Generating powerful loyalty
On a scale of 1 to 100, with 100 being the best, EPB got the highest scores among all U.S. utilities in a recent Consumer Reports survey.
1. EPB - 92
2. Charter/Spectrum fiber - 65
3. AT&T U-verse fiber - 63
4. Comcast/Xfinity cable 54
1. EPB - 89
2. AT&T U-verse fiber - 63
3. Charter cable - 58
4. Comcast/Xfinity cable - 55
Source: Consumer Reports
Top consumer complaints
The top sources of consumer complaints to the Tennessee Division of Consumer Affairs last year were:
1. Utilities. Problems with billing and maintenance were the most common.
2. Home improvement. The most common complaints related to quality of work, incomplete work after receiving payment, and structural damage caused by the contractor.
3. Debtor/Creditor. Consumers complained most that collection agencies often make harassing phone calls or continuously call individuals who do not owe a debt to the company.
4. Professional services. Common complaints include the quality of service, charges for service the consumer did not receive, and problems redeeming gift certificates for services offered.
5. Health services and products. Most common complaints include being misquoted for services and receiving medical bills prior to the bills being sent to the consumer’s insurance company.
Source: Tennessee Department of Commerce and Insurance complaints about billing and maintenance issues with utilities topped the list of more than 4,000 written consumer complaints filed last year.
Rating the utilities
A survey of area residents about telecom providers last year ranked EPB to be the best. On a 10-point scale with 10 being extremely satisfied and 0 being extremely dissatisfied, the average rating for local telecom providers for their customer service was:
1. EPB, 9.6
2. AT&T, 7.5
3. Comcast, 6.4
Source: Wilkins Research survey of 404 area residents.
Shortly after he was elevated to the top job at EPB n 1996, Harold DePriest brought his top managers together to talk about changing the culture of the then 60-year-old business. As a municipal power provider, EPB helped electrify the Chattanooga region in the 1930s with cheaper TVA-generated electricity. As power demand grew from new clothes washers, dryers, radios, TVs and other electricity-powered devices, EPB improved its power delivery and reliability.
But as the exclusive provider of electricity in Chattanooga, EPB wasn't accustomed to operating in a competitive arena until it entered the telephone and later the cable TV and Internet-delivery business. Like DePriest, who was trained as an electrical engineer, most of those then at the city-owned utility also were engineers focused upon tending to their own power tasks, often without sharing enough information with other parts of the business.
"We did a survey and it came back and said if it's not engineering, you guys don't care about it," DePriest said. "That was accurate."
DePriest asked his managers to review all of the utility's operations to see if what they were doing was being done for their own convenience or for the convenience of the customer. That customer focus, officials insist, has been key in transforming EPB over the past quarter century.
In 1999, the change in focus became key when EPB entered the competitive telecommunications business. The utility not only assembled a new team of technical experts in fiber optic communications, EPB began preparing to compete for the first time for customers against such corporate giants as AT&T and Comcast.
EPB's venture into fiber optics began as a way to do what it had always tried to do — improve the reliability of electricity service by building a smarter, more interactive grid that could more easily detect faults and outages for more rapid power restoration.
But the fiber-optic network laid across Chattanooga to build the smart grid also enabled EPB to become a different kind of company, entering the competitive telephone, Internet and television delivery business. The telecom venture pushed EPB into a competitive industry for the first time with far more choices and customer interactions than in the past.
It also ultimately allowed EPB to create North America's first community-wide gigabit-per-second Internet in 2010, making Chattanooga "the Gig City." EPB has since upgraded its Internet speeds across the EPB footprint up to 10 gigabits per second. The municipal electric utility beat such corporate giants as Google and AT&T to the fast lane of the information superhighway.
Within the first five years of offering its citywide fiber optic service, EPB grew to become the No. 1 provider of TV and Internet services in its footprint, displacing Comcast and AT&T. In the second-floor call center where EPB customer service representatives handle more than a million calls a year, a sign urges EPB's front-line customer contacts to help build the fiber optic network to 100,000 customers in the next year or two. Already, EPB has more than doubled the number of TV, phone and Internet customers needed for the fiber optic system to break even and EPB expects to generate more than $130 million in revenues in the current fiscal year.
While utilities are often criticized by consumers because of their monopoly power, EPB emerged through its electric and fiber optic services as the top-rated utility in the country for TV and internet services, according to surveys of more than 172,000 subscribers of Consumer Reports magazine who rated their experience with home Internet, pay TV and telephone service.
Consumer Reports said EPB boasted a "better" ranking — the highest available — for value, reliability and speed. Most utilities, especially the providers of cable TV and other telecom services, fared far worse than EPB.
"Disenchantment with your cable TV service seems to be among life's certainties," Consumer Reports Senior Electronics Editor James K. Willcox said in the report that rated EPB No. 1 in the country for customer satisfaction among utilities providing telecom services. Wilcox calls EPB one of the few bright spots in an often maligned industry.
