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HomeMy WebLinkAboutStaff Report 2601-5845CITY OF PALO ALTO CITY COUNCIL Special Meeting Monday, March 02, 2026 Council Chambers & Hybrid 5:30 PM     Agenda Item     C.Informational Report on Residential Electric and Water Utility Customer Satisfaction Survey Results City Council Staff Report From: City Manager Report Type: INFORMATION REPORTS Lead Department: Utilities Meeting Date: March 2, 2026 Report #:2601-5845 TITLE Informational Report on Residential Electric and Water Utility Customer Satisfaction Survey Results RECOMMENDATION This is an informational item. There is no recommendation. EXECUTIVE SUMMARY The City of Palo Alto Utilities (CPAU) conducts annual utilities customer satisfaction surveys to gauge perspectives on critical utilities issues. This report summarizes the latest results of the residential electric and water utility customer surveys performed October 14 through November 25, 2025. Key findings include: • CPAU significantly outperforms aggregated statewide municipal and investor-owned utility (IOU) benchmarks in both water and electric across most key metrics. • Results indicate strong local trust, high performance in reliability and quality, and benefits from a carbon-neutral, community-focused utility model. • CPAU should focus on customer service first-contact resolution to reduce repeat contacts by standardizing workflows for the most common inquiries, such as billing issues, and developing a process for rapid resolution review. • It is recommended that CPAU communicate more broadly about emergency preparedness, emergency response, and coordination with other City departments, such as the Office of Emergency Services, so customers have a better understanding of how well their utility is prepared to handle natural disasters or drought. Staff presented this report of survey results and presentation linked below to the Utilities Advisory Commission (UAC) on February 4, 2026. The presentation describes the goals, methodology, key findings, and strategic action considerations for CPAU based on customer feedback and insights. Additionally, copies of both the full report of results from the electric and water surveys are included as attachments to this report. The discussion with Commissioners focused on the need to expand communication in the areas of customer programs, emergency response, and infrastructure projects to highlight reliability improvements and conservation benefits. Customer survey results revealed that when ratings to questions are lower, it is often due to customers responding they are ”unsure” about how CPAU ranks in a certain area. This is an opportunity to increase email and other digital means of communication, as well as continue with print materials, to reach a broader audience, particularly for some of these core topics. BACKGROUND ANALYSIS Overall Performance Context Water Service: CPAU's average positive rating across organizational characteristics was 80.0% (+1.1 percentage points compared to 2023), compared to 63.3% for the statewide municipal utility customer aggregate. CPAU scored higher on every single characteristic, with the largest gaps in “environmental responsibility” (+23.2 percentage points), "promoting efficient use and conservation" (+22.4 percentage points) and “monitoring water quality” (21.0 percentage points). Electric Service: CPAU's average positive rating was 74.4% (+3.5 percentage points compared to 2023), compared to 62.0% for statewide municipal utilities and 62.6% for IOUs. CPAU led on 10 of 11 characteristics, with the highest scores in reliability (+19.5 percentage points), outage restoration (+18.3 percentage points), and commitment to renewables (+23.7 percentage points). Key Strengths Highlighted in Deeper Analysis Alignment of Performance and Priorities: In both surveys, CPAU shows strong alignment between what customers rate as most important (e.g., water quality and monitoring, reliable supply, value for cost) and where CPAU earns its highest scores. This alignment is tighter than the municipal utility averages, contributing to high Net Positive Scores (86.1% among water customers; 82.1% among electric customers). Net Positive Score (NP+S) = (advocates + loyal + satisfied). Value and Affordability Perception: Despite rate pressures felt industry-wide, CPAU customers rate value and reasonableness higher than benchmarks. For example, 68.0% rate water value "good/very good"; and 71.8% find electric rates reasonable, which is 7.4 percentage points higher than other electric municipal utilities in California. Environmental and Conservation Leadership: High ratings for conservation promotion and renewable commitment stand out as differentiators versus other municipal utilities. Areas of Opportunity Customer Service Resolution: First contact resolution dipped modestly among both water customers (-13.9 percentage points) and electric customers (-3.8 percentage points). Billing inquiries and lack of prior resolution were common drivers of repeat contacts. These are common pain points for many municipal