PUC approves plan for measuring utilities’ customer service

Kevin Rademacher

Thursday, Aug. 25, 2005 | 11:14 a.m.

The state Public Utilities Commission on Wednesday approved guidelines for measuring customer service at Nevada Power Co. and Sierra Pacific Power Co. of Reno.

Those measurements will be used in future rate cases in which state regulators address the costs of a 1999 merger between the two companies. In the PUC original order allowing the merger, regulators ruled that customers should be "held harmless." While handing down the mandate, however, few guidelines were defined on which future debates could hinge.

In approving Wednesday's plan, regulators expressed relief that a specific path had been laid out.

The plan includes the use of "carefully scrutinized" survey data and metrics based on the company's pre-merger and post-merger performances. It also preserved the commission's ability to level fines and disallow the recovery of merger costs should the company fail to meet the original conditions of the merger approval.

The proceedings were the product of a 2004 general rate case. In issuing its final order in the case, the Public Utilities Commission of Nevada directed the utilities to create a mechanism for measuring customer service levels. Those levels would have to ensure the PUC's original directive in approving the merger that customers would not be harmed by combining the companies.

A sensitive subject for the parties involved has been the ability to measure declines in customer service associated only with the 1999 merger.

Given that so much time has passed since the merger -- and that the utilities experienced fallout from the Western energy crisis of 2000-01 since the merger -- such a mechanism had been difficult to create.

The final plan is a compromise between the utilities and the PUC staff; the companies wanted the measurements to allow for the change in public opinion fueled by the western energy crisis while the commission staff wanted to hold the utilities accountable for current customer satisfaction levels.

Sierra Pacific Resources -- parent company of Nevada Power and Sierra Pacific Power -- saw its customer satisfaction rating inch higher in a recent J.D. Power and Associates survey. It was, however, short of the West Region average score of 100 and below the industry average 103.

Back in 1999, a similar J.D. Power survey credited Nevada Power with one of the highest residential satisfaction rates in the country. In that study, the Las Vegas company grabbed a score of 108, well above the industry average of 100, the highest score in the West and fifth-best in the country. Sierra Pacific Power scored a 102 in the study.

By 2002, amid fallout from the Western energy crisis and the associated dramatic rate increases, the parent company was worst in the West for customer satisfaction. The company began its climb out of the cellar the following year.

In other utility news, PUC Public Information Officer Rebecca Wagner has been named energy advisor to Gov. Kenny Guinn.

Wagner replaces Richard Burdette, who died in April. She will assume her new role on Monday.

She joined the PUC in December 2003 after working for seven years as government affairs and public relations manager for a Reno-based geothermal company.