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Regulatory Monitoring of Service Quality in Michigan

Energy Regulatory Partnership ProgramAbuja, Nigeria

July 14-18, 2008

Ikechukwu N. Nwabueze, Ph.D.Director, Regulated Energy Division

Michigan Public Service Commission

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Rationale and Objectives of Performance Monitoring ProcessPerformance monitoring is necessary to ensure that the mission of the Commission is implemented:To regulate investor-owned natural gas and

electric utilities and rural electric cooperativesTo ensure that Michigan’s utility customers

have safe and reliable utility service at reasonable rates

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Objective of Performance Monitoring Process

To ensure that utility companies comply with the Commission’s rules and the company’s tariffs

To ensure that customers are treated fairly To ensure that customers receive the service

promised by the utility company in a safe and reliable manner

To ensure that company personnel treat customers with the respect that they deserve.

To ensure that all Michigan citizens have the opportunity to have utility service during the cold Michigan winters

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Role of Regulator in Monitoring of Service Quality

To listen to concerns of utility customers and provide answers to their questions

To ensure that the utility companies provide quality service to customers

To determine if the utility complies with its service standards established by the Commission

To ensure that the company is following the Commission’s rules

To develop incentives for company compliance with the rules and tariffs

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Methodologies and Types of Monitoring

Monitoring is done by the Commission’s Service Quality Division

Toll-free telephone numbers for state-wide access to the Commission allows customers to contact the Commission at no costStaff receives complaints from customers that are

resolved by the company / staffThe major gas and electric companies established,

at the Commission’s direction, Executive Customer Assistance Centers staffed by company reps with the authority to cross departmental lines to solve customer problems referred to the company by the staff

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Methodologies and Monitoring (Continued)

Staff looks for trends in complaints to determine if the complaint is an isolated incident or a systemic problem

Computerized complaint tracking system is used to log complaints and analyze data (Goldmine)

Utility companies provide reports to the Commission on customer service activities including:Number of disconnection notices issuedNumber of customers actually disconnected

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Methodologies (Continued)

Number of customers who received payment assistance

Number of customer accounts in arrears and dollar amount of arrears

Number of informal utility hearings held with customers

Number of settlement agreements writtenTotal number of complaints handled and disposition of

complaintsTotal number of customers accepting the company

resolution

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Availability of Technical and Operational Data

Data readily available due to in-house computerized complaint tracking system

Service Quality staff available to design different types of data reports requested by the Commission or others

Complaint tracking system easy to manipulate so complaint handling staff can prepare reports of number and types of complaints handled

Complaint tracking system regularly updated to capture latest information about complaints

Service Quality staff complaint handling often leads to Commission investigation of utility company practices

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Effects of Competition on Service Quality

• MPSC has adopted generally applicable service and reliability standards for the transmission and distribution systems of electric utilities

• Michigan is a hybrid market – it is not fully competitive, and it is not a fully regulated

• Standards governing the form and content of all disclosures, explanations, and sales information disseminated by persons offering or selling any retail electric service within the State of Michigan. (U-12487)

• Customer Billing can be done by either the Utility or the AES– Utility is the only entity who may physically shut off services to a choice

customer• AES must follow service requirements as set forth in the ROA tariffs • Impact on choice customer if they do not meet minimum two year

term requirements and/or failed to provide written notification requirements, as they have to pay a market based rate

• No effect on service quality as the utility remains the provider of last resort

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Case Study

• Designing an effective monitoring process

• Example: outage investigation.

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Questions?