Residential gas utility customers willing to pay more for improvement in service, study says

October 23, 2002 — While residential customers are generally very satisfied with their local natural gas utility, 45 percent identify an area for potential improvement and many of them are willing to pay more to see it happen, according to the J.D. Power and Associates 2002 Gas Utility Residential Customer Satisfaction StudySM released Wednesday.

The inaugural study measures customer satisfaction performance among 50 of the largest local gas distribution companies in the country. The overall customer satisfaction measurement is based on five factors (in order of importance): company image, price and value, billing and payment, field service and customer service. Billing and payment and customer service are cited by respondents as areas that need the most improvement.

“Our research clearly indicates that as the gas utility industry grows, providers will need to better understand the impact of customer satisfaction and the services it makes available to customers, such as online billing and bill payment,” said Alan Destribats, executive director of the utility practice at J.D. Power and Associates.

“When customers say they are willing to pay more if it means they are offered better service, that’s something a utility provider should take seriously.”

The study finds that consumers in the West and South are more satisfied with their gas providers than are customers in the East and Midwest.

“Nationally, consumers in areas that rely heavily on gas for heating, such as the East and Midwest, tend to use more gas, which is reflected in higher monthly bills,” said Destribats. “This can help explain why these regions have lower overall satisfaction scores than warmer regions, where gas is used as a ‘lifestyle’ commodity.”

The study also finds that 44 percent of consumers who do not currently have gas service would prefer gas as a fuel source for many of their household appliances, and 15 percent are seriously considering converting to gas in the near future.

Eastern Region

New Jersey Natural Gas ranks highest in customer satisfaction in the East, performing particularly well on the field service and billing and payment factors.

Also scoring particularly well in the region are: Elizabethtown Gas, Washington Gas Light, Baltimore Gas & Electric, Columbia Gas of Pennsylvania and South Jersey Gas.

Midwestern Region

CenterPoint Energy-Minnegasco and Consumers Energy tie to rank highest in the Midwest. CenterPoint Energy-Minnegasco receives high scores in billing and payment as well as price and value, while Consumers Energy performs particularly well on both billing and payment and company image.

Also performing well in the Midwest region are: Laclede Gas, Cincinnati Gas & Electric and Missouri Gas Energy.

Southern Region

The South boasts the study’s two top satisfaction index scores and the highest region average. Alagasco ranks highest, with consistently high scores on all factors measured in the study, followed by Piedmont Natural Gas.

Also performing above the region average are: Atmos Energy Louisiana, CenterPoint Energy-Entex, and Oncor.

Western Region

Southern California Gas ranks highest in the West, receiving the region’s top scores on every factor.

Southwest Gas and Northwest Natural also perform above the region average.

The 2002 Gas Utility Residential Customer Satisfaction Study is based on more than 9,000 telephone interviews with U.S. residential gas customers. The responses were collected during June and July of 2002.

Headquartered in Westlake Village, Calif., J.D. Power and Associates is a global marketing information services firm operating in key business sectors including market research, forecasting, consulting, training and customer satisfaction. The firm’s quality and satisfaction measurements are based on responses from millions of consumers annually. Media e-mail contact: michael.greywitt@jdpa.com or john.tews@jdpa.com

No advertising or other promotional use can be made of the information in this release without the express prior written consent of J.D. Power and Associates. www.jdpa.com

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