HomeMy WebLinkAboutPACE991.BAB.docQ. Please state your name and business address for the record.
A. My name is Beverly Barker. My business address is 472 West Washington Street, Boise, Idaho.
Q. By whom are you employed and in what capacity?
A. I am employed by the Idaho Public Utilities Commission as Deputy Administrator of the Consumer Assistance Division.
Q. What is your educational background and relevant employment history?
A. I received a Bachelor of Arts Degree in Political Science and Sociology from Indiana University in 1974. I am a Certified Professional Mediator. I have attended the NARUC Regulatory Studies Program and have taken many professional and graduate level courses on public administration, management, conflict resolution and consumer affairs. I have served on the faculty of the Center for Public Utilities at New Mexico State University and the NARUC Regulatory Studies Program at Michigan State University. I served as Chair of the NARUC Staff Subcommittee on Consumer Affairs from 1990-1993 and am still a member of that subcommittee. I have been employed by the Commission since December 1976 and have been in my present position since January 1983.
Q. Please describe your testimony in this proceeding.
A. I will discuss the performance standards and guarantees related to customer service proposed by ScottishPower in connection with its proposed merger with PacifiCorp. Staff witness Rick Sterling will discuss the proposed performance standards related to network availability and reliability. I also will address ScottishPowers proposals regarding programs for payment-troubled customers.
PERFORMANCE STANDARDS
Q. Please give us an overview of the proposed performance standards related to customer service.
A. There are two standards offered, one related to the average speed of answering calls to PacifiCorps Business Centers and the other related to the amount of time taken to respond to and resolve complaints referred by the Commission. The company is proposing to answer 80% of calls to each business center within 30 seconds. The company commits to implement this standard within 120 days after completion of the transaction. By
January 1, 2001, the goal is to improve the answer time to 80% within 20 seconds, which is the generally-accepted industry standard. It intends to further improve the average speed of answer to 80% in 10 seconds by
January 1, 2002.
The second standard, which ScottishPower refers to as Commission Complaint Resolution, consists of three separate goals. PacifiCorp is to respond to all complaints referred by the Commission to the company within 3 working days. Complaints involving disconnection of service will receive a quicker response (within 4 business hours). The company will resolve 90% of Commission-referred complaints within 30 calendar days. The company commits to meet these goals within 90 days of completing the transaction. It intends to further improve performance by meeting the goal of 95% within 30 days by 2001.
Q. How do these standards compare to PacifiCorps present performance?
A. PacifiCorps goal for telephone service answering levels is 80% of calls handled within 45 seconds. The results actually achieved for 1998 are 55% of calls handled within 45 seconds for the Portland Business Center. For the Wasatch Business Center, 49% of calls were handled within 45 seconds. The average speed of answer for both centers exceeds one minute. ScottishPowers proposed standards, if met, would represent a significant improvement over PacifiCorps past performance.
With respect to handling of Commission-referred complaints, PacifiCorps target as of April 1999 is 3 business days for investigation and response. Until recently, the target was generally five business days, with complaints regarding disconnection of service being handled within 8 business hours. PacifiCorp currently resolves 86% of all complaints within 30 calendar days.
Q. Has the Consumer Assistance Division been satisfied with PacifiCorps responsiveness to Commission-referred complaints?
A. No. It took an average of 16 calendar days to resolve Utah Power complaints in 1998. This compares to an average of 6 days for U S WEST and 4 days for Idaho Power, both of which had significantly more complaints than Utah Power. Sixteen percent of complaints took 30 or more days to resolve. If PacifiCorp were to meet the target proposed by ScottishPower, it would represent a significant improvement in performance.
Q. Are there any penalties attached to the failure to meet these standards?
A. Unlike the standards associated with network performance, ScottishPower has not extended its offer of $1 per Idaho customer for failure to meet the two customer service standards within the timetables it has proposed. ScottishPower has repeated throughout its testimony that it is a customer-focused company truly committed to good customer service. I assume that ScottishPower fully intends to make good on its promises. Therefore, I see no reason why the same penalty for failure to perform should not be extended to these two general performance standards. I recommend that the Commission extend the penalty provisions to these two standards.
