How Customer Satisfaction Drives Return On Equity for Regulated Electric Utilities

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During the past decade, J.D. Power and Standard & Poor's have examined the relationship between customer satisfaction and key financial metrics in the electric utility industry, such as profitability and credit ratings. During the same period, the number of electric rate cases has steadily increased. Due to this increase, J.D. Power has undertaken an examination of the relationship between customer satisfaction and return on equity (ROE) in the industry. Similar to profitability and credit ratings, customer satisfaction has a notable impact on ROE for regulated electric utilities. This white paper details the findings from these analyses.

Author(s)

Andrew Heath, Ph.D.
Senior Director, Energy Practice
Dan Seldin, Ph.D.
Director, Science Department

Improved levels of customer satisfaction contribute to improved credit ratings, operating margins, and ROE for regulated US electric utilities.