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Enhancing Service Quality Standards for Massachusetts Electric and Gas Utilities

In a bid to maintain high service quality standards in Massachusetts, the Department of Telecommunications and Energy, led by Commissioner Judith F. Judson, implemented performance-based rates and stringent service quality standards for electric and gas distribution companies. This initiative ensures that utilities balance cost-saving measures with the assurance of high-quality service. Key performance indicators, including reliability, customer service, and billing practices, are enforced, with financial penalties for non-compliance aiming to enhance overall service delivery.

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Enhancing Service Quality Standards for Massachusetts Electric and Gas Utilities

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  1. Restructuring Roundtable___________________________________________________________________ • Massachusetts Service Quality Standards for Electric and Gas Distribution Companies • Judith F. Judson, Commissioner • Massachusetts Department of Telecommunications and Energy • April 29, 2005

  2. BACKGROUND • Restructuring Act promulgated performance-based rates and mandated service quality standards • Rationale for SQ standards: • With PBR, incentive for companies to seek to maximize cost savings • Ensure utility does not cut costs to the detriment of service quality • D.T.E 99-84 established guidelines for service quality standards

  3. SQ MEASURMENT & ENFORCEMENT • Each Company submits an SQ report annually • Benchmarks: Company-specific based on historical performance • Penalties: Up to 2.0 percent of a Company’s revenue for failure to meet SQ benchmarks • Offsets: Company may offset monetary penalty for substandard performance in one measure with superior performance in a second measure (except odor calls)

  4. PENALTY MEASURES • Reliability and Safety 55% • SAIDI and SAIFI (electric only) • Odor Calls (Gas only) • Lost work time due to accidents rate • Customer Service and Billing 35% • Telephone Answering • Service appointments met • Meter reads • Consumer Division Statistics 10% • Consumer Division cases • Billing adjustments

  5. REPORTING REQUIREMENTS • Staffing Levels • CAIDI (electric only) • Poor performing circuits (electric only) • Restricted work days due to accidents rate • Property Damage • Line loss/unaccounted for gas • Capital expenditures • Spare parts policy • Accidents (reported within 24 hours) • Customer service guarantees

  6. Results of Current SQ Standards • $14 million in penalties collected since 2001 • Majority of penalties collected due to substandard SAIDI/SAIFI performance in 2001, 2002 • 2003 $0 penalties incurred • Gas companies have consistently met odor call benchmark **Companies’ projections

  7. Future of SQ • New Docket: 04-116; original Guidelines established in D.T.E. 99-84 only for 3 year term • Considering possible changes to existing SQ Guidelines • Comments received from Companies, Attorney General, Marketers, Unions, Consumer Groups

  8. D.T.E. 04-116:Topics Raised by Commenters • Offsets and Incentives • Odor Calls benchmark • Staffing Levels • Standardization of Benchmarking • Standardization of Definition of SAIDI and SAIFI

  9. D.T.E. 04-116:Next Steps • Discovery questions • Technical sessions and/or Evidentiary hearings

  10. Judith F. JudsonCommissioner Department of Telecommunications & Energy One South Station Boston, MA 02110 (617) 305-3520 (voice) (617) 345-9102 (fax) judith.judson@state.ma.us

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