CUSTOMER SERVICE GUARANTEES
Q. Please give us an overview of the proposed service guarantees.
A. ScottishPower has identified several areas involving company response to an individual customers request or problem. The company has established performance targets in each of these areas, with corresponding compensatory payments to affected customers if PacifiCorp fails to meet those targets. The payments will take the form of billing credits on each separately-metered customer account, and will be issued to any individual customer affected by the missed commitment.
Q. Will customers automatically receive these credits if the company fails to meet its target?
A. Yes, with two exceptions. Customers must claim credits for planned and unplanned service outages. In both instances, the company will not necessarily know whether a customer, in the case of a planned outage, did not receive advance notification, or, in the case of an unplanned outage, did not have service restored within 24 hours. According to ScottishPower, there is no way at the present time to determine exactly which customers are affected by an outage. PacifiCorp may be able to restore service to a general area but an isolated customer or group of customers may remain out of service, and the company will not necessarily know that unless the customer reports the outage. It is my understanding that customers will not have to specifically request a credit or file a formal claim; the act of reporting the outage situation will itself trigger the credit. Based on this understanding, I am comfortable with these two guarantees being claim-based.
Q. Do you agree that customers should receive a credit on bills instead of a refund check?
A. Yes, for two reasons. In most circumstances, customers prefer credits to refunds. Credits involve no extra effort on the customers part, unlike having to cash a refund check, and are usually processed more quickly by the utility. Secondly, it is generally less costly for utilities to process credits than it is to issue refund checks.
Q. Do the guarantees promise an average or minimum level of performance?
A. No. In essence, each guarantee defines an outer edge beyond which the level of service provided is unacceptable. My understanding is that ScottishPower expects that during the normal course of business, performance will be better than the target implies.
Q. ScottishPower has identified a number of circumstances in which the guarantees will not apply. Are these exclusions reasonable?
A. Based on my understanding of the exclusions, yes. However, I have some reservations with respect to the exclusions for service outages, which I will discuss in more detail later. For those guarantees covering situations where field personnel would be involved, the company would not have to provide credits if its failure to meet the target was due to an extreme event (e.g., a major storm or natural disaster), a labor strike, or a safety-related issue.
Q. Why is ScottishPower offering customer-focused guarantees?
A. ScottishPower views these guarantees as a direct commitment to PacifiCorp customers that it will strive to meet certain targets and, should it fail to meet those targets, the company will provide a predetermined credit to affected customers. ScottishPower stated a preference for compensating customers directly rather than paying fines or penalties for non-performance to a third-party.
Q. Do you agree with this approach?
A. Yes, I do. Fines and penalties are effective enforcement methods that can be used to elicit compliance with a Commission directive or punish wrong-doing. Voluntary assessments for non-performance, such as proposed by ScottishPower in conjunction with its Network Performance Standards, provide a signal to the general public, regulators, and other key decision-makers that the company has a financial stake as well as a moral commitment to make good on its promises. However, only direct retribution provides individual customers with a clear indication that the company takes its commitments seriously.
Q. Are the proposed credit amounts based on the estimated value of a customers inconvenience or loss due to the companys failure to meet its target?
A. ScottishPower has indicated that the amounts are not designed to be compensatory, such as one might expect in a claim for damages, nor are they intended to correspond to the amounts offered in the United Kingdom. Rather, the amounts are based on the companys assessment of what would be reasonable amounts to pay in the United States market. In my opinion, the guarantee payment amount should provide a meaningful indicator of concern to PacifiCorp customers. I would characterize the amounts offered by ScottishPower as falling at the low end of the range of reasonableness.
Q. Do customers care about utility performance in the areas identified by ScottishPower in its proposed service guarantees?
