With customer-reported electricity and gas rates reaching historically high levels in the UK, proactive communication to customers about price changes and managing their energy costs is particularly important to overall customer satisfaction with utility suppliers, according to the J.D. Power and Associates 2009 UK Electricity and Gas Supplier Customer Satisfaction Study released today.

The study finds that monthly customer-reported bill amounts have increased notably in 2009, compared with 2008. Monthly electricity bills in 2009 average 50.34 pounds sterling-4 percent higher than in 2008. For gas customers, monthly bills in 2009 average 50.08 pounds sterling-an increase of 8 percent from 2008.

The study also finds that satisfaction with the supplier's price and value declines considerably among customers who indicate they are aware that their gas or electric company raised prices within the past 12 months, compared with the industry average. However, this decline in satisfaction may be mitigated if customers are informed in advance of rate increases by their supplier.

Comparison of price and value satisfaction based on advance notification of price increases by the supplier

Despite the positive effect that advance notification of price increases by suppliers has upon satisfaction, only approximately one-half of customers report having received these advance notices. Among electricity customers who say their supplier increased prices within the past 12 months, 54 percent indicate that their supplier notified them in advance. A lower percentage of gas customers-48 percent-say the same.

In addition, among electricity customers who say they are aware of price reductions instituted by their supplier, satisfaction with price and value averages 522 on a 1,000-point scale, compared with 476 among customers who indicate no awareness. Among gas customers, satisfaction scores are 486 and 470, respectively.

"Due to current economic conditions and relatively high utility rates, suppliers that perform highly are perceived as being particularly helpful in assisting customers with finding the best price options and reducing their bills," said Gordon Shields, director of proprietary and service industries research at J.D. Power and Associates. "However, it is particularly notable that overall satisfaction with utility suppliers in the UK is considerably lower than that of other service industries, which indicates the need for additional improvement within the utility market."

The study, now in its 10th year, examines customer satisfaction with electricity and gas utility suppliers by examining six factors. For electricity suppliers, the factors are price and value; customer service; power quality and reliability; environmental responsibility; billing and payment; and meter reading. For gas suppliers, the factors are price and value; supply quality and reliability; customer service; environmental responsibility; billing and payment; and meter reading.

Electricity Supplier Rankings

Atlantic ranks highest among electricity suppliers with a score of 640, and performs particularly well in the customer service and price and value factors. Swalec (623) and EDF (618) follow Atlantic in the segment rankings. Swalec performs particularly well in the power quality and reliability factor, while EDF performs well in the environmental responsibility factor.

The study also finds that informing customers of their supplier's environmental responsibility efforts has a strong positive impact on satisfaction. Overall satisfaction averages more than 90 index points higher among customers who indicate they are aware of their supplier's efforts to improve their impact on the environment or their supplier's energy conservation plans, compared with customers who indicate they are not aware of their supplier's initiatives in these areas.

"It is encouraging that suppliers are becoming more active in communicating their 'green' credentials," said Shields. "In conjunction with awareness programmes targeted at households to reduce energy usage, these new green initiatives are likely to help improve satisfaction levels."

The study also finds that high satisfaction with a utility supplier fosters higher levels of customer commitment, which lead to higher levels of customer loyalty and advocacy. Among customers who say they are highly committed to their electricity provider, 79 percent say they "definitely will not" switch to another supplier, and 81 percent indicate they "definitely would" recommend their supplier. In contrast, among electric customers who say they have medium levels of commitment to their supplier, only 19 percent say they "definitely will not" switch and only 13 percent indicate they "definitely would" recommend their supplier.

The 2009 UK Electricity and Gas Supplier Customer Satisfaction Study is based on 2,845 responses from domestic electricity customers and 2,849 responses from domestic gas customers throughout the UK. The study was fielded in August 2009.