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

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

3. 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

4. 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

5. 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 - 151 interviews

6. Value Rating Comparison: 2002 vs. 2004/2005

7. 2004 Value Rating Comparison

8. 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

9. Recent Contact with Utility Had contact 6.9 Called6.3 E-mail/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)

10. 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

11. 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

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

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

14. Had Contact with Utility (Q8a)

15. 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

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

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

18. Reliability (Q4a,b)

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

20. Image Assessment Delivering what they promise8.18.38.47.5 Working hard to satisfy customers7.98.58.37.5 Honest in dealing with customers7.98.68.57.4 Working in best interest of customers7.58.28.36.7 Providing energy conservation information7.78.58.17.6 Providing access to utility rep 24/77.68.47.97.4 Communicating effectively with customers7.68.18.07.0 Being involved in local community7.27.98.66.6 Concern for the environment7.28.68.07.5 MuniCPAUNCPAIOU 2004200520042004

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

22. Awareness and Participation in Public Benefit Programs (Q13a/b) Audits53423747816812 Incentives - efficient appliance807059734540 2839 Incentives - renewables 48706725733--- Assisted programs1151475491610 CPAUNCPACA MuniIOUCPAUNCPACA MuniIOU 20052004200420042005200420042004 %%%% AwareParticipate

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

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

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

26. Water Quality (Q11c.a-f) Clarity768.38.0 Smell738.2*7.6 Safety for drinking718.1*7.3 Taste667.7*6.6 Lack of mineral content517.8*6.4 Pressure throughout your home818.48.1 % Saying ExcellentMeanMean Palo Alto 2005Total CA *Significantly higher than Total CA Muni at the 95% level of confidence

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

28. 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

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

30. Water Management Performance (Q11f.a-g) Provide reliable, adequate water supply8.398.1 Make water clean and safe8.197.8 Teat wastewater before releasing it8.4357.7 Balance needs of business and consumers7.8487.6 Encourage water conservation7.757.4 Find new water supplies7.4487.2 Use recycled water for irrigation7.4417.0 Mean Not SureMean Rating%Rating Palo Alto 2005Total CA

31. Support of Plans to Increase Water Supply (Q11g.a-b) Desalination plant466.76.7 Recycled water for irrigation587.37.0 Using groundwater to supplement water supply during drought 396.3NA %MeanMean Palo Alto 2005Total CA

32. 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

33. 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

34. 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