20040712Kopczynski Rebuttal.pdf

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DAVID J. MEYER
VICE PRESIDENT AND CHIEF COUNSEL FOR L : t UdLIC
REGULATORY AND GOVERNMENTAL AFFAJRgTILITiES COt"HlfSSION
VISTA CORPORATION
O. BOX 3727
1411 EAST MISSION AVENUE
SPOKANE, WASHINGTON 99220-3727
TELEPHONE: [phone]
FACSIMILE: [phone]
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BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF A VISTA CORPORATION FOR THE
AUTHORITY TO INCREASE ITS RATES
AND CHARGES FOR ELECTRIC AND
NATURAL GAS SERVICE TO ELECTRIC AND
NATURAL GAS CUSTOMERS IN THE ST ATEIDAAO
CASE NO. A VU-04-
CASE NO. A VU-04-
REBUTTAL TESTIMONY
DON F. KOPCZYNSKI
FOR A VISTA CORPORATION
(ELECTRIC AND NATURAL GAS)
Please state your name, the name of your employer, your business
address, and current position.
My name is Don F. Kopczynski. I am employed by Avista Corporation at
1411 East Mission Avenue, Spokane, Washington. In the time period since I filed direct
testimony, I have been named Vice-President of Transmission and Distribution Operations.
What is the purpose of your rebuttal testimony?
My testimony will respond to Staffs direct testimony relating to customer
service quality and vegetation management issues.
Please summarize your rebuttal testimony.
Staff Witness Marilyn Parker has identified five areas of concern to Staff
regarding customer service. These include a lack of customer participation in the Winter
Payment Plan the Company timeliness of answering incoming customer calls
disconnection procedures, and the potential for out-of-cycle meter reading. I address each of
these issues in turn.
A vista Utilities has historically been "the hometown utility" with an emphasis on
reliable, high-quality, and low-cost service. It is our firm intention to continue this legacy.
Thus, my response to Ms. Parker s concerns is generally supportive of her positions while
recognizing that several issues are concurrently being reviewed in the Staff-hosted Best
Practices Task Force comprised of Idaho jurisdictional utilities and interested stakeholders.
In regard to vegetation management, the Company reiterates its initial proposal to
increase its tree-trimming expenditures with related cost recovery. An alternative proposal, a
Kopczynski, Di - Reb
A vista Corporation
one-way balancing account, is suggested as a means to avoid any concerns about over-
collection, or a mismatch of future revenue to expense.
Staff Witness Parker, starting at page 11 of her direct testimony, states
that Staff is concerned that no A vista customer in Idaho participated in the Winter
Payment Plan during the last two heating seasons. She states that the Company should
resolve computer programming problems so that customers may participate in this
program while simultaneously receiving protection from disconnection by declaring
eligibility for the Moratorium. What is the Company s response to this concern?
We have undertaken further investigation regarding the Company s computer
capabilities for simultaneously placing customers on the Winter Payment Plan and the Idaho
Moratorium. Our computer system does allow customers to be set up on both. We will train
all customer service representatives by November 1 , 2004.
Any residential customer who declares that he or she is unable to pay in full for utility
service and whose household includes children, elderly or infirm persons will be offered the
opportunity to establish a Winter Payment Plan. If a customer makes a decision to go on the
Winter Payment Plan, the process will be to set up a payment plan with an end date of April
1 st and set up Idaho Moratorium simultaneously. When customers pay the required amount
under their payment plan, it will be in affect until April 1. If a customer is not able to keep
their payment plan, the payment plan will drop and they will continue to be enrolled in the
Idaho Moratorium which will be in effect until March
As noted in Ms. Parker s testimony, A vista is an active participant in the Best
Practices task force and we are committed to developing enhanced customer education in
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A vista Corporation
collaboration with the Staff, other Idaho jurisdictional energy utilities, and other interested
stakeholders.
Are there additional payment issues the Company would like to comment
on?
Yes. Ms. Parker at page 21 , lines 23-24 of her direct testimony, notes that
A vista currently does not have the ability to make payment arrangements on the Company
website. The Company will add to our website the ability to make payment arrangements
within the next few months.
Ms. Parker beginning at page 14 of her testimony, expresses concern
regarding the Company s level of service as measured by the average time to answer
incoming customer calls. What is the Company s response?
Before I discuss Staff s specific suggestions and the Company s response, I
want to provide an overview of how A vista approaches establishing customer service
standards.As stated by Ms. Parker, service standards are generally measured by the
percentage of incoming customers answered in a defined number of seconds.The
Company s internal goal has been set at answering 70% of incoming calls within 60 seconds.
In national regulatory meetings over the past two years , there have been significant
discussions about establishing a higher standard of service.
The Company attempts to balance the cost of meeting service standard goals with
customer satisfaction. The cost of meeting service standards is predominantly labor, or the
number of contact center representatives available to answer calls. Customer satisfaction is
defined by specific service attributes important to our customers to drive positive evaluation
Kopczynski, Di-Reb
A vista Corporation
of the Company s service. The Company measures five such attributes and the importance of
these to customers. The results of Avista s recent customer service
survey are as follows.
Customers Responding
Very or Somewhat Important"
98.4%
98.
97.
96.
91.7%
Attribute
Representative being informed and knowledgeable
Representative providing all of the information needed in one call
Representative handling the call in a friendly, caring manner
Representative meeting needs promptly
Connecting to a representative in one minute or less
These data suggest that knowledgeable representatives who can promptly respond to
customer requests in a courteous manner are what Avista s customers value. These data also
suggest that a response from the Company within 60 seconds on hold is acceptable to
customers. Balancing customer satisfaction results with the cost for service improvement has
historically been Avista s approach to appropriate contact center standards.
