CMUA 2004 Statewide Survey of California Residential Customers Served by Municipal Utilities City of Palo Alto Public Utilities April 2005

Project Goal Obtain updated measurement of residential customer satisfaction with municipal utilities

Other Objectives n Compare against most recent CMUA reading - yearend 2002 n Compare against ratings given to IOUs by their customers n Update previous CPAU reading, 2002

Methodology n Study commissioned by CMUA members n Done twice before - yearend 2001 and yearend 2002 n Sample drawn using RDD (random digit dial) technique n Interviews conducted from November 18 - December 13, 2004 n Average interview: 22 minutes; sponsors not disclosed n CPAU provided customer lists; sponsorship revealed

Final Sample n Total of 604 telephone interviews conducted: l 501 served by municipal utilities s 200 in Northern California s 301 in Southern California l 103 served by California IOUs n CPAU oversample interviews

Value Rating Comparison: 2002 vs. 2004/2005

2004 Value Rating Comparison

Value Rating by Key Dimensions Total CA Muni7.0 Type of Service Purchase Purchase only electricity 7.4 Purchase multiple services6.7 Budget plan7.1 Green Energy Option Aware7.5 Aware and participate7.9 Not aware6.5 Value Rating* *Average score on a 0 (lowest) to 10 (highest) scale

Recent Contact with Utility Had contact 6.9 Called6.3 /web7.4 No contact7.1 Public Benefits Program Aware and participate7.3 Homeowner Status Own7.2 Rent6.9 Value Rating* *Average score on a 0 (lowest) to 10 (highest) scale Value Rating by Key Dimensions (continued)

Pricing Perceptions: Percent Calling Price High+ (Q10a) *Significantly higher than 2002 at the 95% level of confidence +Percent responding 8, 9 or 10 on a 0 (price is low) to 10 (price is high) scale

Utility Works Hard to Keep Prices Down (Q10b) Percent responding 8, 9 or 10 on a 0 (does not work hard) to 10 (works very hard) scale

Perceived Value of Electrical Service (Q10c) *Percent responding 8, 9 or 10 on a 0 (poor) to 10 (excellent) scale

Overall Satisfaction with Utility (Q2) *Percent responding 8, 9 or 10 on a 0 (very dissatisfied) to 10 (very satisfied) scale

Had Contact with Utility (Q8a)

Overall Satisfaction with Contact Experience: Percent “Very Satisfied” (Q8e) Percent responding 8, 9 or 10 on a 0 (very dissatisfied) to 10 (very satisfied) scale

Customer Service Rep Assessment* (Q8d) (Base: Called or Visited Utility and Spoke with Rep) *Average score on a 0 (poor) to 10 (excellent) scale

Visited Utility Website in Past Year (Q8a) *Significantly higher than Muni 2002 at the 95% level of confidence

Reliability (Q4a,b)

Rating on Aspects of Reliability (Q5a-d) Mean rating on a 0 (poor) to 10 (excellent) scale

Image Assessment Delivering what they promise Working hard to satisfy customers Honest in dealing with customers Working in best interest of customers Providing energy conservation information Providing access to utility rep 24/ Communicating effectively with customers Being involved in local community Concern for the environment MuniCPAUNCPAIOU

Appeal of Payment Options (Q11a) Percent calling option “appealing”

Awareness and Participation in Public Benefit Programs (Q13a/b) Audits Incentives - efficient appliance Incentives - renewables Assisted programs CPAUNCPACA MuniIOUCPAUNCPACA MuniIOU %%%% AwareParticipate

Effectiveness of Public Benefit Programs (Q13c) Mean rating on a 0 (completely ineffective) to 10 (extremely effective) scale

Awareness and Participation in Utility’s Green Energy Program (Q14a)

Communication Effectiveness (Q15a) Rating on a 0 (very ineffective) to 10 (very effective) scale *Significantly higher than 2002 at the 95% level of confidence

Water Quality (Q11c.a-f) Clarity Smell738.2*7.6 Safety for drinking718.1*7.3 Taste667.7*6.6 Lack of mineral content517.8*6.4 Pressure throughout your home % Saying ExcellentMeanMean Palo Alto 2005Total CA *Significantly higher than Total CA Muni at the 95% level of confidence

Perception of Price Pay for Water Today *Rate 8, 9 or 10 on a 0 (price is low) to 10 (price is high) scale

Drinking Water Preferences (Q11d) *Significantly lower than Total CA Muni at the 95% level of confidence ^Significantly higher than Total CA Muni at the 95% level of confidence

Frequency of Drinking Bottled Water (Q11e) Base: Purchase bottled water for drinking

Water Management Performance (Q11f.a-g) Provide reliable, adequate water supply Make water clean and safe Teat wastewater before releasing it Balance needs of business and consumers Encourage water conservation Find new water supplies Use recycled water for irrigation Mean Not SureMean Rating%Rating Palo Alto 2005Total CA

Support of Plans to Increase Water Supply (Q11g.a-b) Desalination plant Recycled water for irrigation Using groundwater to supplement water supply during drought 396.3NA %MeanMean Palo Alto 2005Total CA

Summary n This survey finds CPAU’s performance top tier on both power and water l Customer Satisfaction (Value Rating) often betters NCPA- members average l On almost every other measure, CPAU betters its 2002 performance l CPAU betters statewide averages on water dimensions

CPAU Recommendations n Continue to do your knitting - the formula for success is in place and needs continuity n Look into power delivery - particularly power quality incidents n Public benefits programs should be reviewed n Continue to recognize unique customer base in Palo Alto and their specialized wants and needs

Statewide Recommendations n Website becoming an effective communications tool - take advantage of this trend n Green energy is a winner - make it work for you n Promote alternative payment options - without a fee n Communicate benefits provided by municipal utilities