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HomeMy WebLinkAboutStaff Report 353-08C ty Manager’s City of Palo Alto Summary Report TO:HONORABLE CITY COUNCIL FROM:CITY MANAGER DEPARTMENT: UTILITIES DATE:OCTOBER 20, 2008 CMR: 353:08 REPORT TYPE: INFORMATIONAL SUBJECT:2008 STATEWIDE AND PALO ALTO RESIDENTIAL CUSTOMER SATISFACTION SURVEY RESULTS This is an informational report and no Council action is required. SUMMARY This report describes the results of a survey of residents being performed by the California Municipal Utilities Association (CMUA) in order to determine levels of customer satisfaction with utility services and programs. BACKGROUND A sample of Palo Alto residential customers were surveyed by telephone by RKS Research and Consulting as part of a statewide customer satisfaction survey conducted by the CMUA. This is the fourth time Palo Alto has participated in this survey, with its initial benchmark study first done in 2002 and updated every other year. The project goal was to obtain an updated measurement of customer satisfaction with California municipal utilities in general. The City of Palo Alto Utilities (CPAU) has opted to extend this survey to an additional "over sample" of 150 of its residential customers in order to gain Palo Alto-specific results for comparison against both the statewide results as well as its own results in 2006. The statewide CMUA survey is based on 681 telephone interviews conducted among residential customers throughout California. Statewide interviews were distributed as follows: 577 interviews conducted among residential customers served by municipal utilities (302 in Southern California, 275 in Northern California) 104 interviews conducted among customers served by California investor-owned utilities. CMR: 353:08 Page 1 of 4 The CPAU survey examines residential customers’ attitudes and opinions on a range of subjects including electricity as well as inquiries into energy conservation and green energy programs. CPAU results are summarized in this report along with comparative results from the CMUA 2008 Statewide Study. CPAU’s results are also compared with its own performance in 2006 and earlier, where applicable. All findings are weighted to assure accurate trending. The RKS Residential Value Model is a measurement tool to monitor utility performance in areas that influence customer satisfaction. By aggregating customer response from a variety of questions, the Residential Value Model yields scores that help to understand the utility’s individual strengths and weaknesses and their effect on residential customers’ value perceptions. The Value Rating is particularly important, as it summarizes residential customers’ opinions regarding utility performance on several measures. CPAU’s 2008 Value Rating comes in with similar results to its 2006 score, and significantly above the average for all municipal utilities across the state. The results of the 2008 survey indicate that CPAU has a very positive relationship with its residential customers. They express high levels of satisfaction and trust in their utility, and award it high scores for working hard to satisfy its customers, being progressive and cutting edge, and involved in the community. The finding that many,ifnot most, of CPAU’s scores are stable compared with 2006 is a plus, in view of the fact that CPAU is a four-service utility, and that commodity and fuel prices have increased dramatically over the past year. This increase shows that in customers’ minds, CPAU has maintained its edge in spite of a very difficult business environment. There are some areas suggested by this research that should be highlighted: CPAU residential customers appear very engaged in environmental issues and recognize their utility as having developed a strong reputation for its environmental efforts. CPAU customers award it high ratings for its concern for the environment and are more likely to believe their utility is "very involved" in efforts to control greenhouse gas emissions than other municipal utility customers. Another key finding that CPAU customers are significantly-more likely to view a 20% rate increase to fund global warming cleanup as "reasonable" than municipal utility customers statewide. Additionally, awareness of CPAU’s green energy option is far higher than the average for other municipal utilities across the state. This research Confirms that customers appear to value CPAU’s efforts, but the challenge will be in harnessing these assessments to influence others within Palo Alto about the importance of these efforts. Awareness of CPAU’s green energy option has nearly doubled, but 2008 results find this awareness is accompanied by declines in reported, participation. Three-quarters of all residential customers are aware of CPAU~s green energy option that generates electricity from environmentally friendly sources. Despite lower reported participation rate in this random sample for this survey, PAG’s participation rate remains high. Customers’ perceptions of CPAU’s power reliability show some declines since 2006. CPAU residential customers are more likely to report an outage or interruption than they CMR: 353:08 Page 2 of 4 did two years ago; the average number of power interruptions is up, as well. CPAU customers continue to give it high marks for working to keep outages down, but do tend to downgrade the utility’s efforts to inform customers about when power would be restored after an outage. CPAU is praised by residential customers for improved effectiveness of communications aimed at customers. This 2008 research finds CPAU residential customers’ use of and assessments