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PGW's would-be new owner gets low scores for customer satisfaction

Two Connecticut gas utilities owned by the would-be buyer of Philadelphia Gas Works scored below average for customer satisfaction in their inaugural evaluations by J.D. Power & Associates, the market research firm.

Mayor Nutter with James Torgerson (left), of UIL Holdings, in March. The Conn. utility hopes to buy PGW. (Alejandro A. Alvarez / Staff Photographer)
Mayor Nutter with James Torgerson (left), of UIL Holdings, in March. The Conn. utility hopes to buy PGW. (Alejandro A. Alvarez / Staff Photographer)Read more

Two Connecticut gas utilities owned by the would-be buyer of Philadelphia Gas Works scored below average for customer satisfaction in their inaugural evaluations by J.D. Power & Associates, the market research firm.

Connecticut Natural Gas and Southern Connecticut Gas, owned by UIL Holdings Corp. of New Haven, were ranked slightly below the average score for 12 medium-size Eastern gas utilities in J.D. Power's annual survey.

The UIL utilities scored well on corporate citizenship and field service, but lagged in billing/payment and customer service, according to John Hazen, a senior director with the research firm.

UIL has agreed to buy city-owned PGW for $1.86 billion. City Council, which must approve a sale, is expected to hold hearings on the proposal this month or in early October. The deal is opposed by PGW's union, advocates for low-income customers, and environmental groups.

UIL's below-average customer-satisfaction scores might be held against it during the Council debate, but it outshone PGW, which was ranked last in the nation among 83 utilities surveyed.

UIL, which has operated an electric utility for more than a century, acquired the two Connecticut gas utilities, plus a smaller Massachusetts gas company, in 2010. This was the first year J.D. Power included them in its ranking of medium-size utilities with between 125,000 and 400,000 residential customers.

Connecticut Natural Gas scored 622 on Power's 1,000-point scale, and Southern Connecticut Gas scored 621. The peer-group average was 624.

PGW scored 596, down a point from last year.

PGW's scores were impaired because of its high prices and billing/payment issues, said Barry O'Sullivan, the utility's spokesman. Those two categories account for more than half of the Power score.

Though the city-owned utility has been ranked last for several years, its scores have been improving at a faster rate since 2011 than the rest of the industry, said O'Sullivan.

"While we clearly have a lot of work to do, I think the overall trend still shows that we're working hard and making improvements every year," he said.

PGW's lower-income customers, who qualify for discounted rates under its Customer Responsibility Program, "have higher levels of price and billing satisfaction than do our middle- and upper-income customers," said O'Sullivan. PGW's rates are the highest in the region, largely because of the low-income subsidies.

The most-satisfied customers of a large Eastern utility were those served by UGI, the Pennsylvania company that sources say UIL outbid in a banker-supervised auction to sell PGW.

UGI managed PGW until 1972, when it was ousted by Mayor Frank L. Rizzo and replaced by the nonprofit corporation that has overseen PGW for four decades.

Customer Satisfaction: Gas Utilities

J.D. Power & Associates has released its annual rankings of gas utilities, and the companies owned by PGW's prospective buyer, UIL Holdings Corp., came in below average. They were better than PGW's customer-satisfaction ranking, which once again was last in the nation among utilities surveyed.

Ranking based on a 1,000-point scale

East Region, Midsize Segment

Company Ranking

Columbia Gas of Pennsylvania 641

NSTAR 631

Rochester Gas & Electric 630

Elizabethtown Gas 628

NYSEG 625

South Jersey Gas Co. 625

East Midsize Segment Average 624

Yankee Gas 623

Connecticut Natural Gas* 622

Southern Connecticut Gas* 621

Equitable Gas 620

Columbia Gas of Massachusetts 616

Peoples Natural Gas 608

East Region, Large Segment

Company Ranking

UGI 662

New Jersey Natural Gas 653

National Fuel Gas 646

PSE&G 643

Washington Gas 636

BGE 635

East Large Segment Average 630

PECO 628

National Grid 620

Con Edison 607

Philadelphia Gas Works 596

*Gas utilities owned by UIL Holdings Corp.

SOURCE: J.D. Power 2014 Gas Utility Residential Customer Satisfaction StudyEndText