LIPA reaches new low in customer satisfaction in national survey

After signaling last month that it may need After signaling last month that it may need to raise rates in April to recoup $72 million in unbudgeted fuel costs, the Long Island Power Authority now says it will cut residential bills an average of $13 this month. (Nov. 12, 2012) Photo Credit: AP

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The Long Island Power Authority, hit hard by two consecutive years of storm-related outages, reached a new low in customer satisfaction on a newly released national survey.

The American Customer Satisfaction Index reported Tuesday that LIPA earned 43 points out of a total 100 -- the lowest score ever for any of the 230 brands across 43 industries that the research firm has tracked for the past 19 years. (It includes airlines, cellphone companies and computer makers, among others.)

LIPA's low score comes at a time when the utility industry saw a continued improving trend. LIPA scored at the bottom of all utilities in the survey -- 28 investor-owned and public utilities.

LIPA earned 65 points in 2011 and 58 last year.

David VanAmburg, managing director of the ACSI, said two years of sharply declining results were the primary reason for LIPA's low score this year, both tied to dissatisfaction with LIPA's response to Hurricane Irene and superstorm Sandy.

"Two years ago we saw a pretty big drop after Irene, and we're seeing an even bigger drop in the wake of Sandy," he said.

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Con Edison saw a 1 percent decline to score 70 out of 100, and Northeast Utilities of Connecticut increased its 2012 score by 24 percent to 73 out of 100.

LIPA in January is scheduled to turn over day-to-day management of the system to PSEG of New Jersey, after being run by National Grid and its predecessor, KeySpan, since 1998. PSEG received a 74 in the 2012 ranking, a 4 percent decline from the 2011. National Grid wasn't named on the survey.

The survey of 250 LIPA customers, conducted between January and March of this year, mirrors similar customer satisfaction results from research firm JD Power and Associates.

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LIPA has been under more scrutiny in the past several years than many investor-owned utilities, with the Moreland Commission, the Public Service Commission, the state Inspector General and the state Attorney General all probing its overall and storm performance.

Gov. Andrew M. Cuomo has proposed selling LIPA assets to a private company, but a detailed review of the options remains pending.

LIPA spokesman Mark Gross said the utility "while disappointed," was "not surprised by these results given the fact that Mother Nature has dealt LIPA and our customers the worst one-two punch in Long Island's history."

He noted LIPA is ranked among the top-rated utilities for reliability and was "working across the company to improve customer satisfaction."

LIPA last year contracted with a branding company to study ways to improve its image with customers. Options include scrapping the LIPA name entirely, the utility has said.

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Gross Monday said LIPA had not seen the results and declined to comment.

VanAmburg said scrapping the LIPA name isn't likely to be enough to improve its score. "Changing a name or image or putting a spin around it, it can play some role, but it's going to be a minor role," he said.

What the utility really needs is to fix the system so that outages aren't so numerous -- more than 1 million customers lost power during Sandy -- and to respond more quickly when power is knocked out, he said, adding that switching to PSEG to run the utility could help.

"Bringing in someone with a proven track record of managing the infrastructure better may lead to tangible results," he said.

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