In addition, even with the current goals, as stated above, our customer service surveys
indicate that customer satisfaction has remained high. In fact, our most recent overall
customer satisfaction survey results show a satisfied customer rating of 90% in our Idaho and
Washington operating divisions.
In regard to Staff's specific recommendations of moving from a 700/0-
second standard to 800/0-30 seconds standard, what is the Company s response?
In the past 18 months, Avista has added 6.5 full time equivalent (FTE)
positions to the Contact Centers. For the 12 month period ending June 30, 2004 Avista
answered 69.29% of calls in 60 seconds. However, for the month of June 2004, the number
of calls answered within 60 seconds has increased to 74%.
Kopczynski, Di - Reb
A vista Corporation
The Company s analysis shows that an additional nine FTE positions would be
required to answer 80% of incoming customer calls within 30 seconds. Many of these
positions would be part-time due to the need to match call volumes with the appropriate
staffing levels of the contact center. For example, a typical Monday can have about 1500
calls, or 30%, more than other days. This need for flexible staffing means that nine FTE
translates to approximately 13 new employees.
The Company intends to add this additional contact center staff in the next year and
establish 80% of incoming calls answered in 30 seconds as a target. This additional FTE
complement, with a 27.4% allocation to Idaho, would increase expense over that requested in
the Company s Application by $162 735 (or $593 925 on a system basis).We believe it
would be reasonable and appropriate to reflect these additional costs in the Company
revenue requirement in this case.
What is the Company s response to Ms. Parker s recommendation that
the Company significantly reduce the number of abandoned calls per month?
As the Company moves to an 80%-answered-calls-in-30-seconds standard, the
number of customers who hang up before they reach a contact center representative (or
abandoned calls) should be reduced. Ms. Parker notes that the average number of abandoned
calls increased in 2003 over 2002. However when comparing the average number of
abandoned calls to an increasing call volume, abandoned calls in the past five years have
remained relatively steady or decreased as a percentage of call volume. This is shown in the
following chart which illustrates a downward trend in the percentage of abandoned calls.
Kopczynski, Di - Reb
A vista Corporation
Avista Utilities Call Volume and Abandoned % 1998-
2004
1200000
Q) 1000000
800000
600000
400000
200000
1998 1999 2000 2001 2002 2003 2004
(111ru-call Volume -+-Abandoned May)
Ms. Parker observes at page 18 of her testimony that "Staff does not
4 0% 'a Q) C)s::: co0% 0 C'a 0% ~
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1 .0% c( :.
believe this practice (outbound disconnection recorded message) complies with the
spirit of the rule. However, the Best Practices Task Force plans to address the issue
soon of how to improve the disconnection notification process. Both A vista and Staff
will be participating in the discussions.What is Avista s response?
Avista is an active participant in the Best Practices Task Force and looks
forward to examining improvements to this component. As I stated earlier, Avista places
high import on responsive and appropriate customer service levels.
Ms. Parker, at pages 22 and 23 of her testimony, states a concern about
out-of-cycle meter readings. She observes that Staff intends to explore this matter
going forward. What is the Company s perspective on this issue?
The Company does not routinely read meters outside of regular monthly meter
reading cycles. Reading meters as part of a regularly scheduled route takes advantage of
economies of scale; reading individual meters on an as-needed basis creates significant
Kopczynski, Di-Reb
A vista Corporation
upward cost pressure. These costs, in turn, need to be balanced with the benefits to be
achieved by out-of-cycle meter readings.
In 2003 , Avista had 49 000 opens/closes in the Idaho jurisdiction. Approximately 3%
of these changes had the meter read within one day of service changes as part of the regularly
scheduled meter reading route. The average cost of an individually read meter is $18 per trip.
The cost of reading the remaining 47 530 meters (49 000 meters less the 3% picked up by
scheduled routes) would be $855 540.With approximately 109 000 electric Avista
customers in Idaho, out-of-cycle meter reads would result in an additional cost of
approximately $8 per year for every customer.
The Company believes that its bill estimating system is relatively accurate and the
additional cost of moving to individual meter reads for out-of-cycle meter reading is not
warranted.
Do you have other observations regarding Ms. Parker s testimony?
Yes.I appreciate Ms. Parker s recognition of the Company s customer
assistance programs, in particular our Customer Assistance Referral and Evaluation Service
(CARES) program.
Does the Company agree with Staff Witnesses Patricia Harms ' and Kathy
Stockton s adjustment to the Company s pro forma level of vegetation management, or
tree trimming, expense?
, the Company disagrees with the Staff adjustment on tree trimming. The
Company continues to support its request to include an increased level of vegetation
Kopczynski, Di - Reb
A vista Corporation
management expense in its rate request. Company witness Don Falkner elaborates on this
issue and provides an alternative accounting treatment.
We recognize the Staff s concern regarding an increase in expense from that included
in the Company s historic test year. However, for the reasons outlined in my direct testimony
and the recent increased emphasis on transmission reliability, and vegetation management in
particular, we believe the additional funding is especially important at this time. The tree
trimming and danger tree work is important for system reliability. This benefits both
residential and commercial customers in rural and urban communities throughout north
Idaho.
As explained by Mr. Falkner, a one-way balancing account would ensure that any
dollars collected in rates but not expended on vegetation management would be returned to
customers. If the Company were to spend in excess of the amount included in rates, the
Company would absorb the additional costs.
Does this conclude your prefiled rebuttal testimony?
Yes.
Extraordinary costs due to events such as severe weather, however, may cause the Company to seek additional
relief.
Kopczynski, Di - Reb
A vista Corporation