about the website as stable, However, customers also indicate they would like to see enhanced web-base communication options and capabilities. CPAU customers’ energy efficiency involvement suggests more can be done. Notwithstanding their high familiarity with and concern about global warming, this concern is not marked by their actions to conserve energy. They are less interested than customers of other publicly-owned or investor-owned utilities throughout California in the benefits of smart meters and are much less likely to be putting a significant effort into saving energy at home. This result emphasizes the need to find out how to convince affluent customers that energy efficiency remains an important goal one that requires sustained commitment in order to be effective. Customer satisfaction is strong and remains well above the standard for state and northern California municipal utilities. This conclusion is enhanced by the finding that the price/value assessments of customers show some improvement, despite rising rates and uncertain external economic conditions. CPAU is assessed quite positively by its residential customers in a difficult business environment. RESOURCE IMPACT The survey costs $10,500 for Palo Alto to over-sample. The statewide comparison survey is paid for by the Northern California Power Agency and shared with member agencies. A small amount of staff time was required to review survey questions before the survey was completed and to review results at the end. POLICY IMPLICATIONS The survey findings provide valuable insights into residential customers’ perception of value for CPAU services and point out areas for improvements in the future. ENVIRONMENTAL REVIEW This informational report does not meet the definition of a project for the purpose of the California Environmental Quality Act (CEQA) pursuant to Section 21065 of the California Public Resources Code, thus no environmental assessment is required. CMR: 353:08 Page 3 of 4 ATTACHMENT A: RKS 2008 Utilities Residential Customer Survey - Report PREPARED BY: DEPARTMENT APPROVAL: CITY MANAGER APPROVAL: JOYCE KINNEAR Manager, Utility Marketing Services TOM AUZENNE Assistant Director, Customer Support Services CMR: 353:08 Page 4 of 4 RESEARCH & CONSULTING CITY OF PALO ALTO UTILITIES 2008 RESIDENTIAL CUSTOMER SURVEY COVERING ELECTRICITY REPORT OF FINDINGS This report summarizes and highlights the City of Palo Alto Utilities (CPAU) 2008 residential customer satisfaction survey conducted by RKS Research & Consulting. This is the fourth time CPAU has conducted this survey, with its initial benchmark study done in 2002, also in conjunction with the CMUA Statewide Survey of Residential Customers. Prior to that, the most recent CPAU residential survey was conducted in Fall, 2006. This 2008 CPAU customer satisfaction update is an oversample of CMUA’s 2008 Statewide Survey of Residential Customers Served by California Municipal Utilities - Covering Electricity. Interviews for both the CMUA statewide survey and the Palo Alto survey were conducted by telephone. The Statewide survey was conducted from May 8-28, 2008. Interviewing for the Palo Alto oversample took place between July 7-20, 2008. Both the Statewide and Palo Alto surveys were designed and implemented by RKS Research & Consulting. The City of Palo Alto Utilities oversample is based on a cross section of 150 telephone interviews drawn from a sample provided by CPAU. The statewide CMUA survey is based on. 681 telephone interviews conducted among residential customers throughout California. Statewide interviews were distributed as follows: 577 interviews conducted among residential customers served by municipal utilities (302 in Southern California, 275 in Northern California) 104 interviews conducted among customers served by California investor-owned utilities The CPAU survey addresses residential customers’ attitudes and opinions on a range of subjects including electricity as well as inquiries into energy conservation and green energy programs. CPAU results are summarized in this report along with comparative results from the CMUA 2008 Statewide Study. CPAU’s results are also compared with its own performance in 2006 and earlier where applicable. All findings are weighted to assure accurate trending. Attached to this document is a questionnaire that shows results on a question-by- question basis. RKS will prOvide an on-site presentation of research results in the Fall of 2008. 1 ©RKS Research & Consulting - All Rights Reserved, 2008. RESEARCH & CONSULTING CITY OF PALO ALTO UTILITIES 2008 RESIDENTIAL CUSTOMER SURVEY COVERING ELECTRICITY REPORT OF FINDINGS RKS Residential Value Model The RKS Residential Value Model is a measurement tool to monitor utility performance in areas that influence customer satisfaction. By aggregating customer response from a variety of questions, the Residential Value Model yields scores that help to understand the utility’s individual strengths and weaknesses and their effect on residential customers’ value perceptions. The Value Rating is particularly important, as it summarizes residential customers’ opinions regarding utility performance on several measures. CPAU’s 2008 Value Rating comes in on par with its 2006 score, and significantly above the average for all municipal utilities across the state. Looking into the components, CPAU’s scores have remained fairly stable over the past two years, showing a slight improvement in Price and a slight decline in Customer Focus. CPAU stands out among NCPA utilities on scores for Affect and Expectation Fulfillment, scoring significantly above norm. It also scores above the