs only processes payment transactions. As a result, SCE final customer satisfaction rating is artificially 1% higher, entitling SCE to an additional $2 million for services that were not provided.
The Commission also expressed this concern in its PBR mid-term review decision D.99-12-035. In this decision, the Commission adopted additional customer-satisfaction-related reporting requirements and data gathering commitments agreed to by The Utility Reform Network (TURN) and SCE. The Commission also found that SCE failed to institute specific and objective measures of customer satisfaction with service quality during the midterm review process, as explicitly directed in D.98-07-07716. The Commission reiterated its disagreement with SCE's arguments that its customer satisfaction PBR, without objective measures, is adequate, and put SCE on notice that its next PBR application must include objective measurements, in addition to or instead of a "final outcome" subjective measurement. Furthermore, if SCE wishes to use a "final outcome" subjective measurement, the Commission expects SCE to update its customer satisfaction survey altogether so that it reflects the transactions that actually occur in the places they actually occur.
ED recommends disallowing the inclusion of the turn on/off and credit/extension transactions in the APAs. Inclusion of these transactions artificially raises SCE's final customer satisfaction rating by 1%, and would give SCE $2 million in rewards for transactions that did not occurred in the APAs. ED believes that this recommendation is consistent with the Commission's mid-term review findings for SCE's customer satisfaction survey program.
9 D. 96-09-092, pg. 54.
10 D. 96-09-092, Ordering Paragraph 22.
11 D. 98-07-077, pg. 15.
12 APAs are not owned or operated by SCE and consist of local businesses (drug stores, check cashing, etc.) that process the payments in conjunction with third party vendor who handles the banking and data transfer. APAs process payment transactions only.
13 D. 98-07-077, Ordering Paragraph 5.
14 D. 98-07-077, pg. 15.
15 D. 98-07-077, Ordering Paragraph 6.
16 D. 98-07-077, pgs. 20, 21.
