2004 / 05
Customer Performance Report 3. PPM Energy 23
Business Overview 23
1. Overview 3
Aims & Achievements 24
Key Issues 4
Green Energy 24
Performance Highlights 4
3. PacifiCorp 26
2. Infrastructure Division 7
Business Overview 26
Business Overview 7
Aims & Achievements 28
Aims & Achievements 9
Security of Energy Supply 29
Security of Supply 10
Customer Satisfaction 32
Customer Satisfaction 11
Customer Service 33
Customer Service 12
Helping Customers Manage Energy Use
Managing Energy Use and Impacts 13
and Impacts 37
3. UK Division 14 Advertising and Marketing 39
Business Overview 14
Aims & Achievements 15
Security of Supply 16
Customer Satisfaction 16
Customer Service 16
Helping Customers Manage Energy Use 20
Advertising and Marketing 22
2 ScottishPower Customer Performance Report 2004/05
ScottishPower generates electricity, operates and maintains large power
delivery networks, and provides a full range of energy supply services including
metering, billing and call centre support to commercial and residential
customers. In the US, ScottishPower’s activities also include coal mining and
gas storage/hub services. In the UK, we also supply gas.
International strategic goals ScottishPower plc is an international energy business listed on PPM Energy
both the London and New York Stock Exchanges. The group A wind and gas energy business based in the US.
ScottishPower has three group-wide international
consists of four businesses that serve over 6.7 million electricity
strategic marketplace goals:
and gas customers. In May 2005 ScottishPower announced an PacifiCorp
to be recognised for outstanding customer
service and care; agreement to sell its US-based regulated division PacifiCorp to A regulated utility company based in Portland, Oregon,
to provide safe, reliable power underpinned by Mid-American Energy Holdings Company. serving electricity customers in six Western US states.
sustained investment in our assets and ScottishPower announced the sale of PacifiCorp to Mid-
technology, and Infrastructure Division American Energy Holdings Company in May 2005.
to be an established pioneer of sustainable The Infrastructure Division owns and manages the company’s
energy. transmission and distribution system – the system of poles and More information about the ScottishPower Group and its
wires that delivers energy to homes and businesses in the UK. businesses can be found in the Annual Report & Accounts.
An energy business consisting of five wholly owned
subsidiaries that carry out activities including: energy
generation, customer sales and service, wholesale activities,
market balancing, and data management and metering.
3 ScottishPower Customer Performance Report 2004/05
1 Key Issues
ScottishPower’s businesses have differing operating and regulatory environments, and therefore the issues related to each business
also differ. In all of our markets, we focus on the issues that are of most concern to our customers and our stakeholders. These are
identified through customer research and stakeholder engagement processes.
Overall, our most fundamental issue - and our customers’ most fundamental requirement from us - is the provision of a secure,
reliable supply of power.
More specifically, we have identified the following issues as being of greatest importance for each of our businesses:
Infrastructure Division PPM Energy
Quality of information during power interruptions Cost-competitive renewable energy
Our care for special needs and business customers during Integrated energy management
planned interruptions Leading gas storage services
Speedy resolution to voltage/quality of supply issues Cost control
Customer contacts – round-the-clock responsiveness Risk mitigation
UK Division PacifiCorp
falling Overall service (including reliability of fuel supply): how we
improve our business so that it meets or beats customers’
expectations of service delivery
Security of energy supply
Reliability of energy supply
Price and value of energy
complaint totals across the business Value for money: how we deliver affordable energy Customer service
Reputation: how we act in ways that reflect our values to Reputation of the utility company
customers and communities
87% of PacifiCorp’s residential customers said they were
satisfied with customer service in transaction research.
1st 2 Performance Highlights There were two exceptions:
PacifiCorp’s index score of 98 in the JD Power and
Performance Summary Associates survey of residential customers fell short of
PacifiCorp’s ranking among US electricity We met most standards and targets for system reliability. the target of 100.
utilities for commercial and industrial Particular highlights include: Infrastructure Division’s Manweb area received a
customer satisfaction Infrastructure Division’s Scottish distribution area penalty charge estimated at £40,000 for its performance
bettered the target for customer minutes lost by 14% on answering the telephone.
There was one exception: Customer complaints fell across the businesses. In
Our Manweb distribution area (Greater Manchester and particular:
North Wales) experienced 49 customer interruptions, Complaints to energywatch about Infrastructure
which fell short of the Ofgem target of 47.2. Division dropped from 125 in 2003/04 to 111.
We met or exceeded nearly all standards and targets for Overall energywatch complaints fell by 0.63% on a year-
customer satisfaction. Particular highlights include: by-year basis. Complaints per 1,000 customers fell from
Of our service attributes in the UK Division, 56 have 1.58 to 1.57 in the year, despite continued sustained
remained steady over the last year, six have improved growth in customer numbers.
and 10 have declined. Complaints about PacifiCorp across all states
PacifiCorp ranked first in the national TQS research numbered 557, lower than the target of 588.
amongst commercial and industrial customers.
4 ScottishPower Customer Performance Report 2004/05
We completed a number of initiatives for customer with Uptake of our green energy initiatives continues to rise:
£1 million special needs, including:
We reviewed our responsibilities in addressing fuel
UK Division more than doubled sales of its Green
Source renewable supply option for businesses, and
Trust Fund established to help combat fuel poverty in the UK and undertook research, delayed increased the number of services provided to customers
poverty in UK price increases and established a £1 million trust fund under domestic Green Energy packages by a third.
to help some of the most vulnerable customers. PPM has a 9,000 MW pipeline of windfarm
PacifiCorp developed and implemented a template for development opportunities.
Spanish-speaking customers to enable them to read PPM was the largest wind developer in the US in
and understand their bills more easily. 2004/05 with 574MW of wind energy under
We made considerable progress with regards to energy construction and due in the 2005 calendar year.
171% efficiency and demand management:
Ofgem released its review of the Energy Efficiency
Commitment 2002-2005 showing ScottishPower
PacifiCorp customers supported 207,659 MWh of
renewable energy, equivalent to the electricity needed
to power 17,305 homes for one year.
of Energy Efficiency Commitment target achieved
achieved 171% of its Energy Efficiency Commitment PacifiCorp ranked second in customer participation,
target. third in renewable energy sales and sixth in premium
PacifiCorp offered five new demand management charged in the USA Department of Energy’s National
programmes and its demand management resources Renewable Energy ranking of 600 green pricing
totalled 14.14 MWa in energy and 73.55 MW in load programmes offered by utility companies.
in US Department of Energy’s ranking of
PacifiCorp customer participation in green
5 ScottishPower Customer Performance Report 2004/05
Structure and scope of report PPM
This report covers each of our businesses separately in order to Business overview
provide specific information on the particular issues that affect Aims and achievements
our consumers in each. This also allows for year-on-year Security of supply
comparison of our performance and activity within each business.
The structure and scope of this report is as follows:
Infrastructure Business overview
Aims and achievements
Aims and achievements
Security of supply
Security of supply
Managing energy use and impacts
Helping customers manage energy use and impacts
Advertising and marketing
Business overview This year, we report separately on two key issues which were
Aims and achievements formerly included in the Marketplace Performance Report:
Security of supply health and safety, and procurement. This decision has been made
Customer satisfaction in the light of stakeholder feedback regarding the importance of
these issues, and for ease of comparability across the business.
There are also a number of important marketplace issues that
Pricing have a significant impact on the communities we serve and on the
Helping customers manage energy use and impacts environment. These impacts are covered in the relevant Performance
Advertising and marketing Reports and we have cross-referenced where appropriate.
6 ScottishPower Customer Performance Report 2004/05
1 Business Overview ScottishPower’s Infrastructure Division owns and manages the company’s
2 Aims & Achievements
3 Security of Supply
transmission and distribution system in the UK.
4 Customer Satisfaction
5 Customer Service
6 Managing Energy Use
transport energy across our network to meet their customers’
needs. The charge we can make for this transportation service is
1 Business Overview set by the regulator, Ofgem, every five years as part of its price
Customer details Therefore neither PowerSystems nor SPT&D advertises or
The division is made up of wholly owned subsidiaries of markets to residential or business customers. Following
ScottishPower UK. It includes three companies that own assets: deregulation, customers have a direct relationship with us
SP Transmission Limited regarding faults and new connections, but otherwise the
SP Distribution Limited relationship is with their supplier.
SP Manweb plc
It also includes an asset management business: Management
PowerSystems. David Nish, Group Director of Infrastructure, had responsibility
for customer issues.
The asset-owning companies, which hold the transmission and
distribution licenses, operate as an integrated business, SP Regulatory overview
Transmission & Distribution (SPT&D). PowerSystems The UK electricity and gas industries are regulated under the
implements programmes commissioned by and agreed with provisions of the Electricity Act, the Gas Acts and the Utilities
Infrastructure Division serves residential and business The Electricity and Gas Acts privatised and restructured the
customers in two areas of the UK: Scotland and the Manweb industries in the late 1980s and 1990s. This included the
distribution area that covers Greater Manchester and North introduction of price regulation for electricity transmission and
Wales. Customers have a physical connection to our network or distribution and gas transportation, and the introduction of
“distribution highway” which they can purchase either directly competition in electricity generation, gas storage and the supply
from us or through an approved contractor. However once they of both gas and electricity. The Acts established industry
are connected to our network, they purchase electricity from licensing and created regulatory bodies for both the electricity
ScottishPower Infrastructure their chosen supplier (which may or may not be ScottishPower), and gas industries.
SP Scotland SP Manweb
and pay their bills to, and interact directly with this supplier. The energy and gas industry regulators merged in 2000 and
The supplier then has a contract with us and pays us to became Ofgem, which is responsible for granting new licences
7 ScottishPower Customer Performance Report 2004/05
or licence extensions for electricity generation, transmission, The maximum revenue we can obtain from distribution is
and distribution; and gas transportation, storage and shipping. calculated by a formula based on customer numbers and units
It is also responsible for the supply of gas and electricity and the distributed.
modification of licences. Ofgem’s principal objective is to Following extensive negotiation over recent years we have
protect the interest of customers by promoting effective agreed the Distribution Price Controls for both the
competition wherever appropriate. ScottishPower and Manweb areas (covering in full the activities
In particular, Ofgem is required to pay attention to: of all our Infrastructure business units) with the regulator for
the need to secure that all reasonable demands for electricity the next five years (2005 to 2010).
and gas are met;
the need to ensure that licence holders are able to finance Connections
their functions; and The connections we serve are based on the customers’ physical
the interests of individuals who are disabled or chronically location within our existing network in our two licence areas:
sick, or pensionable age, with low incomes or residing in rural Scotland and the Manweb area. As any one customer might
areas. have several connections, we cannot measure exact customer
Pricing and value
Our income from our distribution business depends on Connection numbers
customer demand for electricity in the areas in which we are Connection numbers at the end of the year for those areas were
licensed to operate. While other parts of the UK market, 1,988,756 and 1,484,250, respectively.
including supply, have developed competitively, the core
activities of transmitting and distributing electricity and No. of connections 2003/04 2004/05
operating the gas transportation system have not. Total 3,452,682 3,473,006
In these areas, regulatory controls are set to protect
customers and encourage efficiency. Our transmission and Scotland 1,976,639 1,988,756
distribution businesses are subject to price controls that restrict Merseyside & North Wales 1,476,043 1,484,250
either the average amount or the total amount charged for a
bundle of services.