A. Yes. Although not all customers will require PacifiCorps services in all of the areas identified, there is some value to all customers in knowing that the company has specific goals and will pay a penalty for failing to achieve those goals. In a survey of Utah Power customers conducted on behalf of PacifiCorp, 85 out of the 100 customers surveyed said it was important that utilities be required to set standards and be penalized for failure. Half of these customers identified better, faster, and more efficient service as perceived benefits.
Q. Will the service guarantees be included in PacifiCorps tariff for Utah Power?
A. ScottishPower states that it will provide annual reports to the Commission and its customers regarding its performance. However, it has not proposed to include the guarantees in its tariff. I recommend that PacifiCorp be required to do so. Utility tariffs describe the price, terms and conditions of service offered to customers. Unlike voluntary programs, which may be offered, modified or withdrawn at the discretion of a utility, tariffs are approved and enforceable by the Commission.
Q. Will credits issued to Idaho customers for failure to meet guarantees be considered an expense to be borne by customers?
A. No. ScottishPower intends to treat these payments as a shareholder expense.
Q. Please discuss ScottishPowers proposed service outage guarantee.
A. In the event of an outage resulting from a fault in PacifiCorps system, the company will restore service within 24 hours. The company has proposed a general performance standard of restoring service on average to 80% of its customers within 3 hours, which suggests that PacifiCorps normal response time will be much shorter than the 24 hour service guarantee standard.
Q. How has PacifiCorp performed in Idaho with respect to restoring service?
A. In 1998, PacifiCorp reports that it restored 94% of its customers within 3 hours and 100% within 24 hours. However, both PacifiCorp and ScottishPower have indicated that they lack confidence in these figures. The suspicion is that performance is not as good as these numbers suggest.
Q. Under ScottishPowers proposal, there are a number of circumstances in which the guarantee does not apply. Are these exclusions reasonable?
A. The exclusions make the standard less valuable to customers and significantly decrease the amount of exposure the company has to customer claims. The exlusions include the following circumstances: outages resulting from widespread damage to the transmission or distribution system (extreme events); stikes; safety concerns; customer agrees to remain without power; or problems exist with the customers facility. I would recommend a shorter maximum timeframe for restoration of service, since the circumstances most likely to cause lengthy delays in restoration of service are excluded from the guarantee.
Q. Does the Commission have standards governing out-of-service situations?
A. The Commission has not adopted any specific performance standards for electric utilities. The Commission has adopted out-of-service standards for local exchange service provided by telephone companies. Rule 503 of the Telephone Customer Relations Rules (TCRR) requires restoration of service within 24 hours after the report of an outage with two exceptions. If a customer reports that the outage creates an emergency, the company is required to respond within 16 hours. If a non-emergency outage occurs between noon on Saturday and 6:00 p.m. on the following Sunday, the company must restore service within 48 hours or by 6:00 p.m. on Monday, whichever is sooner. In the event of failure to restore service within the applicable timeframe, a customer will receive a credit equal to the monthly rate for basic exchange service.
Q. Do you think any standards proposed by PacifiCorp should mirror the requirements of TCRR 503?
A. No. My experience has been that electric utilities try to restore service as soon as possible, regardless of the time of week or the existence of an emergency situation. The lack of a rule setting service quality standards is in fact a testament to the Commissions positive experience with the electric utilities it regulates. PacifiCorp is well aware of how critical the prompt restoration of power is, particularly to its irrigation customers. If the Commission decides to accept the companys standards, I recommend that the Commission explicitly state its expectation that in the event of a company-caused outage, PacifiCorp will restore service as soon as possible.
Q. What amount will the customer receive for failure of the company to meet its guarantee?
A. Residential customers can claim a credit of $50. Commercial and industrial customers can claim $100. For each additional period of 12 hours out of service, the customer can claim $25. These credits will not be automatically credited to customers accounts. An affected customer will receive the credit only if the customer reports the outage to the company.