statewide norm on all factors, with particular strength on Price, Bill Qualities, Affect and Expectation Fulfillment. Value Price Affect Customer Focus Expectation Fulfillment Bill Qualities Power Delivery *Significantly higher than Total CA Muni at the 95% level of confidence 0^Significantly higher that Total Muni and NCPA at the 95 ~ level of confidence ©RKS Research & Consulting - All Rights Reserved, 2008. RESEARCH & CONSULTING CITY OF PALO AL TO UTILITIES 2008 RESIDENTIAL CUSTOMER SURVEY COVERING ELECTRICITY REPORT OF FINDINGS Overall Satisfaction Another way to measure satisfaction is by asking customers to assess their overall satisfaction with their utility - measure based on a single, simple question. On this measure, CPAU residential customers award their utility an average score of 8.7, significantly higher than the average for California municipal utilities (8.0), and consistent with its own score in 2006 (8.6): The number of CPAU customers saying they are "very satisfied" is 79% in this 2008 survey, a non significant decline from the 83% answering this way in 2006. [Qla] 76 8.2 *Significantly higher than Total Muni at the 95% level of confidence 70 8.0 About three-fifths of CPAU residential customers (61%)say their utility "exceeds expectations;" a similar proportion said the same in 2006 (65%)~ CPAU receives mean scores on this dimension that are significantly higher than other municipal utilities in California (7.4). [Qlb] CPAU 2OO8 CPAU 2006 . NCPA 2OO8 Total Muni 2008 Total IOU 2008 61 65 56 57 51 Rate 8, 9 or 10 on a 0 (falls short) to 10 (exceeds expectations) scale *Significantly higher than Total Muni at tt~e 95% level of confidence 7.9" 7.8 7.2 7.4 7.2 3 ©RKS Research & Consulting - All R~ghts Reserved, 2008. RESEARCH & CONSULTING CITY OF PALO ALTO UTILITIES 2008 RESIDENTIAL CUSTOMER S UR VEY COVERING ELECTRICITY REPORT OF FINDINGS Reliability Fewer CPAU customers were outage-free - 51% - compared to 64% responding this way in 2006. Among CPAU customers who had an outage, they report about the same number of outages as in the past, 0.5 in 2006 vs. 0.8 now. Compared to statewide norms, CPAU customers are more likely to be outage-free compared to California municipal utility residential customers statewide (47%); additionally, CPAU customers experience fewer outages than others across the state or among NCPA utilities (CPAU 0.8, Total CA Muni 1.4, NCPA 1.4). Power interruptions showed a marked increase in incidence. One in three (33%) of CPAU residential customers recall no interruptions in 2008, down from 54% in 2006. CPAU customers also report more interruptions than in the past (2008: 2.1, 2006: 0.9), though less than their regional or statewide counterparts: [Q2a-b] Zero outages (%) Average outages Zero interruptions (%) Average interruptions 51; 0.8^ 64 0.5 59 1.4 47 ¯ 33~54 42 41 2.1 0.9 3.0 . 3.2 ~Significantly lower than CPAU 2006 at the 95% level of confidence ^Significantly higher than CPAU 2006 at the 95% level of confidence CPAU residential customers give their utility good marks on most attributes related to power reliability, at levels that are on par with its own past performance and state and regional (NCPA) norms. CPAU customers givetheir utility highest ratings for "working hard to keep down the number of outages" (8.7) and restoring service after an outage (8.5). Customers are more critical when asked about.CPAU’s performance on informing them when power will be restored after an outage. They give CPAU significantly lower ratings on this measure than two years ago resulting in an average score that falls below state and NCPA norms. (CPAU 2008 6.2, CPAU 2006 7.2, NCPA 6.9, Total CA Muni 6.4). [Q2c.a-d] 4 ©RKS Research & Consulting - All Rights Reserved, 2008. RESEARCH & CONSULTING CITY OF PALO ALTO UTILITIES 2008 RESIDENTIAL C US TOMER S UR VE Y COVERING ELECTRICITY REPORT OF FINDINGS Quickly restoring service after an outage 8.5*8.6 8.3 8.0 Maintaining poles, wires and other 8.3 8.4 8.5 8.3equipment Working hard to keep down the number 8.7 9.0 8.6 8.5 of outages ’ Informing customers when power will be 6.2~ 7.2 6.9 6.4restored after an outage $Significantly lower than CPAU 2006 at the 95% level of confidence *Significantly higher than Total Muni at the 95% level of confidence Price and Value When asked whether "what you receive is worth the price you pay," 64% of CPAU customers award their utility an excellentrating - a similar proportion (63%) responded this way two years ago. Viewed from the perspective of mean rating of 8.0, CPAU customers are much more positive about receiving their money’s worth compared to statewide municipal customers as a whole (7.3) or among customers of NCPA-member utilities (7.6). [Q7e] CPAU 2OO8 64 CPAU. 2OO6 63 NCPA 2OO8 64 Total Muni 2008 57 Total IOU 2008 55 8.0 7.6 7.3 7.4 Percent saying 8, 9 or 10 on a 0 (poor) to 10 (excellent) scale *Significantly higher than Total Muni and IOU at the 95% level of confidence 5 ©RKS Research & Consulting All Rights Reserved, 2008, RESEARCH & CONSULTING CITY OF PALO ALTO UTILITIES 2008 RESIDENTIAL CUSTOMER SURVEY COVERING ELECTRICITY REPORT OF FINDINGS In another question probing value, CPAU customers were asked how strongly they agree with the statement that "when I pay my electric bill, I always feel I get my money’s worth." CPAU customers respond much as they did in 2006, giving CPAU a mean score of 7.5 in 2008 compared to 7.4 in 2006. However, this score betters NCPA (7.1) norms and scores significantly above statewide municipal utility norms as well (6.7): [Q7[] CPAU 2OO8 56 CPAU 2OO6 52 NCPA 2OO8 5O Total Muni 2008 51 Total IOU 2008 51 7.5* 7.4 7.1 6.7 6.9 