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Aging infrastructure weighs heavily on water utilities, study finds

  • Aging infrastructure weighs heavily on water utilities, study finds

About the entity

J.D. Power
J.D. Power is a global leader in consumer insights, advisory services and data and analytics. These capabilities enable J.D. Power to help its clients drive customer satisfaction, growth and profitability. Established in 1968.

The US Environmental Protection Agency (EPA) estimates that $473 billion in drinking water infrastructure investment will be needed during the next 20 years as aging pipes and treatment and storage facilities require upgrades and replacement. According to the J.D. Power 2019 Water Utility Residential Customer Satisfaction Study, the ability of water utilities to successfully manage that process will increasingly be determined by how well they communicate with customers while also minimizing service interruptions and quality issues.

“The good news is that customer reports of water quality issues have been declining steadily from the highs we saw in 2016, and that’s having a positive effect on water utility customer satisfaction,” said Andrew Heath, Senior Director of the Utility Practice at J.D. Power. “However, water utilities nationwide are staring down a period of massive infrastructure investment, construction and possible disruption. Effective communication will be critical throughout the process.”

Following are key findings of the 2019 study:

  • Water quality problems decline: Reports of water quality issues have declined to 29% of all residential water customers from a high of 34% in 2016. The most frequently cited quality issues are low water pressure (12%) and bad taste (10%).
  • Water quality and service interruptions still present serious challenges: Water quality issues and service interruptions have the most significant negative effect on water utility customer satisfaction. Water quality issues, such as low pressure or bad taste, are associated with a 104-point decline (on a 1,000-point scale) in customer satisfaction scores, while service interruptions are associated with a 50-point decline in customer satisfaction.
  • Customer awareness of infrastructure investment drives goodwill: Customer awareness initiatives focused on infrastructure investments can significantly offset declines in customer satisfaction. Satisfaction among customers who are aware of utility efforts to replace old water infrastructure are 48 points higher, on average, than among those who are unaware of such efforts. Additionally, satisfaction among customers who say their water utility does a good job maintaining current infrastructure are 248 points higher, on average, than among those who are unaware of utility infrastructure investments.
  • Proactive communications have powerful effect, but few utilities deliver: Overall satisfaction scores are 84 points higher when customers recall receiving a proactive communication from their utility (e.g., phone call, e-mail, text message, social media message) than when customers do not recall a proactive communication. Despite the powerful effect proactive communication has on customer satisfaction, just 28% of water utility customers recall receiving any communications from their utility.

Study Rankings by Region

The following utilities rank highest in customer satisfaction in their respective region:

  • Midwest: Indiana American Water (759)
  • Northeast: NYC Environmental Protection (750)
  • South: Cobb County Water System (782)
  • West: San Gabriel Valley Water Company (749)

The Water Utility Residential Customer Satisfaction Study, now in its fourth year, measures satisfaction among residential customers of 89 water utilities that deliver water to at least 400,000 customers and is reported in four geographic regions: Midwest, Northeast, South and West. Overall satisfaction is measured by examining 33 attributes in six factors (listed in order of importance): delivery; price; conservation; billing and payment; communications; and customer service.

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