Benchmarking performance levels of distribution companies

Abstract

Summary form only given. Benchmarking is a practice of assessing a company's performance relative to that of other companies, or with respect to some theoretical "best that can be done". Companies can be compared with respect to almost to any metric, but it is common to compare financial results, system performance such as reliability, level of customer service, or customer satisfaction. In the electric utility industry, deregulation and other changes have focused more attention on the practice of benchmarking. Utility management has turned to benchmarking as a way of measuring how their company stacks up against other companies. Regulators are investigating the use of distribution company benchmarking as a means of establishing regulatory policy. Even customers are using benchmarking to determine the level of service and reliability provided by their distribution company, comparing their performance to the level provided by other companies, and using this information as leverage with their present service provider. In re-regulated markets, some distribution companies are exploring options for providing premium services, such as increased reliability, service quality, green power, or new customer service options. However, none of these can be properly designed and priced, and the markets cannot be developed, unless the corresponding baseline service levels are defined. In addition to electricity providers and carriers, such baselines are also being considered by the regulators in setting performance standards. One approach is to use benchmarking of various companies to establish baseline service levels.