Percent saying 8, 9 or 10 on a 0 (strongly disagree) so 10 (strongly agree) scale *Significantly higher than Total Muni at the 95% level of confidence CPAU customers’ assessment of the price they pay has changed slightly over the past two years. Just under one in three (29%) say the price they pay for electricity is high, falling from 33% who said the same in 2006. Based on mean scores, CPAU customers are significantly less likely to view their electricity prices as."high" compared to California municipal utility customers as a whole or customers of NCPA-member utilities (CPAU 6.0, Total Muni 7.1, NCPA 6.4). [Q7c] CPAU 2OO8 CPAU 2006 NCPA 2OO8 Total Muni 2008 Total IOU 2008 Percent saying 8, 9 or 10 on a 0 (price is low 29 33 40 49 42 to 10 (price is high) scale 6.0~ 6.3 6.4 7.1 6.9 iSignificantly lower than Total Muni and IOU at the 95% level of confidence 6 aRKS Research & Consulting - All Rights Reserved, 2008. RESEARCH & CONSULTING CITY OF PALO AL TO UTILITIES 2008 RESIDENTIAL C US TOMER S UR VE Y COVERING ELECTRICITY REPORT OF FINDINGS Overall, customer perceptions about CPAU’s efforts to keep prices down are consistent with the past. On average, CPAU customers give it a rating of 7.0, compared to the NCPA average of 7.1. Still, CPAU’s score beats the statewide average for municipal utilities by a noticeable margin. [Q7d] CPAU 2OO8 CPAU 2006 NCPA 2OO8 Total Muni 2008 Total IOU 2008 35t 38 49 41 31 7.0 7.0 7.1 6.5 6.2 Percent saying 8, 9 or 10 on a 0 (does nor work hard at all) to 10 (works very hard) scale iSignificantly lower than NCPA at the 95% level of confidence Billing CPAU customers show high levels of confidence in the information content of the bills they receive from their utility. They award CPAU high scores across the board, awarding scores typical of other NCPA utilities and significantly higher than the state norm on all aspects of billing. [Q7g] Providing bills that are easy to understand 8.6*8.8 8.7 8.0 Providing bills that accurately 8.5*8.7 8.5 8.0reflect HH electricity usage Providing bills that contain the 8.6* 8.3 8.6 8.1information you need Rate 8, 9 or 10 on a 0 (poor) to 10 (excellent) scale *Significantly higher than Total Muni at the 95% level of confidence 7 ©RKS Research & Consulting - All Rights Reserved, 2008. RESEARCH & CONSULTING CITY OF PALO ALTO UTILITIES 2008 RESIDENTIAL CUSTOMER S UR VEY COVERING ELECTRICITY REPORT OF FINDINGS Smart Meters A new series of questions asked customers to assess the importance of five features that will be offered through "smart" electric meters. [Q7h.1.5] Receive discounts for use during off-peak periods and charge more for on-peak use 6.7 6.1 7.O Receive discounts for voluntarily allowing your utility to make small adjustments to your thermostat during 5.2~4.6 6.2 high peak usage times Visiting CPAU’s website for a table and chart of your 5.0~5.1 5.7hourly use of electricity, by the hour last month Visiting CPAU’s website to see how much electricity 4.7 4.7 5.4you’re using at that very instant Selecting the time of month your bill is due 4.5* 5.5 6.-4 *Significantly lower than Total Muni and NCPA at the 95°£ level of confidence ~Significantly lower than Total Muni at the 95% level of confidence CPAU customers show a lower level of interest in all of the five smart meter benefits tested compared to their counterparts around the state. Generally, CPAU customers are most interested in features that will help them take active advantage of discounts; they are least interested in informational features available to them on the web. The ability to select the timing of their bill is significantly much less important to CPAU customers than statewide customers at large. 8 ~©RKS Research & Consulting - All Rights Reserved, 2008. RESEARCH & CONSULTING CITY OF PALO ALTO UTILITIES 2008 RESIDENTIAL CUSTOMER SURVEY COVERING ELECTRICITY REPORT OF FINDINGS Image CPAU’s image ratings also reflect residential customers’ positive opinion of their utility. Asked about their level of trust in CPAU, residential customers award their utility an average score 8.6 on a 0-10-point scale, slightly above its score in 2006 (8.3) and significantly above the average for NCPA-member utilities and munis around the state. When questioned about their overall feelings about CPAU, customers are also positive. They give it an average score of 8.5, significantly above the NCPA (7.9) and state municipal utilities (7.9). [Q3a-b] ’-~_ .-C 2008 Completely trust 8.6*8.3 Overall feelings very positive 8.5~8.5 Rate 8, 9 or 10 on a 0 to 10 scale *Significantly higher than Total Muni and NCPA at the 95% level of confidence -NCPA-1 :Total Muni 7.9 /8.1 7.9 ]7.9 When it comes to specific aspects of image, CPAU generally scores on par or slightly higher than its NCPA-member and statewide municipal utility peers. Customers award CPAU extra kudos for its concern for the environment, giving it significantly higher ratings than two years ago and scores that are well above the average for NCPA- member utilities and for statewide municipal utilities. [Q4a-i] Working hard to satisfy customers like you 8.1 8.4 8.1 7.9 Being involved in local community 7.8 8.1 7.9 7.5 Concern for the environment 8.6^8.2 8.2 7.8 Being a leader in the industry 7:8 7.9 7.4 7.9 Really trying to save customers money with 7.7 NA 7.7 7.5practical energy conservation information Progressive and cutting edge 7.9 7.9 7.4 7.5 Mean rating on a 0 (poor) to 10 (excellent) scale ^Significantly higher than CPAU 2006 and Total Muni at the 95% level of confidence 9 ©RKS Research & Consulting - All Rights Reserved, 2008, RESEARCH & CONSULTING CITY OF PALO ALTO UTILITIES 2008 RESIDENTIAL CUSTOMER