Benchmarking Study of Customer Care Services by zom14864


									                     Calgary Office 640 – 5 Avenue SW Calgary, Alberta Canada T2P 3G4 Tel 403 297-8311 Fax 403 297-7336


On September 23, 2004 and December 10, 2004, the Alberta Energy and Utilities Board (the Board)
received submissions from Direct Energy Regulated Services (DERS) in response to a direction in
Decision 2003-106, dated December 18, 2003, with respect to a benchmarking study of the
customer care services associated with the provision of the electricity Regulated Rate Tariff (RRT)
in the ATCO Electric service territory and the gas Default Rate Tariff (DRT) in the ATCO Gas
service territory (the Application).

In Decision 2003-106, the Board was not fully satisfied that the prices charged by ATCO I-Tek to
DERS under the customer care agreement (the Agreement) represented fair market value. Therefore,
the Board established a placeholder for customer care costs by reducing DERS’ proposed revenue
requirements for customer care costs (Original Customer Care Costs) by 10% and directed DERS to
undertake a comprehensive benchmarking study (the Study) to determine if the charges under the
Agreement represented fair market value for the services provided and if not, what the fair market
value was for the services.

In the Application, DERS indicated that it retained an outside firm to perform the Study and only
Canadian utilities were benchmarked because a study focused on Canadian entities had more
relevance and would eliminate any disagreement respecting currency conversion and labor cost

DERS filed a report that provides the results of the data collection and analyses for all study
respondents (the First Report). DERS filed a second report that examines its billing costs, credit and
collection costs and call centre operation costs and compares the unit pricing and cost per customer
under the Agreement against the benchmarks in the First Report.

DERS considers that the Application supports its Original Customer Care Costs and on that basis,
DERS requested that the Board replace the reduced customer care costs approved in Decision 2003-
106 with its Original Customer Care Costs on a final basis as of May 4, 2004 and on an interim
refundable basis as of January 1, 2005. DERS requested that the Board increase the monthly
Administration Fee for the RRT and DRT by $0.49 per month effective May 4, 2004, on a final
basis and effective January 1, 2005, on an interim refundable basis.

The Board will deal with the Application according to the following schedule.

Register as an Intervener                                                       January 10, 2005
Process Suggestions to the Board                                                January 10, 2005
Comments on Possible February 1, 2005 Administration Fee Increase               January 10, 2005
Reply from DERS on February 1, 2005 Administration Fee Increase                 January 12, 2005
Information Requests to DERS                                                    January 17, 2005
Information Responses from DERS                                                 January 31, 2005

Any party wishing to register an intervention should do so in writing, setting out their name,
address, and reasons for intervening. The Board has already scheduled the timing of information
requests and responses. However, with respect to the balance of the process and related schedule,
the Board is prepared to consider submissions from parties. The Board will establish further process
following the deadline for filing process suggestions and further information respecting the process
will only be provided to registered parties.

With respect to DERS’ request to increase the monthly Administration Fee for the RRT and DRT
effective January 1, 2005, on an interim refundable basis, the Board is not prepared to approve this
request given that interested parties have not had an opportunity to provide comments and given that
the Board has already issued approval of interim refundable non-energy rates for the RRT and DRT
effective January 1, 2005.1 However, the Board is prepared to consider the request to increase the
Administration Fee for the RRT and DRT effective February 1, 2005, on an interim refundable
basis, and requests that parties submit comments with respect to this matter.

All submissions should be sent to Direct Energy Regulated Services at the address indicated below
and to the EUB, attention Mike Hagan, Utilities Branch, via electronic mail at referencing Application No. 1361950.

Additional Information
To obtain additional information or a copy of the Application contact:
Direct Energy Regulated Services
Attention: Gary Newcombe
Suite 1000, 111-5th Avenue SW
Calgary AB T2P 3Y6
Telephone: (403) 290-7745
Facsimile: (403) 290-4644

The Application is available for viewing through the Board’s website through IAR Query by
accessing the following link and clicking “View Attachments” at the bottom of the screen:

    Order 2004-439 dated December 10, 2004.
If you have any questions with respect to EUB procedures, please contact Mike Hagan at or by telephone at (780) 427-9369.

Issued at Calgary, Alberta on December 14, 2004.

Douglas A. Larder, General Counsel

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