This was the first year a municipal broadband service has appeared in the annual Consumer Reports ranking. EPB may have gotten a boost in the ratings, he said, because it offers consumers a high-speed choice.
"When consumers are presented a choice, that alone makes them happy," Willcox says. "The average speed among survey respondents was about 25 megabits per second — and in Chattanooga, you're able to get a gig."
Last year, utilities generated the most consumer complaints of any industry in Tennessee, according to the state Department of Commerce and Insurance and its consumer affairs office. Nationwide, the Consumer Federation of America said utilities ranked behind only auto dealers and home improvement and construction firms for generating complaints to state and federal regulators.
In a competitive landscape with consumer choices, EPB emphasized its local ownership and staff, the speed and reliability of its service and its willingness to sign up customers without the contract requirements or installation fees of its competitors.
"We wanted to earn our business by treating customers like we would want to be treated, by doing what we said we would and not locking anyone into long-term contracts or offering only initial discount rates that quickly go away," said Shane Wallin, who supervises EPB installation crews. "When we go into people's homes, our installers put on blue booties and we take the time to make sure our customers know how to operate the equipment we install."
EPB is not always the cheapest service. Both Comcast and AT&T offer low-cost limited basic cable TV options at comparable rates to EPB and sometimes the major cable and phone companies have offered even lower discounted initial purchase offers for those who sign up for contract service. EPB's internet option for low-income Chattanoogans provides blazingly fast 100 mpbs speed. But its $26.99 monthly charge is nearly three times the $9.95 per month discounted rate offered by Comcast Essentials, which provides 10 mbps speed to low-income households.
But consumers say they still prefer the service, reliability and speed of EPB, according to market surveys.
Before fiber, EPB staffed its call center only half the day — from 7 a.m. to 7 p.m., — and relied upon answering services during off-peak hours. EPB installers in the electricity-only era did most of their work outside of homes or businesses and didn't have to explain how to use the product they delivered.
Twenty-five years ago, EPB had 16 customer service representative answering the phone when calls, complaints or billing questions arose. Today, that number is more than 80 persons who staff EPB's call center 24 hours a day.
"It's become a huge machine and one that we think really sets us a apart from our competition," says Karen Thomas, who has worked at EPB for 36 years and heads up the company's customer service call center. "The addition of fiber services has really changed what and how we do our business."
All new EPB employees go through a rigorous training process that ensures they not only know how to do the tasks they are assigned, but know why they are important to the overall mission of EPB. Customer service representatives get an average of three months of training to help prepare them to handle a myriad of different types of calls involving both power and fiber optic services.
"In the first week, we don't focus on the job, we focus on the culture of our company and why we are here and our mission," Thomas says. "Our employees are really proud of what we do and I think that shows in how we treat our friends and neighbors."
Critics of municipal broadband have questioned whether government-owned utilities, which don't have to earn a profit and often have borrowing advantages over private businesses, should compete against investor-owned companies. They suggest many of the advantages boasted by EPB were due to the $111.6 million federal stimulus grant awarded to EPB in 2010 to help build its smart grid.
Dr. George Ford, chief economist for the Phoenix Center for Advanced Legal and Public Policy Studies, said EPB got the equivalent of $2,000 per customer in federal subsidies. "The bet is so bad that no economic actor would do it, so you find some uneconomic political actor to do it, which immediately spells trouble," Ford says.
But backers of EPB's fiber optics network insist the utility's investment has already paid off in a smarter electric grid, better communications services and more economic development in Chattanooga.
An economic study last year by Benton Lobo, professor of finance at the University of Tennessee at Chattanooga, said EPB's fiber optics network in its first three years saved $130.5 million in power outages, boosted business energy efficiency by $234.5 million and spurred $461 million in new business investment.
DePriest sees EPB's pioneering venture in telecom as part of the utility's mission, not unlike its early role with the Tennessee Valley Authority to help electrify the previously depressed Southern Appalachian region.
"To me, the great game changers are those who are working for a greater good — something that will be a benefit to the community we all share.," DePriest says.
Of course, in a competitive market, others have boosted their Internet speeds and upgraded their customer service to keep or lure customers back from EPB. Comcast and AT&T both now offer different versions of gig service to businesses that connect to their fiber optic networks. Last year, Comcast hired more than 5,500 new customer service employees nationwide to improve its ability to meet maintenance and startup schedules. To prove how serious it is, Comcast offered that if a technician doesn't arrive on time for an appointment, Comcast automatically credit the customer $20.
EPB doesn't have such a guarantee, but Wallin said his installers work hard to stay on time and offer free advice to consumers about how to use their services. Surveys conducted by Wilkin Research for EPB continue to show the city-owned utility is rated the best for customer service, scoring significantly better than AT&T and Comcast.
"We live and work in this community and are committed to helping our neighbors and I think consumers recognize that," Wallin says.
Over time, Wallin said the smart grid and the fiber-optic network should be able to allow consumers the chance to monitor and control power functions in their home while they are away, helping to cut energy use or provide extra conveniences for homeowners.
"We've only begun to see all of the potential of our smart grid," he says.