SURVEY COVERING ELECTRICITY REPORT OF FINDINGS Contact Experience Just 15% of residential customers contacted CPAU in 2008, a significant decrease over the reading done two years ago when 24% contacted CPAU. CPAIFs 2008 contact rates are also much lower than the average for NCPA utilities (26%) and statewide municipal utilities (18%). [Q5a] For the most part, Palo Alto customers’ method of contact are typical of other municipal utility customers around the state. The largest proportion called (9%) CPAU; 5% wrote an e-mail and 3% visited the utility in person. [Q5a] But while the method is the same, Palo Alto customers’ contact preferences are a little different than other municipal utility customers. While the largest proportion prefer to do business by phone (CPAU 49%, Total Muni 59%), many CPAU customers prefer electronic communication - much more so than other residential customers. Nineteen percent (19%) prefer e-mail, while 21% prefer communication through the utility website. Only 5% prefer a personal visit to the utility. [Q5b] By telephone In person By email Through their website All the same 49 5~ 19~ 21" 4 51 59 24 17 8 10 11 10 3 1 Mean rating on a 0 (poor) to 10 (excellent) scale $Significantly lower than NCPA and Total Muni at the 95% level of confidence ^Significantly higher than NCPA at the 95% level of confidence *Significantly higher than Total Muni and NCPA at the 95% level of confidence When CPAU customers called their utility, most (85%) spoke to a customer service representative, either initially or after going through the voice response unit. In 2006, 95% spoke to a customer service rep. Only 8% of CPAU customers communicated entirely through voicemail - a slight increase over 2006 (5%), but well under the average for state municipal utilities (15%) and NCPA utilities (13%). [Q5c] lO ©RKS Research & Consulting - All Rights Reserved, 2008. RESEARCH & CONSULTING CITY OF PAL O ALTO UTILITIES 2008 RESIDENTIAL CUSTOMER S UR VEY COVERING ELECTRICITY REPORT OF FINDINGS Website Services CPAU residential customers are much like other California municipal utility customers in terms of their visits to their utility’s website - about 33% of CPAU customers have visited their utility’s website compared to 26% of NCPA and 31% of statewide municipal utility customers. [Q6a] CPAU customers’ overall perceptions of its website are positive. With an average rating of 7.2, CPAU’s website ratings are on par with that for other municipal utility websites (7.0) in California, though a bit below the NCPA average (7.8). [Q6b] Asked about specific aspects of the website, CPAU customers give it scores just slightly above 2006 on all but one measure (usefulness of information available), though it far surpasses the municipal utility norm on this measure. [Q6b.a-d] Usefulness of information available Ability to answer questions/solve problems Amt. of time needed to find answer to question Ease of navigating around website Overall rating of website Average rating on a 0 (poor) to 10 excellent)scale Base: Visited the website at least once in the past 12 months (n=55) 7.4 7.5 7.9 6.6 7.4 6.9 7.9 6.8 6.9 6.7 7.3 6,7 7~0 6.9 7.6 7.0 7.2 7.0 7.8 7.0 11 ’-©RKS :Research & Consulting - All Rights Reserved, 2008. RESEARCH & CONSULTING CITY OF PALO AL TO UTILITIES 2008 RESIDENTIAL C US TOMER S UR VE Y COVERING ELECTRICITY REPORT OF FINDINGS Communications CPAU residential customers show increasingly positive sentiments when asked about the effectiveness of CPAU communications. Just over half (59%) label these communications "very effective", up a solid 10 points from 2006 and reaching a level which is close to the statewide municipal utility and NCPA average. [Q~la] CPAU 2008 59 CPAU 2OO6 48 NCPA 2OO8 62 Total Muni 2008 61 Total IOU 2008 55 7.8 7.3 7.8 7.6 7.4 Almost three out of four CPAU residential customers (73%) recall seeing, reading or hearing public communications or advertising from CPAU. This is a significant increase over 2006 when just 43% said the same. CPAU customers’ recall of communications is also much higher than the average among state (49%) and regional municipal utility customers (67%). [Q11b] Global Warming and Climate Change CPAU customers express much higher levels of familiarity with global warming than their municipal utility peers around Northern California and the state. Three out of four CPAU customers (75%) say they are very familiar with the issue, compared to 57% among NCPA utilities and 59% for municipal utilities statewide. CPAU customer familiarity shows a significant increase from 2006, when 61% said they were very familiar with global warming. [Q12a] About three-quarters of CPAU customers (73%) express deep concern about the global warming issue, up slightly since 2006. CPAU customers express far more concern than their regional (NCPA) counterparts (50%), and at levels above statewide customers as well (64%). [Q12b] 12 ©RKS Research & Consulting - All Rights Reserved, 2008. RESEARCH & CONSULTING CITY OF PALO ALTO UTILITIES 2008 RESIDENTIAL C US TOMER S UR VE Y COVERING ELECTRICITY REPORT OF FINDINGS % Very familiar Mean rating %Very concerned Mean rating 73^ 8.1^ 61 7.7 70 8.2 57 7.6 50 ’6.4 59 7.5 64 7.7 *Significantly higher than CPAU 2006, NCPA and Total Muni at the 95% level of confidence ^Significantly higher than NCPA at the 95% level of confidence When asked directly about their utility’s involvement in controlling greenhouse gas emissions, 30% of CPAU residential customers believe their utility has been very involved, and 32% believe CPAU has been fairly involved for a total of 62% expressing some level of involvement. But while only 2% think CPAU has not been involved, a large group (34%) is not sure. [Q12c] Very involved Fairly involved Not too involved Not at all involved Not sure 30* 32 2 2 34 22 31 5 3 40 *Significantly higher than Total CA Muni at the 95% level of confidence 20 27 10 8 35 Belief that their utility is "very involved" is significantly higher among CPAU ’ customers compared with statewide norms. 