8 ScottishPower Customer Performance Report 2004/05
2 Aims & Achievements
International Goals 2003/04 Progress against target 2004/05 progress
to be recognised for outstanding Achieve customer satisfaction in ScottishPower: 8th of 14 ScottishPower: 11th of 14
customer service and care telephone answering Manweb: 9th of 14 Manweb: 12th of 14
Monitor customer complaint levels 113 complaints 111 complaints
Improve customer satisfaction statistics Voice of the customer no longer looks at
this area of work
to provide safe, reliable power Achieve Ofgem targets for customer SP Distribution: 76.7Achieved target SP Distribution: Achieved target
underpinned by sustained investment minutes lost SP Manweb: 64.3 SP Manweb: 65.3, Failed to achieve target
in our assets and technology
Achieve Ofgem targets for customer SP Distribution: 62 ScottishPower: 64.9
interruptions SP Manweb: 51.1 Manweb: 49.1
Invest in distribution overhead lines Progress made toward target
SP Distribution: totalling £122.8 million Progress made toward target
Progress for rebuild meant that network held
SP Manweb: totalling £132.5 million exceptionally well in January windstorm
Complete major network projects ScottishPower reinforcement projects:
Pilton Dr West/Trinity
Wrexham – £6.884 million
Castle Cement – £3.454 million
to be an established pioneer of Conduct consultation on transmission 21 consultation meetings held
sustainable energy. needs to support renewable energy
9 ScottishPower Customer Performance Report 2004/05
See tables on page 11 for detailed performance information.
3 Security of Supply
We are engaged in continuing work with Ofgem and the rest
of the industry to develop the price control framework to allow
increased investment to secure the long-term safety, reliability
Background and sustainability of the electricity infrastructure in Great
We are committed to ensuring that, however the supply system Britain. We are also working to invest in developing the
evolves, our transmission and distribution system is able to network to support the UK Government’s planned expansion of
support the needs of customers. renewable energy.
Our focus with security of supply issues continues to be on cost
effectiveness and service quality. We address these through work
on the construction and refurbishment of the UK transmission and Investment
distribution systems, ongoing maintenance and related fault repair. In 2004/05 we invested over £200 million in the replacement of
The regulatory framework under which we operate provides network assets and £66 million in new customer connections
and network upgrading. This includes ongoing major network
12 of 16 financial incentives to companies that improve network
performance and customer satisfaction. We receive incentive
payments for meeting targets set for customer service measures
reinforcement projects in Edinburgh and the East Coast (£2
million), Liverpool (£5 million), Wrexham (£2 million), Bellshill
performance standards met or exceeded (£1 million), Glasgow (£1 million) and Bromborough (£1 million).
including reducing the number and duration of supply
interruptions. There are also financial incentives for providing a
quality telephone service (as measured by Ofgem’s customer Standards
survey) which ensures that customers get the information that The regulator sets targets and monitors performance among all
they need at times of interruption. licence holders. It sets targets for basic network performance as
The best measure of our success in delivering safe, reliable well as targets on the most important customer issues, known as
power to customers - and therefore building confidence in the ‘overall standards’. There are eight ‘overall standards’ that are
security of supply - is the overall performance of our system. applicable to each of our licence areas, giving us a total of 16
In 2004/05, in our Scottish licence area, our performance targets for both. Some of these are relevant to security of supply,
exceeded the Ofgem targets for customer supply interruptions and are therefore included within this section. Others are
and customer supply minutes lost. For customer minutes lost, relevant to customer service.
our performance exceeded the target by 14%. In 2004/05, our performance met or exceeded the targets set
In our Manweb licence area, our performance exceeded the for 12 of the 16 standards; leaving four areas where we failed to
target for customer minutes lost but we fell short of the target meet the performance target.
set for interruptions.
SP Distribution SP Distribution
SP Manweb SP Manweb
Ofgem Target Ofgem Target
Minutes Lost 01/02 02/03 03/04 04/05 Interruptions 01/02 02/03 03/04 04/05
10 ScottishPower Customer Performance Report 2004/05
Overall network performance targets
POWERSYSTEMS UK PowerSystems Ofgem Target
NETWORK PERFORMANCE UK region 2001/02 2002/03 2003/04 2004/05 (by 2004/05)
Customer Minutes Lost SP Distribution 85.3 74.1 76.7 74.9 87.7
SP Manweb 62.4 112.1 64.3 65.3 65.8
Customer Interruptions SP Distribution 66.5 65 62 64.9 66.4
SP Manweb 51.4 51.9 51.1 49.1 47.2
The following table details our performance on the overall standards relevant to security of supply.
Overall Standards UK PowerSystems 2001/02 2002/03 2004/05 2004/05 2005/06
UK Region Performance Performance Target Performance Target
EOS1: Supply Restoration SP Distribution 86.01% 99.96% 99.82%
(18 hours) SP Manweb 86.11% 99.61% 99.57%
EOS2: Voltage Complaints SP Distribution 99.77% 98.93% 98.43%
(6 months) SP Manweb 96.30% 95.91% 95.09%
EOS5: Multiple Interruptions SP Distribution n/a 99.53% 98.60%
SP Manweb n/a 99.64% 98.92%
EOS9a: Pre-Payment Meters SP Distribution n/a 99.94% 99.65%
(Weekdays) SP Manweb n/a 99.90% 98.59%
EOS9b: Pre-Payment Meters SP Distribution 100% 100% 99.29%
(Weekends) SP Manweb 100% 100% 100.00%
produces league tables for a number of key customer issues.
Ofgem explores the levels of service that customers receive
£132,000 4 Customer Satisfaction
In 2004/05, we used two pieces of research to explore
when reporting faults and calling emergency numbers. Ofgem
distributes incentives for good performance and imposes
penalties for poor performance.
received in incentive payments
customers’ service needs: In 2003/04 both our Manweb and ScottishPower licences
information from Ofgem, the industry regulator, and received incentives totalling £132,000. In 2004/05, however,
information from an external research company regarding our Manweb area incurred a penalty charge estimated at
customer service throughout the PowerSystems business; £40,000 for its performance on answering the telephone. We
including network faults, maintenance of substations and identified the causes of the problem, which included a blockage
supply quotations. in the flow of information from our field staff to front-line call
We monitor our performance with regards to customer centre staff. We are working to improve our performance in this
satisfaction both internally, and externally, through comparison area, and to provide better information for customers regarding
with other utility companies reporting to Ofgem. Ofgem faults.
11 ScottishPower Customer Performance Report 2004/05
Ofgem’s telephone answering rankings placed ScottishPower
11th and Manweb 12th out of the 14 licencees. More
information is available at Ofgem’s website www.ofgem.gov.uk.
Customer research conducted in our connections and
5 Customer Service
maintenance businesses in 2003/04 highlighted a number of Terms of business
issues that are being addressed as part of ongoing improvement Customers have a direct relationship with us regarding faults
plans, including work on improving our communication with and new connections but otherwise their relationship is with
customers. We are continuing to refine our approach in this their suppliers.
area and expect that results of this work will come in 2005/06.
Standards and guarantees
As discussed earlier, the regulator sets eight ‘overall standards’ for customer issues, some of which are relevant to customer service
and are therefore included here.
Overall Standards UK PowerSystems 2001/02 2002/03 2004/05 2004/05 2005/06
UK Region Performance Performance Target Performance Target
EOS3(a): New Connections SP Distribution 100% 100% 100%
(30 working days) SP Manweb 100% 100% 100%
EOS3(b): New Connections SP Distribution 100% 100% 100%
(40 working days) SP Manweb 100% 100% 100%
EOS4: Customer Letters SP Distribution 75.30% 89.42% 90.75%
(10 working days) SP Manweb 97.34% 99.07% 95.83%
We also make guarantees to our customers that we will reach a certain level of service in some areas.
2001/02 2002/03 2003/04 2004/05
Success rate Success rate Success rate Success rate
EGS1: Fuse Failures (3 hours/4 hours) 99.90% 98.90% 99.94% 99.67%
EGS2: Supply Failures (18 hours) 99.90% 99.90% 99.99% 99.99%
EGS2a: Multiple Interruptions (new standard) n/a 95.10% 97.83% 96.45%
EGS3: Estimate of Connection Charges (5 weekdays) 100% 97.70% 99.93% 99.99%
EGS3: Estimate of Connection Charges (15 weekdays) 100% 99.80% 100% n/a
EGS4: Planned Interruptions (5 days) 99.90% 99.80% 99.90% 99.93%
EGS5: Voltage Problem Complaints 99.70% 99.90% 99.53% 99.90%
EGS7: Faulty Prepayment Meters 99.70% 99.90% 99.82% 99.77%
EGS8: Appointments 99.90% 99.90% 99.84% 99.99%
EGS9: Compensation Payments (10 weekdays) 97.50% 97.40% 93.08% 97.15%
12 ScottishPower Customer Performance Report 2004/05
Complaints Complaints to energywatch dropped from 125 in 2003/04 to
The main categories of customer complaints include: 111 during 2004/05 and we aim to reduce this to 80 in 2005/06.
loss and damage to machinery and appliances as a result of
supply interruption; Customers with specific needs
lack of notification for supply interruption, and As part of our licence requirement, we maintain a register of
site conditions following engineering work by ScottishPower customers who have a medical dependency on electricity, such
or our contractors. as those on dialysis; and those who have special
We track both complaints made directly to us and those communications needs, including those who are blind or deaf.
made to energywatch about us. While we cannot predict or prevent unplanned supply
Our regulatory complaint levels have been declining in recent interruptions, we work in partnership with relevant Local
years, thanks, in part, to our efforts to track and monitor the root Authority health officials to care for those at risk during power
causes of the problem in order to avoid repeat complaints. interruptions.
energywatch complaints per
2002/03 2003/04 2004/05 2004/05 2005/06
1,000 customers performance performance target performance target
Energywatch complaints (total) 294 125 113 111 80
Energywatch complaints (as rate in number
of complaints per 1,000 customers) 0.086 0.036 0.033 0.032 0.023
centres of demand. While the network is able to deal with
Managing Energy Use current levels of renewable energy, it would not be able to deal
6 and Impacts
with the increased level expected over the next few years. We
are working with government and others to address this, and
Green energy initiatives we have developed a plan to boost the capability of our
We are committed to supporting the renewable energy targets transmission network to handle additional renewable resources.
that form part of the UK Government’s efforts to tackle climate More information can be found on the DTI website at
change. The target is for 10% of electricity supplies within the www.dti.gov.uk/energy and from Ofgem’s “Transmission
UK to be generated from renewable sources by 2010, and a Investment for Renewable Generation” consultation documents
further 5% by 2015. located online at www.ofgem.gov.uk.
The transmission network owned and operated by
ScottishPower will be used to transmit renewable energy to
13 ScottishPower Customer Performance Report 2004/05
1 Business Overview As an active market participant, we engage fully in regulatory
2 Aims and Achievements and contractual debate, and we played an active part in the
Security of Supply
1 Business Overview consultation processes that followed the UK Government’s
2003/04 review of energy policy.
5 Customer Service ScottishPower’s UK Division is an integrated energy generation Customer numbers
6 Pricing and supply business. The division consists of five wholly owned We gained 865,000 customers in 2004/05, bringing our total
7 Helping Customers Manage subsidiaries involved in a range of activities related to the number of customers to 5.1 million. This is a 20% rise on
Energy Use generation and supply of energy to our customers. These 2003/04.
8 Advertising and Marketing activities include: electricity generation, wholesale activities,
activity to balance the market, retail sales and service, data No. of services (millions) 2003/04 2004/05
management and metering.
