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Texas energy crisis: 3 ways utilities can safeguard satisfaction post-winter blackout

David VanAmburg's picture
Managing Director The American Customer Satisfaction Index

David VanAmburg joined the American Customer Satisfaction Index in 1998 and was named Director for ACSI’s federal government satisfaction study in 1999, piloting the first-ever government-wide...

  • Member since 2019
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  • Feb 24, 2021

Consumers expect more from their energy utilities. The sector, unfortunately, keeps letting them down.

Overall customer satisfaction declined for the second straight year, dropping 1.5% to a score of 72.1 (out of 100), per the American Customer Satisfaction Index’s (ACSI) most recent Energy Utilities Report. Neither natural gas (down 3% to 76) nor electric service (down 1% to 71) is meeting customers’ expectations.

Now, after a massive winter storm hit Texas, leaving over four million people without power, it’s fair to wonder what sort of impact this will have on the sector.

In all fairness, big outages happen once in a blue moon. While events like this may linger in our minds for a bit, they’re unlikely to have a massive impact on overall customer satisfaction --unless people find out that corners were cut.

Still, there are takeaways from this recent weather event that could help all utility providers keep customers satisfied moving forward. Here are three big ones.

1. FINALLY make necessary changes

Customers are usually understanding as far as weather-related outages are concerned. They’re aware these events are “out of your control.” However, when you overlook things that you can control, that’s when frustration turns to dissatisfaction.

Unfortunately, this isn’t the first time (or even the second time) Texas-based utilities failed to prepare for a possible winter event.

While neither was on the scale of this most recent winter storm, where all 254 state counties were impacted at the same time, Texas faced extreme cold events in 1989 and 2011 that caused widespread power disruptions. After both incidents, Texas was warned to winterize its power plants. Minimal – if any – changes were made.

According to a report for the 2011 event, power plants weren’t required to implement measures to prepare for cold weather after the 1989 incident, which “left winter-readiness dependent on plant or corporate choices." As a result, over two dozen of the generators that failed in 1989 also failed in 2011.

The report confirmed that some winterization measures were taken, yet “suggests that these procedures were either inadequate or were not adequately followed.” It appears Texas-based utilities haven’t learned their lesson. This is now the third time they’ve been caught with their pants down. It’s high time they enact the necessary changes. If not, consumers are likely to be even less forgiving.

2. Maintain a constant stream of communication

This seems like an obvious anecdote, but it can’t be stressed enough: Communication is key.

During an event of this magnitude, you must keep your customers informed of any changes or updates. But communication goes beyond a single incident like this; it needs to be constant.

According to the ACSI’s latest Energy Utilities Report, this hasn’t been the case.

Investor-owned energy utilities customers found bills harder to understand (76), and the staff less courteous and helpful (74). They also believe investor-owned utilities must be better at delivering information on energy-saving ideas (70).

Don’t overwhelm your customers, but make sure to maintain a steady stream of communication, offering them news and information they will find important – like monthly reports on household energy consumption.

In the case of this recent power outage, also inform customers about when they can expect power to be returned. They’ll appreciate being kept in the loop.

3. Step when your customers need it most

While over four million Texans were left without power, many with power were shocked to discover outlandish utility bills.

On Monday, Feb. 15, the price of wholesale electricity spiked more than 10,000%, climbing from under $50 per megawatt hour (pre-storm price) to over $9,000 per megawatt hour.

A customer who uses the energy company Griddy, which charges a $9.99 monthly fee and then sells power at a market wholesale rate, owed $8,162.73 for February. The month before, he paid $387.70. Another customer, who paid just $33.93 last year for February, had a $2,869.11 energy bill for this February. These are just two examples.

Fortunately, the Public Utility Commission (PUC) of Texas has since ordered electric companies to temporarily hold off on sending bills to customers and disconnecting customers for non-payment. However, the energy providers should’ve stepped up on their own.

As I mentioned at the beginning of the pandemic, disasters are not the time to take advantage of your customers. It pays to be empathetic and supportive, not greedy. Your customers will remember how you treated them in a moment of crisis.

Can’t prevent the storm, but you can plan for it

Texas has seen two big snow events in recent memory, but it’s never experienced one quite like this. Yet rather than putting their heads in the sand (like they did twice before), utility providers must put the customer first.

You can’t prevent the storms from happening, but you can build the infrastructure to avoid the outages, maintain constant communication, and avoid detrimental price gouging.

Texas has been warned about winterizing its grid twice before and failed to act. Customers are not going to be quite as forgiving if this happens again.

David VanAmburg's picture
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Matt Chester's picture
Matt Chester on Feb 24, 2021

What great insights, David-- thanks for sharing. Obviously what's done is done and we can spend all the time pointing fingers, and of course there will be plenty of investigations to get even more to the bottom of it all, but in the immediate term the utilities absolutely need to go into damage control. Recognize that each customer impacted is a person whose life was disrupted, put at risk, or worse. It will take time to build back the trust for some, but it's a task that needs to be at the top of the to do list. 

Texas has seen two big snow events in recent memory, but it’s never experienced one quite like this. Yet rather than putting their heads in the sand (like they did twice before), utility providers must put the customer first.

Well said!

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