13 ©RKS Research & Consulting - All Rights Reserved; 200K~ .... RESEARCH & CONSULTING CITY OF PALO ALTO UTILITIES 2008 RESIDENTIAL CUSTOMER SURVEY COVERING ELECTRICITY REPORT OF FINDINGS A new question was added to this series testing the amount of electricity rate increase that customers would consider "reasonable" to fund solutions to global warming and climate change. All customers were asked: "As you know, California state mandates require all customers in the state to pay for solutions to global warming and climate change through their electric bills. If your rate for electricity increased by 20%, do you think that is a reasonable or not reasonable amount to help fund solutions to global warming and climate change?" Customers who responded "reasonable" at the 20% level were not asked further questions in this series. Those that responded "not reasonable" at the 20% increase level were asked the same question at steadily reduced amounts - increased by 15%, increased by 10%, increased by 5% and increased by 3%. The results show that a much higher proportion of CPAU residential customers view higher end rate increases as "reasonable" when it comes to funding solutions to global warming and climate change through the electricity bill. More than one third (37%) view a 20% increase as reasonable while 23% of statewide customers feel the same. At 10%, more than two-thirds (69%) of CPAU customers call this "reasonable" compared with 42% of municipal utility customers statewide responding this way. Q12d.a-e] 20% increase 15% increase 10% increase 5% increase 3% increase 37* 12 20 12 5 37 49 69 81 86 23 4 15 16 11 23 27 42 58 69 *Significantly higher than Total Muni at the 95% level of confidence 14 ©RKS Research & Consulting-~ All R~ights Rese~Ved~ 2008. RESEARCH & CONSULTING CITY OF PALO AL TO UTILITIES 2008 RESIDENTIAL CUSTOMER SURVEY COVERING ELECTRICITY REPORT OF FINDINGS Green Energy Awareness of CPAU’s green energy option is extremely high; three out of four customers are aware of the option - more than double the regional and statewide regional municipal averages (NCPA 34%, Total Muni 30%). [Q8a] CPAU 2OO8 3O CPAU 2OO6 47 NCPA 2OO8 33 Total Muni 2008 39 Total IOU 2008 39 TSignificantly higher than Total Muni and NCPA at the 95% level of confidence 75T 69 34 30 32 While awareness in CPAU’s green energy option has increased, the proportion of aware customers who are participating in the program is down from two years ago. Just 30% of those aware say they are participating in CPAU’s green energy option compared to 47% responding this way in 2006. In comparison, regional and statewide participation is slightly higher (NCPA 33%, Total Muni 39%). [Q8b] Given a choice of installing solar energy or implementing an energy efficiency program, 37% of CPAU residential customers would choose solar electric, while 41% would prefer to implement’an energy efficiency program. A few (3%) volunteered they would do both, while 19% were not sure. Compared to municipal customers statewide, CPAU customers are less interested in solar electric (CPAU 37%, Total Muni 47%) and more interested in energy efficiency (CPAU 41%, Total Muni 24%). [Q8d] Energy Efficiency A new question opened the series on energy efficiency and asked CPAU residential customers to keep in mind what they have done in their homes to save energy and use it wisely, and to summarize these efforts along a 0-10 spectrum, where 0 means "they have not done very much at all" and 10 means "they are doing all they can." [Q9a] 15 ©RKS Research & Consulting - All Rights Reserved, 2008~ RESEARCH & CONSULTING CITY OF PALO ALTO UTILITIES 2008 RESIDENTIAL C US TOMER S UR VE Y COVERING ELECTRICITY REPORT OF FINDINGS Recognizing this is a "rate yourself question," in response, this research finds that just one in three (33%) CPAU residential customers saying they are doing a great deal - either 8, 9 or 10 on the 0-10 scale: Doing a great deal*331 47 61 Making some effort^36 26 18 Could do a lot more#29 25 19 Not sure 2 2 2 Average 6.5~7.0 7.8 *Percent responding 8, 9 or 10 on a 0 (could do a lot more) to 10 (doing all I can) scale ^Percent responding 6 or 7 on a 0 (could do a lot more) to 10 (doing all I can) scale #Percent responding 0, 1, 2, 3, 4 or 5 on a 0 (could do a lot more) co 10 (doing allI can) scale $Significantly lower than Total Muni and NCPA at the 95% level of confidence The table above shows that CPAU’s 33% - in comparison with municipal utilities statewide suggests that CPAU customers by their own descriptions are far less actively engaged in energy conservation than other residential customers around northern California and the state. This is also reflected in the mean- 6.5 for CPAU vs. 7.0 for NCPA customers and 7.8 for municipal utility customers statewide. Another way to obtain customers’ assessments of their own EE efforts was to read them four statements or descriptions and ask which one applies to or fits them: 1. We have made a commitment to save energy and are working very hard at it. 2.We are looking at all of the ways we use energy in our home and figuring out how to save it and to use it wisely. 