Study: Rising Rate Costs Chip into Water Utility Customer Satisfaction

According to the new 2022 U.S. Water Utility Residential Customer Satisfaction Study from Troy’s J.D. Power, water utilities have seen a six-year streak of flat or improving customer satisfaction with residential water utilities come to an end due to a significant increase in monthly bills.
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Utility bill lying on table, payment for services, month expenses, tariff
New survey results from J.D. Power shows customer satisfaction with water utilities have fallen as rates have risen. // Stock Photo

According to the new 2022 U.S. Water Utility Residential Customer Satisfaction Study from Troy’s J.D. Power, water utilities have seen a six-year streak of flat or improving customer satisfaction with residential water utilities come to an end due to a significant increase in monthly bills.

“The timing couldn’t be worse. The rate relief efforts put in place during the pandemic have come to an end just as the forces of inflation have driven a significant increase in the monthly bills of residential customers,” says Andrew Heath, senior director of utilities intelligence at J.D. Power.

“Customer satisfaction has declined in every factor of the study, as the average monthly water utility bill in the U.S. is now up $5.73 from 2020 — without a corresponding increase in consumption. Utilities looking to combat this negative sentiment really need to get serious about proactive customer communications and customer service.”

Key findings from the study include:

  • Overall customer satisfaction with residential water utilities is 731 (on a 1,000-point scale), down 6 points from last year’s study. The decline coincides with a $5.73 increase in the average monthly bill amount versus 2020. Importantly, that cost increase does not correspond with a significant increase in water usage that was seen in 2021 when a largely home-bound customer population was consuming more water than ever.
  • While customer satisfaction scores decline in every factor of the study this year, the declines are most pronounced in the areas of communications and price. Notably, among those customers who receive a bill, 35 percent say they recall hearing about a rate increase by their water utility.
  • Overall satisfaction scores are highest (794) when customers recall receiving a proactive electronic communication from their water utility. Likewise, the number of customers using digital channels to access customer service increased 43 percent from 2019 and customer satisfaction is highest when interacting with customer service digitally.

The study measures customer satisfaction in eight geographic regions. Below are the highest-ranked utilities and scores by region:

  • Midwest large: Illinois American Water — 773, third consecutive year
  • Midwest midsize: Aqua — 758
  • Northeast large: NYC Environmental Protection — 763
  • Northeast midsize: Boston Water and Sewer Commission — 762
  • South large: Miami-Dade County — 766
  • South midsize: Orange County Utilities — 794
  • West large: Seattle Public Utilities — 766, third consecutive year
  • West midsize: Irvine Ranch Water District — 771

In the Midwest large category, Detroit Water and Sewage ranked fifth with a score of 728, which is 10 points above the segment average of 718. No local utility in the Midwest midsize category ranked in the top five or above the segment average of 726.

The survey measures satisfaction among residential customers of 90 water utilities that deliver water to at least 400,000 customers. Overall satisfaction is measured by examining 33 attributes in six factors — listed in order of importance: quality and reliability, price, conservation, billing and payment, communications, and customer service.

The study is based on the responses of 33,054 residential water utility customers and was conducted in four waves from June 2021 through March 2022.

For more information about the U.S. Water Utility Residential Customer Satisfaction Study, click here.

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