TOTAL 4.25 5.1
The UK Division has the capacity to generate 6,200 MW of
Electricity 2.85 3.31
coal, gas, hydroelectric and wind power.
residential 2.66 3.1
business 0.19 0.21
Gas 1.4 1.83
Willie MacDiarmid is Managing Director of Customer Sales
residential 1.38 1.81
business 0.02 0.02
Jim Paterson is the Director of Sales and Marketing
Keith Anderson, is UK Division Strategy Director and serves
on the Group CR Steering Committee
Our licences to operate are granted by the energy regulator
Ofgem (the Office of Gas and Electricity Markets). Ofgem
monitors our compliance with the requirements of the licence,
and we submit a number of regular performance reports to
Ofgem as part of our licence commitment. This includes reports
on our performance against our customer Codes of Practice.
Our performance regarding customer complaints is also Electricity 3.31
monitored externally through energywatch. Gas 1.83
new customers in 2004/05
14 ScottishPower Customer Performance Report 2004/05
2 Aims & Achievements
International Strategic Goal Key Measure Progress in 2003/04 Progress in 2004/05
To be recognised for Marketing for diversity Special services continuing for priority group customers (under Special services continuing for priority group customers (under
outstanding customer service licence) including older people, disabled people and vulnerable licence) including older people, disabled people and vulnerable
and care customers. Services are detailed in our Special Needs Code of Practice. customers. Services are detailed in our Special Needs Code of Practice.
Customer communications available for lesser-used languages. Continue services and maintain database of multi-lingual staff members.
Focus on customer needs Improving service levels: Based on Voice of the Customer research and Improving service levels: Based on Voice of the Customer research and
the continued delivery of process improvements through 13 major the continued delivery of process improvements through Six Sigma
ongoing Six Sigma projects in 2003/04. projects and the embedding of the process control framework to ensure
continuous improvement in Voice of the Customer ratings.
Customer satisfaction levels maintained during 2003/04. Customer satisfaction levels have been maintained during 2004/05.
Two new products launched. Three new products were launched in line with customer requirements
– Price Tracker (solus and dual fuel) where prices are maintained at a
fixed and lower percentage when compared to the equivalent offer
from British/Scottish Gas and a two-year fixed SME product. We also
introduced our new online service that provides a much improved
online sign up and information service.
New bill design introduced in May 2005 makes relevant information
easier to find and which provides a clear breakdown of how the bill is
Deliver customer savings Despite rising wholesales gas and electricity prices ScottishPower has We offer value-driven products to minimise the impact on customers of
continued to offer customer savings against our competitors. the continued uncertainty of rising wholesale gas and electricity prices.
Manage customer complaints Reduced overall energywatch complaints by over 35% year on year. We continue to improve our performance in dealing with customer
Led the industry in the introduction of the EnergySure good practice ScottishPower continues to be a driving force behind the success,
standards in selling gas and electricity contracts. sustainability and ongoing development of this initiative, leading the
way in the roll out of EnergySure’s best practice guidelines to telesales
and small business channels as well.
Look after our most We address the needs of vulnerable customers through programmes The ScottishPower Energy People Trust established to help combat fuel
vulnerable customers that encourage energy efficiency and customers’ control of their energy poverty by funding projects and schemes focussing on children and
use. We work creatively to help address the root causes of fuel poverty young people.
from specialised bill payment plans involving debt reduction and
education, to helping customers understand and afford ways to help
reduce their energy consumption.
To be an established pioneer Meet our Energy Efficiency Met 88% of our three-year target. Completed our EEC1 campaign for 2002 -2005 by exceeding our target
of sustainable energy Commitment Target by 71%.
15 ScottishPower Customer Performance Report 2004/05
Overview of latest results
Of the weighted attributes that we measure, 56 have remained
3 Security of Supply steady over the last year, six have improved and 10 have
declined. We continue to seek customer input and to design
The UK Division operates 6,200 MW of generating capacity, programmes based on customer feedback.
consisting of coal, gas, hydroelectric and wind power generation, ScottishPower came top of Datamonitor’s annual survey of
to meet the needs of customers and the market in the UK. Industrial and Commercial customers and was ranked highest
920 mW We are committed to meeting the Government target of
obtaining 10% of our supply from renewable sources by 2010
and to continually contributing to the debate regarding the need
for price and value in JD Power & Associates’ domestic gas
of wind energy in planning, in addition to 158 mW
of operational windfarm capacity to encourage investment in new energy generation to ensure the
ongoing security of the UK’s energy supply.
Renewable energy sources currently comprise 2.5% of
our generation portfolio. We are continuing to expand our
5 Customer Service
windfarm business to meet public policy objectives for Terms of business
renewable energy. As of March 2005, we had operational All ScottishPower customers are supplied under contractual
windfarms with the capacity to generate 158 MW of energy, and terms and conditions that are specified by Ofgem within our
planning applications for a further 920 MW of capacity. We Gas and Electricity Supply Licences. All customers are provided
have also begun environmental assessments on around 63 MW with a copy of these full terms and conditions during the sales
of further potential sites. process, and all domestic customers can review them on our
A further requirement of our licences is that we publish, and
adhere to, a number of Codes of Practice. These provide advice
4 Customer Satisfaction and guidance for customers on issues such as how to pay their
62 of 72 Research methods
We use ‘Voice of the Customer’ research to measure our
bills and how to use less energy, and also provide information
on the special services that ScottishPower offers to customers
with special needs. We have separate codes covering:
weighted customer service attributes remained customer satisfaction performance. This research consists of handling complaints;
steady or improved in 2004/05
telephone surveys with customers to assess which areas of how to use gas and electricity more efficiently;
service are most important to them. help and advice for customers with special needs;
We have used this research to establish the relative paying your bill;
importance of different service areas, and we measure our visiting your premises, and
performance accordingly. services for prepayment customers.
We measure perceived satisfaction in 27 areas, which include These codes were updated in December 2004 to be brought
reliability of supply and meter reading. Twenty-five of these in line with current business practices and to be made
areas also form part of the 72 weighted service attributes (such consistent with the ‘energy people’ branding. Codes are
as meter reading accuracy and the knowledge of our staff) that available on request and online at www.scottishpower.co.uk.
we monitor continually.
In response to customer feedback, we have introduced a new Retention & loyalty
bill, which makes relevant information easier to find and which We work to understand customer loyalty in a variety of ways.
provides a clear breakdown of how the bill is calculated. We use Voice of the Customer research, losses research and
16 ScottishPower Customer Performance Report 2004/05
Voice of the Competitor research to: We also have to meet certain overall standards of service,
98.4 to 100% assess the effectiveness of retention marketing activity, and
help us continually plan customer retention activities.
which show how we have performed against targets set by the
Regulator in essential areas of our business. We track and
success rate on overall standards of service We aim to offer value for money, cost reflective pricing and monitor our performance on these standards, and in 2004/05
do not discriminate price offers between new and existing our performance ranged from 98.4% to 100%, compared to
customers. 97.8% to 99.8% in 2003/04.
Our processes for monitoring our performance have reached
Standards & performance the highest possible quality standards and are included in our
Guaranteed Standards are set by the Regulator to ensure that ISO 9001 2000 certificate for quality management.
customers receive a minimum level of service. We monitor our We report information on our performance to the Regulator,
service against these standards, and compensate customers and the independent organisation energywatch is responsible
when we fail to meet them. Our 2004/05 performance in for publishing the performance achieved by all suppliers.
Customer Sales and Service ranged from 98.49% to 99.97%,
compared to 97.56% to 99.98% in 2003/04.
17 ScottishPower Customer Performance Report 2004/05
Guaranteed Standards (supply and metering) UK
Guaranteed Standards 2003/04 2004/05
(supply and metering) UK Detail success rate success rate
Faulty prepayment meters Responding when prepayment meters are reported faulty
and the customer has no supply 98.98% 98.49%
Compensation payments Payment of compensation to customers within timescales 97.56% 98.57%
Faulty meters Investigating the accuracy of a meter 99.80% 99.92%
(domestic customers only)
Questions about an Responding to questions about electricity bills in a timely and
electricity bill accurate manner 99.98% 99.97%
Appointments Making and keeping appointments 99.03% 98.81%
Overall Standards (supply and metering) UK
Overall Standards 2003/04 2004/05 2004/05 2005/06
(supply and metering) UK Detail performance target performance target
Putting a supply back on This only applies to supplies cut
(after cutting it off) off due to bill non-payment. When
the amount owed is paid, or an
arrangement to pay is made, the
supply should be put back on
within 24 hours. 99.62% 100% 100.00% 100%
Moving a meter If a customer has a low voltage
supply and asks us to move their
meter, we will do this for all
customers in 15 working days. 97.78% 100% 100.00% 100%
Changing a meter After a customer asks us to change
the way we charge for electricity,
we will fit a suitable replacement
meter inside 10 working days. This
applies to all domestic customers. 99.76% 100% 99.88% 100%
Prepayment meters If a customer tells us that their
domestic prepayment meter is not
working, we will arrange a visit from
a properly qualified person to repair
or replace it.
within three hours on working day
(electricity), four hours (gas) 98.95% 98% 98.48% 98%
within four hours on any other day
for both electricity and gas meters 99.08% 95% 98.54% 95%
18 ScottishPower Customer Performance Report 2004/05
Selling establishing an Independent Dispute Resolution body to
EnergySure, which seeks to promote best practice in energy address account and billing disputes where the customer is
selling, has developed a training and accreditation scheme for unable to resolve the dispute with the supplier; stopping seeking
energy sales staff. This aims to improve customer satisfaction payment from customers for any energy supplied where the
and reduce the number of complaints about selling practices supplier at fault for not billing the customer for two years
within the industry. In response to this, the Association of (falling to one year from July 2007); and reviewing the term and
Energy Suppliers (AES) developed a Code of Practice that conditions in their supply contracts to ensure they are simple,
provides a framework for accreditation. ScottishPower comply with customer rights legislation and are not biased in
continues to be a driving force behind the success, sustainability suppliers’ favour. We are discussing these findings with Ofgem
and ongoing development of this Code. and other suppliers to ensure delivery of these actions by
Although the scheme was launched primarily with door-to- summer 2006.
door selling in mind, ScottishPower led the way in rolling out
drop in direct selling complaints since EnergySure’s best practice guidelines to telesales and small Customers with individual needs
ScottishPower launched Association of Energy business channels as well. Our sales force is rigorously trained As part of its corporate strategy for 2003-2006, Ofgem reviewed
Suppliers Code of Practice
and its performance is managed to ensure a high standard of the effectiveness of the service provided to Priority Register
competence. customers, defined as customers who are of pensionable age,
This is reflected in the reduction in direct selling complaints disabled or chronically ill.
about ScottishPower to energywatch by 96.3% since the launch Each electricity and gas supplier and distribution network
of the Code. For more information, see www.energywatch.org.uk. operator in the UK has licence obligations to maintain a register
To reinforce our commitment to this Code, we have of these customers. At the end of March 2005, we had 23,294
committed to compensate any customer who is a victim of fraud gas and 39,585 electricity customers on the voluntary register.
by bogus callers with a fixed sum of £250. When a customer joins the register we arrange for bills and
correspondence to be put into an alternative format if needed,
Complaints and we pass details of the customer’s special needs to their local
The number of overall energywatch complaints has fallen by distribution company. There are also a variety of different
0.63% on a year-by-year basis. Complaints per 1,000 customers approaches to debt problems that we consider with customers
fell from 1.58 to 1.57 in the year, despite continued sustained on the register, and we arrange a home visit to discuss problems
growth in customer numbers. if necessary.