utilities dealing with rate complexity. Also, customers are increasingly expecting to find more information on their utility’s website and turning to customer service when they cannot find this information. Preparedness Perceptions: Lower confidence in drought, natural disaster, and emergency preparedness. These are notably below municipal utility averages in some cases and may reflect statewide anxiety around climate risks rather than CPAU-specific issues. Digital Tools and Communication: Satisfaction with self-service digital options lagged behind municipal utility averages in the electric survey (-9.8 percentage points), suggesting room to enhance online portals for account management or other self- service activities. Action Items Strengthen customer service first-contact resolution through billing issue workflows, identifying common failure points such as unclear bill language, difficulty navigating online account tools, or delayed processing. Integrate proactive digital tools, such as estimated bill explanations or usage trend visualizations, to help customers self- diagnose matters before contacting support, reducing call volume and complexity. Enhance education about utility rates and affordability through robust outreach campaigns, utilizing a variety of different media, to better communicate the value of publicly owned utilities. Expand communication about infrastructure improvements, highlighting regular updates on water and energy infrastructure projects to showcase reliability improvements and conservation benefits. Clearly articulate how these investments align with CPAU’s mission, customer priorities, and affordability. Communicate more broadly about CPAU’s emergency preparedness and emergency response planning, particularly in partnership with other city departments such as the Office of Emergency Services. This relates to CPAU’s abilities to respond to natural disasters such as earthquakes or wildfires, and droughts. Communication outlets include utility bill inserts, website updates, and community outreach events. Develop income-specific messaging pathways for electric appliance replacement programs that reflect the motivations, financial constraints, and support needs of each group. Offer simplified “guided installation pathways,” including contractor recommendations and step-by-step support for high-income customers who prioritize convenience and trusted installation partners. Enhance outreach during key replacement moments, such as emergency replacements, with clearer, faster messaging on available rebates and financing options. Amplify outreach campaigns to inform water customers about efficient usage and rebate opportunities. Align rebate tiers and cost-share structures with demonstrated willingness-to-pay segments, ensuring that lower-cost options remain accessible to customers with limited budgets. Seek additional ways to communicate more frequently with customers via both digital channels such as email and direct mail about important utilities issues. Expected Outcomes CPAU plans to implement the identified action items and address key takeaway results to improve customer satisfaction, trust, awareness, and engagement. Survey results indicate that an improved understanding of rates and the value of what goes into those investments, including program benefits, will lead to increased satisfaction and trust. Dedicated efforts to raise awareness among different customer groups about programs and resources will lead to higher participation in energy and water efficiency initiatives, as well as accelerate adoption of electrification solutions and conservation practices. Expanding educational outreach and awareness around rates, infrastructure investments, emergency preparedness, and affordability initiatives will build greater trust in CPAU among customers. Customer relationships will be strengthened, solidifying CPAU’s reputation as a reliable utility provider focused on community needs. FISCAL/RESOURCE IMPACT CPAU compensated GreatBlue Research, Inc. in the amount of $22,000 for the statewide residential electric and water customer surveys and oversampling survey of Palo Alto residents. STAKEHOLDER ENGAGEMENT GreatBlue Research, Inc. utilized digital data collection to field responses from a statistically significant, random sampling of residents. Staff provided public outreach to the Palo Alto community to ensure the legitimacy of the surveys and encourage greater participation. Staff presented this report of results to the Utilities Advisory Commission on February 4, 2026, and have incorporated feedback from the commissioners in this report to City Council. ENVIRONMENTAL REVIEW This does not meet the definition of a project, pursuant to Section 21065 of the California Environmental Quality Act, thus no environmental review is required. ATTACHMENTS/LINKS: Attachment A: City of Palo Alto Utilities Residential Electric Customer Satisfaction Report 2025 Attachment B: City of Palo Alto Utilities Residential Water Customer Satisfaction Report 2025 Presentation APPROVED BY: Alan Kurotori, Director of Utilities