3.We are still gathering information on ways we can save energy and to use it wisely in our home. 4. We really haven’t given much thought to saving energy in our home. 16 ©RKS Research & Consulting- All Rights Reserved, 2008. RESEARCH & CONSULTING CITY OF PALO ALTO UTILITIES 2008 RESIDENTIAL CUSTOMER SURVEY COVERING ELECTRICITY REPORT OF FINDINGS Statement #1 describes people who have actually made a commitment and are actively doing something about it - the most committed. Statement #2 describes people who seem committed and are trying to put a plan in place, although¯ they may not be doing much now. Statement #3 refers to those with good intentions but who are still in the "studying it" phase and are not yet doing anything. Statement #4 describes those for whom energy efficiency is nowhere on their radar. When divided up in this manner, this is how CPAU residential customers respond: [Q9b] We made a commitment to save energy and work very hard at it We are looking at all the ways we use energy in our home andfiguring out how to save it and use it wisely 43 We are still gathering information on ways we can save energy and use it 19 wisely in our home We really haven’t given much thought 11to saving energy in our home $Significantly lower than Total Multi at the 95% level of confidence 33 43 18 35 5 8 20 Much fewer express a strong commitment to energy conservation (25%) compared to 35% statewide. On a positive note, 43% say they are looking at ways to save energy, well above the state average of 36%. The majority (73%) say the benefits they’ve realized from their energy saving actions are about what they expected. About 8% are seeing more than they expected while 14% are seeing fewer benefits than they expected. [Q9c] 17 ©RKS Research & Consulting - All Rights Rdserved, 2008. ¯ RESEARCH & CONSULTING CITY OF PALO ALTO UTILITIES 2008 RESIDENTIAL CUSTOMER SURVEY COVERING ELECTRICITY REPORT OF FINDINGS It is noteworthy that a quarter of CPAU residential customers describe themselves as actively working hard at EE. Additionally, two in five CPAU residential customers say they are in the midst of putting an EE plan in place. This suggests that the potential for further progress on EE can be viewed from two perspectives. First, it should be noted that about one in five CPAU customers are still subject to influence regarding EE. ¯19% of CPAU customers - by their own admission - have done little (we are studying it) or nothing with regard to EE. o Just under half (43% of CPAU customers) are in the midst of putting plans in place and apparently can still be influenced regarding EE. All customers, whether they are actively working to save energy in their homes and use it wisely or not, were read a list of obstacles and were asked the extent to which each one stands in the way of their adopting EE in their homes. Cost (40%) is by far, the biggest obstacle to CPAU customers. Reservations about whether the rewards will be worth the effort are an obstacle to some (21%); distrust of contractors is also an issue (19%). Few (11%) are confused by utility conservation programs or don’t know about different ways to save energy (7%). [9d.1-6] Too costly 40 40 38 Not convinced the rewards will be worth the effort 21 17 24 Don’t trust contractors to give honest advice 19~20 33 Too much disruption to our household/lifestyle 15 10 15 Can’t figure out which utility conservation programs 1 lS 13 22apply to me Don’t know enough about different ways to save energy 7~8 19 $Significantly lower than Total Muni at the 95% level of confidence 18 ©RKS Research & Coiisulting - All Rightg Reserved, 2008. RESEARCH & CONSULTING CITY OF PALO ALTO UTILITIES 2008 RESIDENTIAL CUSTOMER SURVEY COVERING ELECTRICITY REPORT OF FINDINGS Asked about their trust in various sources to provide honest, unbiased advice and assistance to help save energy and use it wisely, CPAU residential customers have, by far, the greatest trust in CPAU itself as a resource (7.6). CPAU customers are significantly more likely to look to city government (6.8) and interest groups such as Sierra Club (6.3) than their state or regional peers. [Q9e.1-5] Palo Alto Utilities City government Interest groups such as Sierra Club Lighting contractors Air conditioning contractors *Significantly higher than Total Muni at the 95% level of confidence $Significantly lower than NCPA at the 95% level of confidence Compared to other state municipal utility customers, CPAU customers are more likely to look for an Energy Star appliance when buying an appliance. About 73% of CPAU customers say they always look for an Energy Star appliance when buying an appliance, typical of NCPA customers (74%), but significantly above the statewide average of 67%. [Q9f] 19 ©RKS Research & Consulting - All Rights Reserved, 2008. RESEARCH & CONSULTING CITY OF PALO ALTO UTILITIES 2008 RESIDENTIAL CUSTOMER SURVEY COVERING ELECTRICITY REPORT OF FINDINGS Utility Preference Given a choice of the type of utility they would like to have serve them, the vast majority (80%) continue to prefer municipal utilities. CPAU customers show a much stronger preference for municipal utilities than their counterparts across the region or the state (CPAU 80%, NCPA 66%, Total Muni 66%). CPAU customers’ interest in investor-owned utilities is typical of other municipal utility customers statewide. [QlO] Community-owned municipal utility Investor-owned Neither Not sure 80* 9 1 i0~ .66 66 12 10 3 3 19 21 *Significantly higher than Total Muni at the 95% level of confidence $Significantly lower than NCPA and Total Muni at the 95% level of confidence Summary and Conclusions The results of the 2008 survey indicate that CPAU has a very positive relationship with its residential customers. They express high levels of satisfaction and trust in their utility, and award it high scores for working hard to satisfy its customers, being progressive and cutting edge, and its involvement in the community. The finding that many, if not most,of CPAU’s scores are stable compared with 2006 is really a plus: in view of the fact that CPAU is a four-service utility, and that commodity and fuel prices have increased dramatically over the past year, points to the conclusion that in customers’ minds, CPAU has maintained its edge in spite of a very difficult business environment. 