A super-complaint on billing was filed during the year. ScottishPower sponsored research with Energy Action
per 1,000 customers, a 0.63% reduction Ofgem published its response to the complaint in July 2005, Scotland on prepayment customers with debt or payment
calling on energy suppliers to deliver in three key areas: problems.
Quarter 4 2004/05
Complaints ScottishPower Industry average
Direct sales (per 1,000 transfers) 0.14 0.13
Account & billing (per 1,000 transfers) 0.097 0.068
Transfer (per 1,000 customers) 1.37 1.4
19 ScottishPower Customer Performance Report 2004/05
Tea time right time for efficiency in the domestic market. The target, set by Ofgem, is to
Helping customers understand how they can
achieve 62 TeraWatt-hours – one thousand gigawatt hours
(GWh) – of fuel-standardised lifetime discounted energy
savings, which will make a significant contribution to carbon
Information on pricing and value
reduce energy use can be difficult – people don’t savings in the UK Government’s Climate Change Programme.
We are committed to setting sustainable and competitive energy
see the energy they use or waste. This year we We completed our Energy Efficiency Commitment (2002 to
prices for all our customers, to help us retain existing customers
worked with The Scottish Executive to help people 2005) in March and have exceeded our targets by 71%
and attract new ones. Pricing depends on a customer’s location,
in Scotland understand in down-to-earth terms how delivering significant energy savings in the domestic sector.
payment method and the services that they take from us.
savings can add up. Nothing’s more down-to-earth These savings have been achieved by promoting and installing
Like other suppliers in the energy marketplace,
than a cuppa. discounted energy efficiency measures, such as cavity wall
Scots drink more than 100 million cups of tea, ScottishPower has continued to face challenges as the
insulation and low-energy lighting.
coffee and hot chocolate every week, enough to fill competitive energy market in Great Britain develops, including
The second phase of the Energy Efficiency Commitment
10 Olympic-sized swimming pools. And that’s just a continued rise in the cost of wholesale energy.
(EEC2) was implemented in April 2005 and will end in March
what’s consumed. Each day kettles across the In the wholesale market overall, gas and power prices have
2008. We intend to at least double our energy savings during
country are overfilled, and each one wastes enough increased significantly over the last year, with gas prices
this new phase.
energy in a week to light a house for a day. increasing by 74%, and power by 67%.
We also encourage energy efficiency through our advisory
ScottishPower and the Executive launched an During 2004/05, an average gas and electricity customer,
staff who are trained and qualified to the City and Guilds
awareness-raising campaign, urging Scots to “Do A consuming 3,300 kWh of electricity and 20,500 kWh of gas, and
standard as a minimum. Our advisors and call centre operators
Little, Change A Lot”. They filled 800 cups as a paying by direct debit, would have paid about £630.96. An
receive ongoing training to help them identify characteristics
demonstration and visited shopping centres across average customer, paying on receipt of a quarterly bill would
that would indicate the need for specialist help; either from our
Scotland to encourage people to think about have paid about £674.96 (as at March 2005). Both figures
energy efficiency advice helpline, or from any one of a number
simple ways to reduce their use. include value-added tax at the 5% prevailing rate. This
of external agencies to whom customers could be referred.
compares with £536.20 and £566.65 in 2003/04.
Our induction training for newly recruited call centre staff
Further information on energy price comparisons can be
includes an Energy Efficiency awareness training module. Our
found at www.energywatch.org.uk.
advisors provide advice on all aspects of domestic energy
We continue to offer a range of products to our customers,
efficiency, including: home insulation measures; draught
including our Capped Gas and Electricity offer and Online
proofing; heating controls; low-energy lighting; grant funding,
Energy, which reflect our commitment to value for money. For
and details on other sources of information.
full details of ScottishPower’s prices, please visit us online at
The latest figures indicate that the total number of households
Helping Customers Manage in fuel poverty in the UK in 2003 is estimated to stand at 2
7 Energy Use
million. A household in fuel poverty is defined as spending 10%
or more of their income on energy.
2 million Energy efficiency initiatives
We are committed to encouraging energy efficiency, and run a
number of activities to help us meet this objective.
We estimate that among our customers, we supply a number
of fuel poor households. Exact figures are not available since
identification of these households requires a variety of personal
households in fuel poverty in UK in 2003
The Energy Efficiency Commitment (EEC) is a Government details to which we do not have access. However, we can
scheme with the objective of reducing CO2 emissions and assume that the number is likely to be in line with the national
encouraging customers to become more energy efficient. Under average of around 10% to 11% of our customer base.
EEC, energy suppliers promote improvements in energy This year we have undertaken a strategic review of fuel
20 ScottishPower Customer Performance Report 2004/05
Citizen’s Advice Bureaux poverty. That has included recruiting a new Head of External Action Scotland (EAS) and National Energy Action (NEA);
business/community relations with significant fuel poverty supporting a study into self disconnection and Warmth for the
This year we worked closely with Citizen’s Advice expertise, and convening an internal weekly Fuel Poverty Task Millennium which is dedicated to helping to end fuel poverty
Bureaux (CAB) to provide information and Force meeting involving representatives from across the for 2,000 households, and
assistance to customers facing challenges paying business. The Task Force considers the impacts of business being the energy partners for the Dundee Community Energy
their bills. We provide training and information, as
decisions on the fuel poor and vulnerable customers. Partnership and the Newcastle Warm Zone.
well as dedicated internal phone staff to support
An Ofgem report released in mid-2005 recognised using our dedicated team of Community Liaison Officers
CAB employees in advising vulnerable customers
ScottishPower’s efforts in combating fuel poverty, while (CLOs) who provide face-to-face customer contact and
and those facing financial hardships.
acknowledging the company and industry could be doing more. assistance to help vulnerable customers and to train other
As CABs provide a one-stop shop for resolving
ScottishPower undertook a study of fuel poverty, which we employees on recognising special needs.
clients’ needs, we worked directly with them to be
believe to be the first study of its kind, measuring dedicating a large proportion of investment under our energy
sure that other needs are met, such as debt
understanding, awareness of and attitudes towards fuel poverty efficiency commitment towards low-income households and
counselling and access to benefits. We piloted a
in Scotland. We also asked how individuals should be assisted use strategic partnerships with local authorities and housing
programme offering specialist support to CAB
and who is responsible for the issue. The research is not associations to maximise the social impact of our energy
advisors with 10 CAB offices in Scotland and 10 in
representative of the population as a whole, but gives some efficiency activity.
the North West. We rolled out the programme,
insight into public views regarding fuel poverty: working with Citizen’s Advice Bureaux to provide
along with dedicated email and postal address, to
15% of Scottish population lives in fuel poverty, with levels information and assistance to customers.
all offices in Scotland and the North West in April
increasing to 20% in the lowest social classes and 26% of Central to this strategic work, ScottishPower is establishing a
2004. This group of specialist staff handle debt-
pensioners. charitable trust fund with a Board of independent appointed
related calls, as well as billing and sales or transfer
Energy is basically a lifestyle requirement, although more trustees, £1 million has been committed for 2005. The fund’s
inquiries coming through CABs.
than simply heating and cooking. The television is often objective is to support projects to help combat fuel poverty, with
We’ve handled nearly 900 call and over 700
central to the fuel poor, described as a ‘lifeline’, ‘access to the a key focus on children.
written inquiries since starting the service. We are
now working to rollout the dedicated contact points outside world’ and ‘providing for the family’
to all CABs, partnering with the local credit union in Compromises are made to fund energy, including Disconnections
Runcorn to move vulnerable customers to a economising on food. The approach to disconnections in the UK differs to that in the
cheaper tariff and onto direct debit, advising all Responsibility is not perceived to lie with any one US, where regulatory commissions set rules and monitor
customers with outstanding bills of the CAB organisation, although the Government (national and local) adherence to disconnection policies. In the UK the level of
contact number so they can get hep, avoid is perceived to be centrally important to all levels, particularly disconnections has declined considerably since the energy
disconnection and receive a benefits health check. in relation to subsidising energy for the elderly. market was deregulated.
Market experts acknowledge that huge ‘in roads’ have been We recognise the need to help protect vulnerable
made, particularly in raising the profile of fuel poverty households and are active in an industry group including
amongst the industry and Government. However, ‘everyone Ofgem and other relevant agencies which are discussing
could do more’. further appropriate improvements to disconnections policies.
We are developing strategies for addressing fuel poverty. Some We are piloting a number of initiatives with the Citizens
of our work in this area includes: Advice Bureau to provide assistance for consumers with utility
the development of a fuel poverty helpline in collaboration related debts, including a dedicated helpline for bureau staff
£1 million with others in the industry under the direction of the Energy
Retail Association (ERA);
and sponsorship for a utility debt project in Liverpool.
After consultation with Ofgem, we voluntarily extended our
committed to newly established Energy People participation in the Scottish Executive’s fuel poverty forum; policy of not disconnecting older customers over the winter
Trust to help combat fuel poverty in the UK attending the Parliamentary Warm Homes Group meetings; months so that it now applies throughout the year.
involvement with fuel poverty organisations such as Energy
21 ScottishPower Customer Performance Report 2004/05
Number of disconnections communications with our in-house legal department to ensure,
During 2004/05, 351 customers were disconnected for debt. as far as possible, that they conform to the British Code of
Full details on industry disconnection statistics are reported Advertising, Sales Promotion and Direct Marketing which
within the Social Action Plan area of the Ofgem website at includes guidance on the advertising of utilities.
www.ofgem.gov.uk. This year we had one Advertising Standards Authority ruling
against ScottishPower. The ruling followed a complaint about
Green energy initiatives our claim in a regional press advertisement that customers
Customer interest in renewable programmes continues to rise. could save up to £130 on gas and electricity. This figure had
This year we more than doubled sales of our Green Source been calculated from internet calculations offered on the
renewable supply option for businesses, and increased the uSwitch broker site. The ASA found that because the data on
number of services provided to customers under domestic which the savings claim was based included only uSwitch
Green Energy packages by a third. This growth has been customers who had made savings, and excluded uSwitch
achieved through our increased focus on environmental issues customers who had not made savings, it was not representative
and an integrated communications programme. of all customers and was therefore misleading. By the time the
ruling was raised, the advert had run its course and the ad will
not be used again. Future savings statements will not be
Advertising and calculated on this basis.
Two further complaints were resolved informally without the
need for a full adjudication before the ASA Council. In one we
We try always to ensure that our marketing communications are agreed that all advertising copy would notify customers of a
legal, decent, honest and truthful. restriction in domestic gas use to a maximum of 73,268 KWh. In
We gain approval for all ScottishPower TV advertisements the other we agreed to include a reference to the price
from Ofcom’s Broadcast Advertising Clearance Centre and all protection fee associated with our Capped Price products in the
radio advertising by Radio Advertising Clearance Centre prior main copy of any advertisement, with a qualifier indicating the
to airing. We also review all print-based advertising and written actual sums payable.
