In my previous posting I highlighted the importance that electricity customers place on the price they pay, and shared data that showed price-related concerns have risen to an all-time high. In my final post about CEA’s 2009 Public Attitudes research I want to focus again on price, but this time in terms of the relative importance of price when compared to other priority expectations of customers.
In the posting two weeks ago I shared some of our polling results which dealt with the relative importance and satisfaction of nine characteristics of electricity service, with a special focus on price. This was only a subset of the characteristics of electricity service that we measure; in fact, we track the importance and satisfaction of more than 20 dimensions of electricity service. We have assembled this list, which continues to be modified over time, from focus group research that CEA has conducted over the past 15 years. In essence, these 20-plus characteristics are what customers have told us matter to them when they evaluate their satisfaction with their electricity supplier.
From amongst these more than 20 dimensions of electricity service, there are three which are consistently raised across all jurisdictions as top-of-mind for customers: environment, price and reliability. Given this consistency, for the last nine years we have been probing the trade-offs between these fundamental customer expectations. To understand their priorities, we inform the customer that in jurisdiction X people have a choice between electricity suppliers; we then ask them that if they were to choose an electricity supplier, which attribute from a pairing, drawn from the three mentioned above (i.e. price and environment or environment and reliability), would be most important to them. Through this trade-off type of question structure we have identified some very significant changes in public attitude since the onset of the economic downturn last fall.
First, when reliability and environment are the two choices, historically, customers have generally been split on the question. One big exception, as you can see, was in 2007, when a surge in environmental concern seen throughout our results coincided with the awarding of the Nobel Peace Prize to the Intergovernmental Panel on Climate Change (IPCC) and former Vice-President Al Gore. In 2009, however, the trend has clearly reversed and priority has unmistakeably shifted to reliability.
Prior to this year, when it came to a trade-off between price and the environment, there was never a contest. Even though in relative terms price is ranked as high in importance, until 2009, when asked to assign priority to one or the other when choosing an electricity supplier, environment had always been the principal priority for nearly two thirds of all customers. This year, with overall price concerns at all-time highs, we have witnessed a reversal; significantly more customers now suggest price would be their priority.
And finally, with price and reliability dynamic, we have witnessed another reversal. There was a time when reliability was dubbed the top priority by three times more customers than those selecting price. There has been a slow yet steady erosion since we began tracking this question, and now, for the first time, more customers choose price over reliability when asked to trade-off between the two.
In my previous posting, I wrote about the challenges of attempting to engage the public in a dialogue about electricity big-picture issues and that, in a period of increased price sensitivity, this challenge is magnified. These results further reinforce to me the importance of that dialogue. The concern today may be price, but the other core characteristics of electricity service – safety, security, reliability, and sustainability – are elements which, while often taken for granted, remain essential to our service. As we have seen, attitudes can shift rapidly, and the public will forgive neither us, nor the legislators, if we fail to invest now to ensure long term environmental and operational sustainability.
President and CEO
Canadian Electricity Association