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Electricity Utilities?
The Forum of Regulators Report on Standardization of the Distribution Franchisee
model (September 2010) mentions that the objectives of appointing a distribution
franchisee, inter alia,
are:
i. To minimise Aggregate Distribution and Commercial losses
ii. To bring improvement in Metering, Billing and Revenue Collection
iii. To minimise Current Assets on account of arrears
iv. To enhance customer satisfaction level by improving quality of service
Placing focus on the fourth point, we find that while much information is shared in the
Distribution Franchisee RFPs, they hardly provide any information on the current customer
satisfaction levels nor the customers perspective of the network infrastructure, current
quality of services etc. This is a stark thing to miss considering all CERC, CEA, State ERCs
and State Discoms mandate Improving Customer Satisfaction as one of the 4 objectives of a
Power Distribution Franchisee. The reason probably for the miss is that the areas being
offered for franchisee are any way loss making and hence customer dissatisfaction is well
understood.
However, while all utilities, licensees and potential or current distribution franchisee
operators try to improve quality of service; could efforts to understand the customers
perception and expectations from the utility help the utility make more quality decisions to
improve the services and have a happy, paying customer?
The answer probably is a big Yes. Measuring customer satisfaction using a structured
methodology that relates the customer responses with consumer demographics and key
factors/attributes affecting business performance is probably the only way of
independently & periodically benchmarking effectiveness of utilities operating in same or
different zones. No doubt a number of such mechanisms have evolved and established
themselves in the western countries where multiple state / private companies operate in the
same locality.
But how really could measuring customer satisfaction or proactively identifying customer
preferences help? We believe, they could in the following key ways,
for the services and with the advent of private companies to manage distribution systems,
their expectations are on the rise.
It becomes more and more important to understand the customers needs (requirements
and expectations) and factors that affect his/her satisfaction as they directly or indirectly
affect the customers behavior towards the use & misuse of the utilities services and
infrastructure.
A satisfied customer is more inclined to understand the harmful effects that power stealing,
etc will have on the quality of service AND the price at which they are delivered to him or
her. High satisfaction and awareness of quality of services delivered to him/her enhances the
support and cooperation that the end consumer can extend to the distribution utility for
monitoring non-normal activity on the network infrastructure and also bring to notice
untoward incidents that affect the secure working of the system.
Consider the case of NDPL, which probably in the Indian context is known to be the best
case of turn around to become a consumer-centric utility, which by leveraging customer
satisfaction & preference studies was able to lower Average waiting time for bill payment by
four times and increase Customer confidence in paying bills by checks to 50 percent.
While utilities perform they should know whether the performance is effective enough to
meet the needs of the current and potential customers. Especially in the case of distribution
franchisees where a complete new management will be handed over the operations of the
local distribution system, it is imperative to measure the existing effectiveness of
performance from all different perspectives of which the customer perspective is a
significant one.
The key question is, if we dont measure customer satisfaction, how will we manage it? Not
only this is true for the distribution franchisees and operating utilities but also for the
licensees who need to ensure that the objectives of distribution franchisee contract are met
over the next so-many years.