22 ScottishPower Customer Performance Report 2004/05
1 Business Overview Hydro Under construction
2 Aims and Achievements
3 Security of Supply PPM Energy President and CEO Terry Hudgens has overall
customer resaponsibility. Other senior executives with
4 Green Energy
PPM serves a small number of wholesale customers, energy oversight for customer issues or interactions include:
aggregators and large commercial and industrial customers Matt Morrow, Senior Vice President, Gas Storage & Hub Services
across North America with wind energy and natural gas. These Peter van Alderwerelt, Senior Vice President, Business
customers go on to serve homes, businesses and communities Development & Origination
throughout North America. Allan Query, Vice President, Construction & Operations
Don Winslow, Vice President, Policy & Regulatory Affairs
Overview of types of customer and business Jean Wilson Vice President, Renewable Business Development
Across the country, many utility companies are faced with an Regulatory overview
unprecedented level of price volatility and regulatory Because PPM does not conduct retail electricity operations, it is
uncertainty. The principal issues within the energy market are: not subject to the same state public utility commission
cost-competitive renewable enegry; regulation as PacifiCorp. However certain of its wholesale
integrated energy management, and activities are regulated by the Federal Energy Regulatory
leading gas storage services. Commission (FERC) and the state commissions impose certain
limitations on affiliate transactions. In addition, PPM’s gas
Public Power Authorities & Public Entities storage activities in Texas are subject to regulation by the FERC
Public Power Authorities, Municipalities and Cooperatives face and the Texas Railroad Commission and those in Canada by the
unique issues in navigating today’s energy market. In many cases, Alberta Energy and Utilities Board.
Municipalities and Cooperatives are leading the way in the
purchase of renewable energy to demonstrate their commitment Customer code
to environmental stewardship but also to avoid fuel price volatility. PPM voluntarily reports on its natural gas and electricity
Principal business issues are: cost-competitive renewable energy, transaction data to index developers. As part of a commitment
integrated energy management, leading gas storage services, to transparent price reporting, PPM and its employees follow
customer retention, cost control and risk mitigation. the EPSA Code of Ethics and Sound Trading Practices for
Electric Power Suppliers.
Land Owners All employees and the public can view this Code of Conduct
The success of PPM’s wind energy development programme is on our website (www.ppmenergy.com).
contingent on our ability to establish successful, long-term
relationships with landowners.
23 ScottishPower Customer Performance Report 2004/05
24% annually 2 Aims & Achievements
growth in wind power over the last five years in US Strategic Goal Key Measure 2004/05
according to American Wind Energy Association
To be an established pioneer of Achieve 2,300 MW of new wind online 831 MW wind power operational
sustainable energy by 2010 574 MW wind power under construction
Achieve 125 BCF of natural gas storage 80.5 BCF
CEERT – California
3 Security of Supply Independent Energy Producers – California
$1.6 billion We are committed to developing a secure supply of renewable
energy and natural gas storage. Our gas storage open seasons
Kern County Wind Energy Association – California
Colorado Independent Energy Association – Colorado
Independent Power Producers of New York
earmarked for investment in new wind capacity
by 2010 show that demand for gas storage is increasing as customers Windpower NY – New York
seek ways to deal with natural gas price volatility. The Wind Coalition – Texas
As a part of this commitment to helping wholesale customers
cope with energy cost and supply uncertainty, PPM has a 9,000-
MW pipeline of windfarm development. ScottishPower expects to
invest approximately $2.4 billion of capital in PPM to 2010. This
includes $1.6 billion for new wind capacity, taking PPM’s total
4 Green Energy
wind portfolio to some 2,300 MW from its current operating Wind
portfolio of 831 MW. Also included is $800 million for new gas PPM is the largest wind developer in the US for the year with
storage capacity, moving PPM from a total of 80.5 BCF of owned 574 MW of wind energy under construction and due in the 2005
6% or contracted natural gas storage to about 125 BCF, also by 2010. calendar year. According to the American Wind Energy
Association (AWEA), US wind power plants served more than
American Wind Energy Association estimates that Membership of national and regional advocacy groups 1.6 million average households with 4.3 million people, and
the wind industry is capable of supplying 6% of US PPM is a member of a number of advocacy groups including: topped 6,740 megawatts in 2004. In 2005, that number is
electricity needs by 2020, as much as hydropower National: expected to jump to more than 9,000 megawatts serving over
generates today American Wind Energy Association (AWEA) 2.3 million households with 6 million people. AWEA estimates
The Bats and Wind Energy Cooperative that the wind industry is capable of supplying about 6 percent of
US electricity needs (as much as hydropower generates today)
Regional: by 2020. Wind power, according to AWEA, is one of the fastest
Renewable Northwest Project – Oregon and Washington growing energy sources on a percentage basis over the last five
Wind on the Wires – Midwest years (24% annually in the US).
West Wind Wires – West
Northwest Energy Coalition – Northwest Development of wind facilities and markets
Interwest Energy Alliance – Western States We develop wind power facilities across the US, from site
24 ScottishPower Customer Performance Report 2004/05
acquisition and wind measurement to turbine construction and Environmental impact of wind power
leadership the installation of sub-stations. We have worked successfully
with landowners, permitting agencies, communities, local
We perform extensive environmental impact studies evaluating
existing land use as well as assessing the impact on birds, bats,
PPM received a leadership award in green power governments, environmental agencies, customers and financial rare plants, and waterways to determine whether a site is
purchasing from US Environmental Protection institutions. PPM’s wind team has extensive experience in suitable for a wind farm. We select and design wind
Agency (EPA), the US Department of Energy (DOE), meteorology, development and marketing. developments such that impact is minimised.
and the Center for Resource Solutions (CRS)
We both develop wind resources and also develop the market PPM offers Green-e certified wind energy products. Green-e
for wind. This involves creating the demand – and, therefore, is a voluntary certification program for renewable electricity
the market – for wind by working with potential customers to products that sets consumer protection and environmental
help them understand how wind power can fit their needs. standards for electricity products, and verifies that Green-e
certified products meet these standards.
Addressing questions Based on their 2003 verification results from their website,
1 square mile On the customer side, we have worked to resolve the big
questions about wind power: Isn’t it more expensive? How
does it integrate into existing systems? How do you count on
in 2003, 102 companies offered 65 Green-e products. Green-e
renewable sales increased by 76% in 2003 over 2002 and
of forest planted is equivalent to CO2 displaced by each wind when the resource is intermittent? How do you plan for reached a total of 2.9 million MWh. 41% of non-utility green
1-MW wind turbine
transmission? power retail sales in the US were certified by green-e in 2003.
One way we address these issues is to work with customers to Green-e certified REC sales experienced a 12-fold expansion in
slowly integrate wind resources into their portfolios to build their 2003 compared to 2002.
comfort level and experience. Though the wind itself is With rising cost and volatility of energy, wind power also
18 states intermittent, PPM offers customers a firm product by balancing
the load, allowing customers to buy wind as a firm and
dependable energy source. PPM is currently expanding the
provides economic benefits, including being “inflation-proof” –
once a wind plant is built, the cost of energy is known, and is
not affected by fuel market price volatility.
and the District of Columbia have geographic breadth across the United States – adding to its When the Colorado Public Service Commission issued a
targets to meet a certain percentage of
existing presence in the West and the Midwest by moving into the ruling in 2001 on the wind project in Lamar, Colorado (jointly
their loads with renewable energy
Northeast in 2004 with the acquisition of Atlantic Renewables. owned by PPM and ShellWind Energy), it determined that wind
On the market side, we have worked with industry bodies to energy provided the lowest cost of any new generation resource
improve conditions for the development of renewable submitted to an Xcel Energy solicitation bidding process (except
resources. Since 1992, the Production Tax Credit (PTC) for for one small hydro plant), according to the US Department of
renewables has been renewed four times. The PTC is designed Energy. The commission also noted that unlike the other
to promote the development of domestic wind energy by generation resources considers, the Lamar project avoided the
Given the global focus on climate change, wind providing a tax credit of 1.9 cents/kWh (with an escalator for risk of fuel prices increasing in the future.
power’s benefits are numerous: a single 1-MW wind inflation) to project owners during the first 10 years of wind
turbine displaces 1,800 tons of carbon dioxide farm operation. The PTC gives wind energy benefits similar to
each year (equivalent to planting a square mile of those that apply to fossil fuels such as oil and gas tax.
forest), based on the current average US utility fuel We have also entered states that have set targets for the
mix – over 20 years, that replaces 29,000 tons of utilities to meet a certain percentage of their loads with
coal (a line of 10-ton trucks 11 miles long) or renewable energy. These targets (which are referred to as
92,000 barrels of oil. Renewable Portfolio Standards) have passed in 18 states and
Source: (AWEA) the District of Columbia, including California and New York.
25 ScottishPower Customer Performance Report 2004/05
1 Business Overview ScottishPower Board-level responsibility for PacifiCorp,
2 Aims and Achievements including customers;
Security of Energy Supply
1 Business Overview Rich Walje and Andy MacRitchie both represent PacifiCorp
on the ScottishPower Corporate Responsibility Steering
5 Customer Service PacifiCorp became part of the ScottishPower Group following Committee;
6 Helping Customers manage an acquisition in 1999. It is currently in a regulatory approval Matthew Wright, Executive Vice President, has PacifiCorp
Energy Use and Impacts process for a merger with Iowa-based Mid-American Energy Board-level responsibility for customers;
7 Advertising and Marketing Holdings Company. It is expected that this merger will be Andy MacRitchie, Executive Vice President, has PacifiCorp
8 Awards completed in 2006. Board-level responsibility for strategy, regulation and external
PacifiCorp is one of the largest investor-owned utility affairs; and
companies in the western United States. The company operates Karen Gilmore is Vice President of Customer Services.
as Pacific Power in Oregon, Washington, Wyoming and
Northern California and as Utah Power in Utah and Idaho. Regulatory overview
PacifiCorp is regulated by commissions in each of the states it
PacifiCorp is an integrated utilities company. It owns: serves:
recoverable coal reserves; California Public Utilities Commission;
mining operations; Idaho Public Utilities Commission;
transmission and distribution networks, and Oregon Public Utility Commission;
metering and customer service operations. Utah Public Service Commission;
Washington Utilities and Transportation Commission, and
PacifiCorp delivers electric power to approximately 1.6 million Wyoming Public Service Commission.
consumers over an area of about 136,000 square miles. It has
the capacity to generate 8,426 megawatts of power and State regulatory commissions require utility companies to
generates 79% of our customer’s electricity ourselves. We also provide electricity to customers at a fair and reasonable price,
buy (and sell) power on the wholesale market to ensure we have set by the commissions. Commissions also regulate the
the power we need to meet our customers’ needs. following matters:
PacifiCorp’s operating profit, excluding goodwill standards to ensure safety and reliability;
amortisation and the exceptional item, decreased by $29 million boundaries of service areas;
to $914 million in 2004/05. Further financial performance bookkeeping methods;
information can be found in the ScottishPower Annual Report matters relating to financial reorganisation;
& Accounts. proposed purchases;
sales or change in status of property, and
Management company mergers.
PacifiCorp’s senior management is responsible for all
marketplace activity. PacifiCorp is also subject to regulation for interstate activities,
Judi Johansen, President and CEO of PacifiCorp, has such as transmission and wholesale power sales to marketers
26 ScottishPower Customer Performance Report 2004/05
and other utilities, by the Federal Energy Regulatory
Commission (FERC). FERC regulates the following matters:
interstate electricity rates and services for wholesale or sale-
inter-utility wheeling and other use of transmission facilities
rates & services:
licensing (or issuing certificates) for such services;
curtailment or abandonment of such services;
corporate mergers and security issues affecting such services,
licensing hydroelectric projects.