Q. ScottishPower has committed to keep all mutually-agreed appointments with the customer. Is this a meaningful commitment?
A. There are not many occasions that demand a visit to a customers premises and also require the customers presence. However, the companys guarantee recognizes the value of a customers time as well as emphasizes to employees the importance of following through on commitments. In instances where a premise visit is necessary, the companys intention to offer morning and afternoon appointments starting in 2001 will be even more responsive to customers general desire not to spend any more time than necessary waiting for a utility representative to appear on their doorstep.
Q. What amount of credit is available to a customer if the company fails to keep an appointment?
A. The company is proposing a credit of $50 to be automatically applied to a customers account.
Q. ScottishPower is proposing to connect service within 24 hours if no construction is required and all government requirements are met. Is this a reasonable standard?
A. Yes, although, as I stated in my comments with regard to service outage restoration, the Commissions expectation is that connections will take place as soon as possible. Prompt connection is particularly critical to irrigation customers. Failure of the customer to obtain an electrical inspection is a common cause of delay in connection, and it is not unreasonable for the company to exclude this situation from its standard. Excluding construction-related delays is also reasonable and would match customer expectations. I assume that the exclusion for situations where the customer is not present when PacifiCorp visits the premises only applies if the customers presence is necessary to connect service.
Q. Does ScottishPowers target differ from PacifiCorps current target?
A. No, it does not. However, a customer service transaction study done on behalf of PacifiCorp shows a significant decline in customer satisfaction with respect to the companys performance in handling new connections over the past 3 years. There clearly is an opportunity for PacifiCorp to improve in this area.
Q. What amount of credit is available to a customer if connection takes longer than 24 hours?
A. The company will automatically provide a $50 credit. For each additional 12-hour period of delay, PacifiCorp will pay an additional $25.
Q. Please comment on ScottishPowers proposed standard for providing estimates for new service connections.
A. When a customer requests service at a previously unserved location, ScottishPower is proposing to contact a customer within 2 business days of the customers initial request for service to schedule an appointment with an estimator. If network construction is required, the company will provide a written estimate within 15 business days of that appointment. If no network construction is required, it will provide an estimate within 5 business days of the initial meeting with the estimator. A credit of $50 will apply for each failure to meet the standard. Again, I assume that the exclusion for situations where the customer is not present when PacifiCorp visits the premises only applies if the customers presence is necessary.
Q. Does PacifiCorp have a current performance target in this area?
A. No. The 15-business-day target falls outside normal industry intervals for providing engineering estimates. I recommend that a 10-business-day standard be adopted. The other intervals proposed by ScottishPower are acceptable.
Q. The company commits to investigate and respond to a customers billing inquiry or report of a meter problem within 15 business days. Is this a reasonable timeframe?
A. In most cases, I would expect the company to respond to billing inquiries more expeditiously. However, I suspect that memories of the massive problems experienced by PacifiCorp when it changed its billing system in 1996 influenced the setting of the outward parameter for this standard. Since standards should be set for normal conditions, I would recommend a deadline of 5 business days for investigation and response.
The 15-day timeframe set for meter problems is reasonable, since such problems typically do not interfere with the delivery of electricity and are likely to require a premise visit by the company and at least one appointment with the affected customer. PacifiCorp has a current internal target of 20 business days to respond to meter problems, so ScottishPowers proposed standard would represent an improvement. The company is proposing a $50 automatic credit in instances where the company fails to meet either of these commitments.
Q. Have there been problems with billing and metering in Idaho?
A. Billing and metering problems have been a major cause of concern, accounting for 69% of Utah Powers customer contacts with the Commission in 1997 and 33% in 1998. If one counted the credit problems that result from billing and meter problems, these percentages would be higher. Customer service transaction research done on behalf of PacifiCorp shows that only 50% or fewer of the customers interviewed described themselves as very satisfied with the companys performance in the area of billing adjustments during the past 3 years.
Q. ScottishPower is proposing to give customers at least 2 calendar days notice if the company needs to interrupt service for planned maintenance work or testing. Do you agree with this standard?