2O ©RKS Research & Consulting - All Rights Reserved, 2008. RESEARCH & CONSULTING CITY OF PAL O ALTO UTILITIES 2008 RESIDENTIAL CUSTOMER SURVEY COVERING ELECTRICITY REPORT OF FINDINGS There are some areas suggested by this research that RKS believes should be highlighted by CPAU for review for future improvement: CPAU residential customers appear very engaged in environmental issues and recognize their utility as having developed a strong reputation for its environmental efforts. CPAU customers award it high ratings for its concern for the environment and are more likely to believe their utility is "very involved" in efforts to control greenhouse gas emissions than other municipal utility customers. Another key finding - that CPAU customers are significantly more likely to view a 20% rate increase to fund global warming cleanup as. "reasonable" than municipal utility customers statewide. Additionally, awareness of CPAU’s green energy option is far higher than the average for other municipal utilities across the state. This research confirms that customers appear to value CPAU’s efforts, but the challenge will be in harnessing these assessments to influence others within Palo Alto about the importance of these efforts. Awareness of CPAU’s green energy option has nearly doubled, but 2008 results find this accompanied by declines in participation. A whopping three-quarters of all residential customers are aware of CPAU’s green energy option that generates electricity from environmentally friendly sources. In light of CPAU customers’ strong commitment to the environment - as reflected in responses co the global warming question - it is surprising that participation in CPAU’s green energy option shows declines. Other oversample surveys showed that there was some confusion among customers answering this question. Whether in CPAU’s case this finding reflects customer confusion or reality is something important to determine: If the former (customer confusion), then RKS must work to ensure that these questions are made more precise and understandable in future surveys. If the latter (the decline in customer participation reported is accurate), then RKS recommends that CPAU make a strong commitment to this program. The 2008 Statewide CMUA Survey concluded that green power option programs of individual utilities tend to attract the most committed environmental activists within the customer base, which can then be targeted for specific communications. If participation in CPAU’s green power option is declining, then CPAU will find itself missing an important tool for communicating with customers. 21 ©RKS Research & Consulting - All Rights Reserved, 2008. RESEARCH & CONSULTING CITY OF PALO ALTO UTILITIES 2 0 0 8 RESIDENTIAL C US TOMER S UR VE Y COVERING ELECTRICITY . REPORT OF FINDINGS Customers’ perceptions of CPAU’s power reliability show some declines since 2006. CPAU residential customers are more likely to report an outage or interruption than they did two years ago; the average number of power interruptions is up, as well. CPAU customers continue to give it high marks for working to keep outages down, but do tend to downgrade the utility’s efforts to inform customers about when power would be restored after an outage. CPAU is praised by residential customers for improved effectiveness of communications aimed at customers. However, this does not appear to carry over to the website. This 2008 research finds CPAU residential customers’ use of and assessments about the CPAU website as stable. However, this performance likely does not measure up to customers’ expectations. The conclusion must be drawn that, taking into account CPAU’s unique residential customer base, as well as its location, customers expect much more than an average website from their utility. CPAU customers’ EE Performance suggests more can be done. Interestingly, their familiarity with and concern about global warming are high, but they are more passive in their interest and actions to conserve energy. They are less interested than others in the benefits of smart meters, and are much less likely to be putting a significant effort into saving energy at home. From the standpoint of follow-ups, this places a premium on learning how to convince affluent customers that energy efficiency remains an important activity - one that requires sustained commitment in order to be effective. The bottom line: RKS believes that for CPAU in 2008 customer satisfaction is strong in a "down market" and remains well above the standard for state and northern California municipal utilities. This conclusion is buoyed by the finding that the price/value assessments of customers show some improvement, despite a rising rate environment, faltering external economic conditions and the fact that CPAU - being a four-service utility - finds itself at the focal point of all of these pressures. For RKS, the essential conclusion flowing out of this research is that CPAU is assessed quite positively by its residential customers in a very difficult business environment. 22 ©RKS Research & Consulting - All Rights Reserved, 2008.