Breakdown of customers 2003/04* 2004/05*
Total 1,555,326 1,586,875
Utah 45% 45%
Oregon 33% 33%
Wyoming 8% 8%
Washington 8% 8%
Idaho 4% 4%
California 3% 3%
*Note numbers presented in last year’s report were the percentage breakdown
based on revenue rather than customer numbers. Information for the past two years
has been updated here.
27 ScottishPower Customer Performance Report 2004/05
2 Aims & Achievements
The following table highlights some of PacifiCorp’s performance against ScottishPower’s three international strategic marketplace goals.
International Strategic Goal PacifiCorp Performance Indicator Target for 2004/05 Performance in 2004/05
To be recognised for outstanding JD Power & Associates national Achieve index score of 100 Achieved index score of 98
customer service and care customer satisfaction survey
Monthly surveys of retail customers for 85% of customers to rank overall Achieved 87% customer satisfaction rating
billing, setting up a new account and customer service experience 6 to 10 on a Satisfaction with the customer service
outage calls to the customer contact and 10-point scale. agent improved to 93%
collections centres Note: Surveys conducted only in first quarter of
Annual external TQS Research Survey of Achieve high satisfaction among major Ranked first overall in customer
major commercial and industrial customers, scoring in the top ten on eight satisfaction
customers of the nine measures used in the TQS Attained top 10 status in all nine
research survey measures
To provide safe, reliable power SAIDI and SAIFI are measures of supply SAIDI = 190 minutes SAIDI = 193 minutes
underpinned by sustained investment in outage. They measure the duration of SAIFI = 1.9 SAIFI = 1.9
our assets and technology outage (SAIDI), and the sustained
frequency of outage (SAIFI)
To be an established pioneer of Department of Energy National Achieve continued top-10 status in Achieved top 10 status in annual
sustainable energy Renewable Energy Lab (DOE/NREL) annual DOE/NREL ranking national DOE/NREL rankings,
rankings of green power programmes ranking 2nd for overall customer
participation, 3rd for renewable energy
sales, 6th for renewable energy pricing.
Increased customer participation in
renewable programmes to 36,890
For information on our performance in previous years, please refer to our previous Marketplace Performance Reports.
28 ScottishPower Customer Performance Report 2004/05
We have continued to improve the way in which we forecast
3 Security of Energy Supply regional energy demand. We use spatial load forecasting studies
which provide information on the need for, and the location of,
Background future substation sites. These studies combine a variety of
Ensuring a secure, reliable supply of electricity is both an information sources, including:
obligation to our customers and our commitment to them. We current land-use data;
set, and report on, standards that enable us to measure and daily profiles for various load classes;
improve our performance year on year. projections of regional seasonal peak demand;
A number of factors affect the energy supply, from immediate population projections, and
issues such as the weather, to long-term issues such as system information gathered from our stakeholder engagement
planning and growth in demand. To ensure that power is process that reveals expected community growth patterns.
available when and where it is needed, we study and project All the information is then integrated and mapped. This gives
energy needs and maintain and invest in the system of us a geographic model we use to predict future growth scenarios
substations, poles and wires that delivers power to our In 2004/05 we expanded the use of geographic information
customers. tools to model future peak demand in high-growth counties in
central and southern Oregon. The tools help ensure that we will
Long-term security be able to provide the energy our communities need in the
Our customers are concerned about the long-term supply of future in the most effective way, with facilities located in the
energy. Our goal is to find the right balance between social, places they are most needed. Feedback from our communities is
economic and environmental needs in the long term; thereby a vital part of this process, as we aim to build a co-operative
ensuring that power is produced and delivered at the lowest relationship with those areas we serve. More information is
possible cost, and that any negative social or environmental available in our online Community Performance report at
impacts are minimised. www.scottishpower.com/community.
System planning Other efforts to secure energy supplies for customers and the region
Our priorities within system planning are getting the right We are engaged in a number of other efforts as part of our
balance between the desire for safe, reliable electricity supply commitment to ensuring a reliable supply of energy for our
and the demand for low-cost services, and planning the location customers and for the region.
of future electricity infrastructure facilities.
PacifiCorp uses its Integrated Resource Plan (IRP) to address Hydro-electric project re-licensing
these issues. This plan looks at resource needs over a 20-year Our 51-plant hydroelectric fleet represents about 14.5% of our
planning horizon and develops a portfolio of generation sources total generating capacity. It is operated under licenses that are
and devises an action plan to meet these needs. The IRP granted for periods of 30 to 50 years. Information on licensing is
incorporates input from more than 20 stakeholder groups, available in our online Environmental Performance Report on
including customers, environmental interest groups, social www.scottishpower.com/environment.
advocates and others. Current IRP activities include:
securing new generation sources; Transmission network management
offering programmes to reduce the demand for energy, and PacifiCorp, in conjunction with other western utility companies,
inviting proposals for renewable energy. is seeking to develop an independent entity, Grid West, to
change the way the transmission network (which brings power
29 ScottishPower Customer Performance Report 2004/05
from plants to communities) is managed in the future. Grid Service standards
West would manage certain operational functions of the In 1999, PacifiCorp introduced a voluntary service standards
region’s transmission grid and plan for expansion as necessary. programme. This committed us to certain levels of reliability, on
Several transmission system owners, including PacifiCorp, plan which we report to both the regulatory commissions and our
to transfer operational control of their systems to Grid West customers. Measures include key supply security issues such as
once it is fully operational, although they will retain ownership the average number of power interruptions. In 2004/05 we
of the facilities. PacifiCorp is negotiating with the other utilities updated this service standards programme to continue through
to determine the final shape of Grid West and its operations, March 2008 and amended the standards for measures of
with input from stakeholders through the Regional reliability to reflect those issues that matter most to stakeholders
Representatives Group, an organisation made up of a broad and improving company operations.
range of regional stakeholders. In December 2004, the first of Performance is measured in typical conditions, and does not
four key decision milestones was achieved, with the approval of count severe weather ‘major events’ that would skew
performance. In 2004/05 we had a series of individual small
the bylaws for Grid West.
storms that did not qualify as major events and were therefore
Other work to secure energy supply for the long term
part of the calculations of our performance. These contributed
to the fact that our performance, while slightly above operating
monitoring trends in demand, including forecasts of load and
plan targets, was below the level we committed to at the time of
cost of energy so they can balance the system and provide
our merger with ScottishPower. We are continuing to monitor
input to our planning models
performance in all kinds of weather conditions to help us
issuing requests for new power supply where appropriate, and
deliver a reliable service.
investing in plant and siting facilities to supply and deliver power
invested in transmission & distribution system in US in In 2004/05 we met all performance standards for reliability.
2004/05 Many reliability performance standards had been delivered
early, however six of these were achieved for the first time. The
In 2004/05 PacifiCorp invested $327.6 million in its
commitments that were achieved at the end of 2004/05 were
transmission and distribution system. Since 2003/04 that
outage duration in Wyoming, outage frequency in Washington,
investment has included $203.18 million in system
and supply restoration in Idaho, Wyoming and Utah.
reinforcement and $54.56 million in upgrades to the system of
poles and wires that delivers energy to homes and businesses.
In previous years we have reported our performance on
Transmission and distribution investment ($millions)
momentary outages (called MAIFI and calculated as the
Year 2003/04 2004/05
number of momentary outages per customer per year). Our
New connects 79.25 82.08 ability to track accurate information for this figure has improved
Mandated 23.64 32.07 substantially, due to technical upgrades. This year we have
System reinforcement 121.78 81.40 reported adjusted calculations dating back to 2001/02 and are
Replacement 94.26 106.46 pleased to show a reduction from 6.82 events in 2003/04 to
Upgrade 28.95 25.61 4.92 events in 2004/05. Additionally, the company met its
Total 347.88 327.6 momentary outage interruption improvement target (dating
back to the pre-merger period of 1999/00) for each state.
Performance and targets We have also improved reporting for circuit performance.
Another important aspect of the security of our energy supply is This is a blended measure of reliability that weighs outages in
system performance; including how many times and for how terms of duration (SAIDI), sustained frequency (SAIFI),
long customers are without power. momentary frequency (MAIFI) and how many times equipment
30 ScottishPower Customer Performance Report 2004/05
is unable to automatically reset itself, requiring staff to go on site companies are continuing to develop and implement systems to
to restore power. collect reliability data and evaluate the results they calculate.
We have a new automated outage management system We continue to benchmark against other companies’
(CADOPS). This system provides us with better documentation performance where possible, and to assess differences - such as
of outage events, which has resulted in us reporting poorer the spread of customers - that could affect the comparability of
reliability without a decline in actual reliability. systems. We set and report on goals to improve our own system
Standard information from other companies to provide and hope to provide meaningful comparisons to a broader
comparisons on system performance is not widely available, as audience over time.
US Performance Standards Performance 2003/04 Performance 2004/05
#1 – System availability (SAIDI) 173 minutes at a company level 193 minutes at a company level
By the end of 2004, all 6 states
experienced reliability improvement in
excess of that committed to during the
#2 – System reliability (SAIFI) 1.67 events at a company level 1.9 events at a company level
By the end of 2004 all 6 states
experienced reliability improvements in
excess of that committed to during the
#3 – Momentary interruptions (MAIFI) 6.82 events at a company level 4.92 events at a company level, using the
*MAIFI data collection was affected by corrected calculation process developed
implementation of the new automated last year. During the five-year period post
outage management system (CADOPS). merger (2000-2005), each state
Prior to CADOPS implementation 5 of 6 experienced improved momentary outage
states served had achieved their 5% reliability results in excess of 5%
#4 – Worst-performing circuits 5 of 6 states have met the required 20% All 6 states have met the required 20%
improvement target, based on uplifted improvement target, based on uplifted
CPI scores CPI scores
#5 – Restoring supply after a fault 85% 85%
#6 – Answering the telephone 80% 80.07%
#7 – Responding to the Commission 99% 98.50%
31 ScottishPower Customer Performance Report 2004/05
facilitate and maintain constructive relationships with key
stakeholder groups. The four largest states in which PacifiCorp
4 Customer Satisfaction has retail customers are represented at Board level. We hold
joint meetings of the RABs on a quarterly basis. This year Utah,
We conduct ongoing and annual research to assess our Oregon and Wyoming Board members participated in state-by-
customers’ needs and their perception of our service and state stakeholder identification and assessment meetings. We
performance, and gain their input to our business where run an annual survey of board members on company
appropriate. performance, which indicated improved performance against a
series of community-focused measures in 2004/05.
Research methods Our 14 Customer Advisory Boards (CABs) provide us with a
Residential customers local sounding board for operational and policy issues that have
We use the JD Power & Associates Electric Utility Residential an impact upon customers and the community. Local citizen
Customer Satisfaction StudyTM to measure residential customer leaders are selected by the relevant Regional Community
satisfaction. This allows us to compare our performance with Manager to sit on these boards. The CABs meet to discuss a
37 other utility companies, both in the region and nationally. In
addition, we conduct regular ‘transaction’ research with
wide variety of local, state and regional issues that might impact
upon the company, and electric utility issues that may impact
Customer Advisory Board meetings customers who have contacted Pacific Power or Utah Power upon the community. We convened 37 CAB meetings in
held in 2004/05 about billing, setting up new accounts or any outages. And, 2004/05.
finally, we conduct research and run focus groups on a variety We also engage with stakeholders on ongoing issues that
of additional product and services, as needed. either require consultation processes or would benefit from
them, such as our integrated resource plan, our transmission
Commercial and industrial customers system proposals and hydroelectric generating projects.