A. Several years ago the Commission Staff, in response to customer concerns, examined the need for a rule requiring advance notification of planned outages to affected customers, since the common practice at the time was not to provide notice. Commercial customers were particularly distressed by unannounced planned outages, since they would have been able to take steps to mitigate the impact of the interruption on business operations. After informal discussions with energy utilities, Staff agreed not to propose a rule based on the understanding that companies would provide advance notification whenever possible. I continue to support the concept of advance notification and applaud the companys effort to incorporate it into a standard. A minimum of 2 days should allow adequate time for customers to prepare for the interuption or respond to the companys notice. PacifiCorp currently does not have specific time intervals associated with advance notice of planned interruptions, but it does have a policy of trying to notify customers in some manner.
Q. Under what conditions and what amount of credit will be offered if the company fails to meet this guarantee?
A. Customers must contact the company regarding the lack of notification in order to receive the billing credit of $50 for residential customers and $100 for commercial and industrial customers.
Q. What commitment has ScottishPower made with respect to power quality complaints?
A. The company commits to provide an explanation of the problem within 5 business days. If an investigation is necessary, it will be initiated within 7 business days of contact with the customer. Failure to meet the guarantee results in an automatic bill credit of $50 to the affected customer. ScottishPowers proposal appears to be reasonable.
Q. Does PacifiCorp currently have a performance target in this area?
A. No, it does not.
CUSTOMER PROGRAMS
Q. Please comment on ScottishPowers commitment to provide additional assistance to customers who have trouble paying their electric bills.
A. The company proposes to double the number of customers assisted by the Low Income Energy Assistance Program and to match customer contributions to State heat assistance programs. ScottishPower also proposes to establish a debt counseling service and increase the companys energy efficiency educational program. All of these commitments will benefit Idaho customers. I commend ScottishPower for identifying areas where it might improve service to a segment of customers that traditionally is less vocal than other customer groups in expressing its concerns in Commission proceedings.
GENERAL DISCUSSION
Q. ScottishPower has indicated it will spend approximately $55 million during the five-year period to implement the new network and customer service standards, including the customer guarantees. It expects this amount to be covered in part by identifying ways to operate more efficiently. Are you concerned that this drive for efficiency could result in a decline in customer service?
A. While that certainly could happen, ScottishPower has consistently maintained that its intent in introducing its standards and guarantees is to improve customer service across a broad range of activities. My impression is that the Idaho service territory is operating at a bare-bones level now. Call centers in Portland and Salt Lake handle with varying levels of success many customer-related functions on a centralized basis.
Q. Are Idaho customers satisfied with the level of service now being provided by PacifiCorp?
A. Research done on behalf of PacifiCorp indicates that Idaho customers are not wholly satisfied with the company. For example, Staff Exhibit No. 107 shows the overall satisfaction of PacifiCorps residential customers by region. Idaho customers are significantly less satisfied than PacifiCorps customers in other states.
Q. You have made a number of recommendations in your testimony, including several suggested improvements to the customer service guarantees. Should aproval of the merger be conditioned on adoption of these recommendations?
A. The Commission should require the customer service guarantees to be tariffed as a condition of approval. My recommendation regarding extending the same $1 per customer penalty provisions that apply to the proposed network performance standards to the two customer service performance standards regarding telephone service answering levels and Commission-referred complaints would be an important enhancement to ScottishPowers package of proposals. The remaining recommendations would improve the proposed customer guarantees. However, I can understand ScottishPowers reluctance to establish stringent standards when it does not fully know what challenges it will face in meeting these commitments after the merger. The customer service standards and guarantees as proposed are an important first step. If nothing else, the standards and guarantees will establish a baseline for measuring performance and improving service to PacifiCorp customers over time.
Q. Does this conclude your testimony?
A. Yes, it does.
PAC-E-99-1 BARKER, B (Di) 1
05/18/99 Staff
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