The primary way in which we measure the satisfaction levels of Establishing and maintaining relationships with stakeholders
our large commercial and industrial customers’ is through the is a high priority for the company. We believe good relationships
national TQS survey which measures performance in the provide for good communications, which in turn lead to good
following major categories: results. On hydroelectric plant relicensing, for example, we have
reliability; engaged in inclusive consultation processes that go far beyond
power quality; regulatory requirements of formal notice and comment. We
pricing/rate structure; continue to consult with key agencies and stakeholders after the
energy efficiency, and Federal Energy Regulatory Commission issues a licence, as we
account representative performance and relationships with adopt a collaborative approach to implementing the conditions
our contacts. of the new licence.
We also gather information through the ongoing management Two third-party research projects we have used in the past –
of our accounts, and through sessions to share information, key community leaders’ perceptions and research with
answer questions and request input. regulators – were not conducted in 2004/05 due to budget
A cross-section of civic and business leaders from the Latest results overview
communities we operate in meet as Regional Advisory Boards Residential customers
and Customer Advisory Boards. In 2004 our JD Power & Associates residential customer
There are three Regional Advisory Boards (RABs) that satisfaction index score was 98. This is level with the industry
32 ScottishPower Customer Performance Report 2004/05
average and higher than the average for the West Region, which TQS Research survey results
was 96. The score is however down from 101 in 2003, though Satisfaction of large commercial and industrial customers
this decline is in line with trends in the region and the industry. Very satisfied National
The biggest decline in PacifiCorp residential customer Year (% 8-10) averages
satisfaction occurred among Utah Power customers, mainly in 1999 53% 58%
the area of power quality and reliability. The December 2003 2000 53% 61%
holiday storm along the Wasatch Front had a negative impact 2001 55% 60%
on Utah customer satisfaction. 2002 76% 62%
Nationally, the 2003 Northeast blackout and Hurricane 2003 80% 64%
Isabel affected many territories in the Mid-Atlantic, Northeast 2004 86% 64%
and Midwest regions.
In most of the states we serve, customers are not eligible to change
JD Power & Associates Electric Utility Residential Customer their service provider. In Oregon, after energy restructuring
Satisfaction StudyTM legislation (SB 1149) was passed in 1999, all non-residential
Year PacifiCorp West Region Industry customers can choose to purchase electricity from an electricity
service supplier (ESS). In the three years since this option has been
1999 99 97 97
available for non-residential customers, about 0.1% of eligible
2000 98 99 98
customers have chosen to leave PacifiCorp for service from an ESS.
2001 102 89 98
2002 97 93 100
2003 101 98 101
2004 98 96
We conducted our monthly residential transaction research in
5 Customer Service
Terms of business
April, May and June 2004.
Our relationship with our customers is defined by terms and
A total of 87% of customers said they were satisfied with our
conditions that are agreed with, and monitored by, state
customer service (rating the company 6-10 on a 0-10
regulatory commissions. We have an obligation to provide least-
satisfaction scale), and
cost electricity to customers. Customers, in turn, are obliged to
93% rated their satisfaction with customer service
pay for the electricity they use.
representatives 6-10, consistent with results observed during
Each year we notify customers of their rights and
the past five years.
responsibilities, and about pricing information through an insert
with their bills, which also provides customers with information
Commercial and industrial customers on how to contact us and the appropriate state regulatory
Large customers rated us first in the national TQS research, commission. During the year, we communicate any changes to
with 86% very satisfied. We achieved rankings in the top 10 in rates or services to customers through messages on their bills.
each of the attributes measured by the survey of 60 participating We are required to follow commission regulations on
utilities. customer issues including:
extending service to new customers;
giving notice to and disconnecting customers;
over- or under-billing disputes;
payment of deposits, and
33 ScottishPower Customer Performance Report 2004/05
Small business and Direct customer contact Guarantees
Most direct customer contact occurs through our contact In March 2005 we completed our voluntary five-year customer
government customers centres, which serve both residential and small commercial guarantees programme. This programme committed us to
We created a new team to handle the special needs customers. Initiatives designed to improve our performance providing our customers with compensation if we failed to live
of our small business and government customers include comprehensive training of 400 hours for new employees up to promises that we had made them. As a result of the
in order to improve the service we offer them. We and ongoing training to maintain and build skills and provide successes of this programme, we chose to renew the programme
provided an additional three weeks of training for updates on policy and process changes. Other initiatives include with a few revisions.
the 46 customer service agents that make up this improving communication between our customer services, field For the next three years we will continue to focus our
team, and updated our call routing system to route operations, dispatch and metering departments, upgrading the attention on the areas of our business that customers value
these customers to the new team, which now mainframe hardware and operating system that provides the most, including power restoration, appointments, estimates,
handles 6,700 calls each month. A customer framework for our service which increased our response time billing and meter inquiries, and notification of planned
survey shows that overall, 75% of business and and reduced the time needed to process customer bills, interruptions.
government customers reported they are “very reviewing customer service systems to identify opportunities to In 2004/05 we achieved a success rate of more than 99% on
satisfied” with the service they receive from us, up improve service, providing immediate information to customers seven of our eight guarantees.
from 63% in February 2004. who phone in and increasing our focus on collecting accurate
account and contact data.
2001/02 2002/03 2003/04 2004/05
US Customer Guarantees success rate success rate success rate success rate
#1 – Restoring power 99.9% 99.9% 99.9% 99.9%
#2 – Appointments 99.8% 99.5% 99.6% 99.7%
#3 – Switching on power 99.8% 99.5% 99.7% 99.7%
#4 – Estimates for new power supply 98.9% 97.8% 98.7% 98.9%
#5 – Billing questions 99.6% 99.4% 99.6% 99.8%
#6 – Meter problems 99.3% 97.4% 98.4% 99.1%
#7 – Planned interruptions 99.8% 99.7% 99.9% 99.9%
#8 – Power quality concerns 98.8% 99.8% 99.7% 100.0%
34 ScottishPower Customer Performance Report 2004/05
PacifiCorp aims to resolve any customer complaints directly We offer a range of bill payment options to suit a variety of
with the customer. In cases where issues are not resolved, needs. This year we saw a 20% increase in online billing and
customers can make formal complaints to the appropriate payment enrolments over last year, bringing total online activity
regulatory commission. by March 2005 to more than 97,000 customers. This is
When a customer contacts the relevant commission and files approximately 6% of our customer base.
a complaint the commission will review our responses to We used customer feedback to evaluate our online service,
determine whether we have upheld our tariff and policies, and and refined it accordingly, updating our website and
have offered customers arrangements to meet their needs. The streamlining several online processes.
20% commission will decide whether the filed complaint should
become an official commission complaint, or if it can instead be Customers with specific needs
increase in online billing and payment enrolments, classified as a mediated complaint. Language needs
making a total of 6% of customers We work proactively with both our customers and the In 2002 we used a media market study to assess the language
regulatory commissions to handle complaints in such a way that needs of our customers. We found that the Hispanic
they do not become official commission complaints. populations in our service areas in Yakima and Walla Walla,
Since 1999/00, we have seen a 10-fold increase in the Washington were 36% and 16% respectively.
number of complaints that have been re-classified as mediated We have targeted Spanish-language information in these
complaints, as opposed to becoming official complaints. This areas and have begun targeting additional high-density areas,
significant increase is due to our continuing focus on this area, including Utah where some counties have Hispanic populations
and our ongoing meetings with commission staff. Commission of more than 10%.
staff are more likely to change a filed complaint to a mediated In 2004/05 we developed and implemented a template for
complaint if we can demonstrate that we followed established Spanish-speaking customers to enable them to read and
rules and tariffs in our interactions with the customer. understand their bills more easily. We also developed a Spanish
We have put targets and processes in place in order to page for our website containing customer service, safety and
maintain the low level of commission complaints in the future. efficiency information, and we embarked on a Spanish language
We analyse all complaints to determine the root cause and safety outreach programme in areas with a high density of
improve our service. At the close of each month, we hold Spanish language customers (see Health & Safety performance
36% internal meetings to determine if commission complaints could
have been resolved more productively. Each case is reviewed to
report at www.scottishpower.com/safety).
of population in Yakima, Washington and determine whether the complaint could have been avoided and, Medical needs
16% of Walla Walla are Hispanic if so, an action plan is developed to correct avoidable We offer some special arrangements to customers who rely on
complaints. their electricity supply due to medical conditions. These
In 2004/05, overall commission complaints were less than include:
the prior year. extended payment arrangements which lower the monthly
Complaints across all states numbered 557, lower than our payment amount to make it easier for customers to pay their
target of 588. bills, and
Measured in total complaints per 1,000 customers across all helping customers to obtain government or agency assistance
states, our rate was 0.3664 in 2004/05. The rates were 0.4369 funds.
in 2003/04 and 0.3607 in 2002/03.
35 ScottishPower Customer Performance Report 2004/05
Price and Value In the Mountain Region, the average increase was 22.56% for
Rates investor-owned utilities, while PacifiCorp customers saw changes
Customer rates are set by state utility commissions. They are ranging from a decrease of 1.55% to an increase of 20.42%.
based on the costs of energy generation, transmission and
distribution. Profitability is controlled by the regulating Rate Setting Process
commissions, based on their determination of what is a fair and We recover increasing costs needed to provide electric service
reasonable return on the investment and costs required to through general rate cases and other cost recovery filings
provide safe, reliable, quality power to customers. adjudicated before the state commissions. The commissions
7.34% Twice each year the Edison Electric Institute prepares a report
on typical bills and average rates for investor-owned utilities.
Information from the winter 2005 report shows that while rates, on
then set rates based on costs approved in the cases.
In 2004/05 we completed general rate cases in Utah and
Washington and recovered increased net purchased power costs
rise in average retail prices at Pacific Power
average, increased in 2004/05, average rates paid by PacifiCorp's through a power cost filing in Wyoming. General rate cases
between 1999 and 2004, compared to a 13.82%
average rise across the US and a 14.27% rise in retail customers were lower than those paid by other customers in were also filed in Oregon and Idaho during the period and will
the Consumer Price Index the region. In fact, between 1999 and 2004, PacifiCorp’s average be resolved in 2005/06. Some of the cost drivers are the need to
prices grew less than the national average rate for that period. build generation and delivery facilities to meet rapid load
While average kilowatt-hour prices for customers of all growth, and increased costs of fuel and purchased power. Other
investor-owned utilities in the Pacific Region grew by 25.06% cost increases are common across all industrial sectors in the
between 1999 and 2004, PacifiCorp customers in the region US economy and include increased employee benefit costs,
saw changes of 1.10% to 12.55% over the same period. particularly pension and health insurance costs.
Edison Electric Institute Typical Bills and Average Rates Report: Winter 2005 report, average rates in cents per kWh
1999 2002 2003 2004
Mountain Region Average 5.63 6.87 6.63 6.9
PacifiCorp Averages in Mountain Region:
PacifiCorp – Idaho 3.88 3.24 3.68 3.82
PacifiCorp – Utah 4.62 5.06 5.03 5.35
PacifiCorp – Wyoming 3.77 4.04 4.22 4.54
Pacific Region Average
PacifiCorp Averages in Pacific Region 8.18 11.14 10.66 10.23
PacifiCorp – Oregon 5.26 5.55 5.65 5.46
PacifiCorp – Washington 4.54 4.5 4.55 4.59
PacifiCorp – California 6.85 7.21 7.57 7.71
US Average 6.73 7.32 7.45 7.66
Rates compared to Consumer Price Index
% Change of
1999 2003 2004 1999 to 2004
Consumer Price Index* 168.9 188.6 193.00 14.27%
US average cents per kWh 6.73 7.45 7.66 13.82%
Pacific Power average cents per kWh 4.77 5.091 5.12 7.34%
Utah Power average cents per kWh 4.51 4.872 5.14 13.97%
Rate was reported as 5.11 in last year’s report and has since been revised Rate was reported as 4.83 in last year’s report and has since been revised
36 ScottishPower Customer Performance Report 2004/05
performance testing, marketing assistance and builder
Helping Customers manage incentives.
6 Energy Use and Impacts Retro Commissioning – provides building tune-up services
(such as checking to see that the condition of the buildings
Energy efficiency and load management critical equipment and controls are working as intended) to
Promoting energy efficiency, and managing the demand for provide customers with low to no cost actions they can take
power at the times of highest use during the day, helps us to to improve the efficiency of their existing buildings.
close the gap between the forecasted demand for energy and Commercial Lighting Load Control – offers two-way control
anticipated resources. Such activities therefore reduce the of commercial lighting circuits through the internet and
450 average MW extent to which we need to develop our existing energy sources
or acquire new sources, as well as providing customers with the
immediate benefits of lower use and therefore lower cost.
energy management software. Customers receive savings of 2
to 3% in exchange for allowing us to exercise further control
when demand for energy is at its peak.
targeted demand-side resources savings by 2013/14
We are also working with our regulators to use load control
programmes to ensure a stable system. ‘Load’ is a measure of Targets
the maximum amount of energy that all our customers could We set ambitious targets for our energy efficiency and demand
require at any one time. In the case of a residential home, for management efforts in our Integrated Resource Plan. These
example, this would be the total amount of energy needed to targets, call for up to 450 average MW (MWa) and 285 MW of
run all the appliances and services that require energy at the demand-side resource savings by 2013/14.
same time. We are required to ensure that our energy reserves Total demand management resources in 2004/05 totalled
are always at a level such that maximum load could be met, plus 14.14 MWa in energy and 73.55 MW in peak load control.
an additional ‘reserve’ in case of a sudden increase in demand.
Therefore, if we can manage the demand for energy through Fuel poverty
arrangements with our customers whereby they agree to limit For some customers on limited incomes, the cost of energy is a
their total energy use, particularly at peak times, it reduces the disproportionately high expense in their monthly budget.
pressure on the amount of energy we need to have in our The total number of customers living in poverty or struggling
reserves. with their bills is difficult to gauge. The US census provides
An additional benefit of better managing our customer’s federal poverty level estimates, and these guidelines are used to
estimated percentage of residential customers energy demands, in some cases, is that it may defer our need to establish whether customers qualify for assistance with their
we serve with incomes at or below federal invest in our infrastructure to meet our delivery requirements energy bills. The estimated percentage of residential customers
poverty guidelines during these limited periods. Over building our system to meet with incomes at or below federal poverty guidelines is 11.4%
peak loads results in our system being under-used in the other across all the states we serve (California 19.3%, Idaho 14.2%,
months of the year, which is uneconomical for the Company Oregon 13.1%, Utah 8.8%, Washington 18.6% and Wyoming
and our customers 12.8%).
Some states provide assistance to households with incomes
Programmes that are higher than the federal poverty guidelines. For example
We offered five new demand management programmes in in Idaho, households with incomes at or below 150% of the
2004/05, three of which were concentrated in Utah, where peak federal poverty guidelines can participate in low-income
load growth is above the average. The Utah programmes are: programmes. This leads to an estimate that 25% of our Idaho
Residential New Construction - improves building practices customers are eligible for programmes, compared to the 14.2%
and appliance efficiency standards beyond existing codes or at 100% of federal poverty guidelines.
baselines through builder training, technical assistance,
37 ScottishPower Customer Performance Report 2004/05
Low-income customers who qualify for assistance receive In addition to disconnecting the electricity supply we also
funds through the federal Low Income Energy Assistance charge customers a reconnection fee and a deposit for
Program (LIEAP). In the 2004/05 heating season, which runs reconnection, where state commission allow us to do so. This is
from autumn through early spring the federal government part of our effort to keep average costs down for all our
provided $2.2 billion in assistance in all 50 states. PacifiCorp customers, and we seek to educate customers about the need to
customers received more than $13 million in energy assistance proactively manage their electricity bills.
from local, state and federal funds through a total of 69,106 Disconnecting customers who do not pay their bills is one of
$347,617 energy assistance payments.
We are not able to identify customers with incomes eligible
for energy assistance, but we direct customers to agencies that
the commission’s approved payment collection rules, which we
are expected to follow. Disconnection helps to minimise write-
off for the company, which ultimately gets passed on to our
matched support for low-income agencies
based on customer contributions are able to determine what support funds are available to them. consumers. It also helps customers avoid building up debt. In
We partner with nine non-profit agencies that distribute the US, we consider taking efforts to prevent the build up of
funds to customers in need of assistance with paying their unsustainable debt as a part of our social responsibility.
energy bills. We also partner with agencies in California, Idaho, Disconnecting customers is an expensive process, and we
Utah and Washington to offer insulation and energy efficiency only disconnect customers once all other collection efforts have
services to income-qualifying households at no cost. failed. The process varies from state to state, but before
We also offer our customers the opportunity to contribute to customers get to the point of being disconnected, they receive,
non-profit organisations that provide energy assistance to at a minimum, a clearly marked “Past Due Notice”, followed a
households in need, through placing donation envelopes in few days later by a “Final Notice”. Both of these notices inform
November and February billings. Organisations we support customers that they must act immediately to avoid shut off, and
include Project HELP in California and Washington, Oregon specify the amount due and a date by which payment must be
HEAT, Lend-a-Hand in Idaho and Utah and Energy Share of received to avoid disconnection. The notices also inform
Wyoming. In 2004/05 we matched customer contributions to customers that they may be eligible for payment arrangements
these organisations of $347,617, and contributed $125,405 in costs that would prevent disconnection, and explain how to contact
related to programme administration and envelope distribution. the company to inquire about time payment plans.
In some states we also attempt to contact the customer by
Disconnections phone and leave door notices before disconnection, in both
We work with customers who have outstanding electricity debts cases informing customers about possible payment
to arrange special payment terms with them, or refer them to arrangements that would prevent disconnection.
agencies that can help them avoid disconnection for non- If the customer contacts the company after receiving one of
payment. Despite these efforts, a considerable number of these notices, we make every effort to work with them to find
customers are disconnected each year in the US for not paying a solution (for example through time payment plans) that
for the energy they have used. will allow us to collect the past due amount and avoid
Disconnections at PacifiCorp have increased over the last disconnection.
year, though we do not have current national statistics for Despite the tightening of our policies around debt, the
comparisons. number of disconnection-related complaints to state
Year Disconnections commissions has not increased.
Green energy initiatives
We offer a number of renewable energy options to customers,
38 ScottishPower Customer Performance Report 2004/05
Blue SkySM Block — This option gives all customers the rankings. PacifiCorp was ranked second in customer
flexibility to purchase fixed increments (blocks) of new wind participation, third in renewable energy sales and sixth in the
power for an additional $1.95 per block. Customers can premium charged.
purchase as much or as little as they’d like.
Blue Sky Usage — Under this option, Oregon residential and
small non-residential customers buy and support 100%
renewable energy equivalent to their actual metered usage,
which can fluctuate month-to-month. Their purchase
7 Advertising and Marketing
supports a blend of new wind, biomass and solar and costs Advertising and marketing codes in the industry differ from
only $0.0078 (less than a penny) more per kwh than Basic those in the UK because the retail industry is regulated and
Service rates. For the typical Oregon residential household there are single providers in markets. Regulatory commissions
that means an additional $7.80 each month. set guidelines for competition, communication and upholding
Blue Sky Habitat — As with Blue Sky Usage, Oregon customers’ interests, though usually not as part of a stated code.
residential and small non-residential customers buy Areas that are of concern to our customers and that we manage
renewable energy equivalent to their actual usage and support and monitor are detailed below.
46% 100% new renewable resources — a blend of new wind,
biomass and solar — for only $0.0078 (less than a penny) Privacy
increase in customers supplying additional more per kWh than Basic Service rates. In addition, We are committed to safeguarding the privacy of both
renewable energy through PacifiCorp Blue Sky customers make a $2.50 monthly contribution to The Nature individuals and businesses with regard to personal and financial
programmes Conservancy of Oregon, which is working to restore local information. We have policies in place to ensure that access to
salmon habitat. and the collection, use, retention, and transfer of private
Large businesses also have two renewable options: Pacific information is strictly limited to that necessary to service
Power’s standard Blue Sky Block offering, mentioned above, customers' accounts and agreements with the company. As a
and Blue Sky QS (quantity savings) which allows large business part of our ongoing commitment to safeguarding the privacy of
customers to buy renewable energy for less, providing they purchase our customers, we created new access and update policies for
at least 101 blocks per month for a year. This year we offered this customer service that were distributed to all agents in March
new to businesses in Utah, Oregon, Washington and Wyoming. 2004. These policies provide clarification and guidance for
As of March 2005, 36,890 Pacific Power and Utah Power responding to customer requests for account information,
customers were supporting additional renewable energy questions and changes.
through the options offered through the Blue Sky programme, To protect customer information and comply with relevant
an increase of 46% over 2003/04. Customers supported 207,659 laws and commission standards, we do not share, rent or sell
MWh of renewable energy – a mix of wind, biomass and solar – customer information to any outside source, we do not use
from newly developed facilities in the West, equivalent to the customer information for telemarketing and we do not allow
electricity needed to power 17,305 homes for one year (based on third-party solicitation within our bills
average usage of 1,000 kWh per month). We share information in three circumstances: to companies
Each year the US Department of Energy’s National that are providing services to PacifiCorp and are subject to
Renewable Energy Laboratory ranks utility green pricing confidentiality agreements that prevent their use of information
programmes across the country. This year 600 green pricing for any other purpose, to fulfil a lawful request from a
programmes offered by utility companies in 34 states were government agency or to pursue a validly issued subpoena.
renewable energy sales figures. In 2004 PacifiCorp achieved top pacificpower.net and utahpower.net
39 ScottishPower Customer Performance Report 2004/05
Awards Customer communication and customer information
US Department of Energy’s National We use advertising to educate our consumers and keep them
Renewable Energy Laboratory ranked updated and informed. Each year we prepare a comprehensive
PacifiCorp 2nd in customer Customer & Community Communications Plan that focuses on
safety, reliability, efficiency, sustainability, value and services.
participation in green energy
programmes Reporting to commissions
The American Wind Energy We voluntarily provide information on our customer
Association named PacifiCorp the communications to state commissions. When we are
2004 Utility of the Year communicating changes to rates, we comply with commission
PacifiCorp was rated Best Utility in standards.
Overall Customer Satisfaction for
large customer on the 2004 national We have a set of communications policies regarding bill
benchmark from TQS Research, also message, bill inserts, email, telemarketing, customer newsletters,
achieving first place in energy communications planning and on-hold messaging.
efficiency and account management We post our policies on our intranet so all employees have
Advertisements focusing on access.
sustainability and safety earned
PacifiCorp and its agency
international recognition in the
Communicator Awards recognising
outstanding work in the
communications field. The ads won
out nearly 3,000 entries. The Service
Industry Advertising Awards also
recognised Blue Sky and reliability
ads during the year.
40 ScottishPower Customer Performance Report 2004/05