Our Energy Retail business operates five main customer contact centres across central Scotland, north-west England and north Wales, including a Welsh language call centre. Customer calls are routed by payment type in order to provide a tailored customer experience. We responded to 7.1 million calls in 2010.

Since 2009, we have used a Virtual Call on Hold system to improve customer service. This tells customers their estimated waiting time if our Call Centres are busy when they call, and provides the option for us to call them back when they reach the head of the queue, or at a more suitable time, instead of holding to speak to an agent.

Customer Satisfaction

Domestic customer satisfaction, along with its constituent attributes, is measured annually via robust quantitative primary market research techniques. Computer-assisted telephone interviewing is combined with on-line surveys used to gain consumers' perceptions and expectations of all areas of ScottishPower's service that consumers themselves have deemed 'critical-to-quality'.

This research is complemented with further qualitative research every two-three years.

In 2010 we conducted three waves of Voice of the Customer research and interviewed 4,545 respondents in total. Of the 73 weighted service attributes that were measured, 48 remained steady, 8 declined and 17 improved.

VoC results were incorporated into the 2011 business planning process. One of the initiatives that was launched in response to customer research was the inclusion of video guides in the support section of our customer website, covering issues such as how to read a meter and how direct debit payments are calculated.

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External Benchmarks

We are aware of four organisations issuing substantive customer satisfaction studies:

• uSwitch.com (Independent Customer Satisfaction Report)
• J.D. Power and Associates (2009 UK Electricity and Gas Supplier Customer Satisfaction Study)
• Which? Switch (Satisfaction Survey)
• The UK National Customer Satisfaction Index

During 2010 ScottishPower came top in the UK National Customer Satisfaction Index of energy utilities, with a 10% improvement in the company's score.

The company scored below average in the JD Power & Associates survey in 2010, but was middle of the field overall and rated 3rd among the UK's largest suppliers for customer satisfaction in the survey conducted by Which?

ScottishPower also improved its customer satisfaction rating by 10% in the uSwitch survey, taking 3rd position overall.

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Customer Complaints (Energy Retail)

When a customer chooses to make a complaint to ScottishPower, we follow a tight Complaints Handling Procedure to resolve the issues as quickly and satisfactorily as possible. Where possible, we will resolve the issue during the call. If this is not possible, we will provide a unique complaint reference number and will pass the issue to one of our specialist Customer Care Teams. The complaint is then assigned to a dedicated complaint handler, who keeps the customer informed of progress until the complaint is resolved.

ScottishPower complies fully with Ofgem's complaint handling standards and the majority of complaints are responded to by the end of the next working day.

Consumer Focus and the UK's major energy suppliers worked together throughout 2010 to develop and implement a new way of reporting complaints performance across the industry. The new approach seeks to give customers greater visibility of a supplier's complaints performance. It ranks overall performance using five metrics, including referrals to Consumer Direct, Consumer Focus and the Energy Ombudsman.

The number of complaints to UK consumer bodies is shown in the table below.

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Customer Service (Energy Networks)

Our Energy Networks business, which manages the company’s electricity transmission and distribution systems, operates two call centres at Kirkintilloch, Glasgow and Prenton, near Liverpool and handled 544,235 calls in 2010.

Energy Networks received a total of 17,006 customer complaints and many thousands of enquiries in 2010, mainly due to supply interruptions and associated claims.

During 2010 we overhauled our customer service operation. The process began during the summer with a comprehensive customer research programme, involving focus groups of customers who had experienced an unexpected loss of electricity supply, as a result of a fault on the network.

Focus group sessions were held at eight locations – four in Scotland and four in England and Wales to map the customer experience and ask them how we could have performed better. The focus groups were spread over a combination of rural and urban customers.

We also conducted customer research on complaint handling, on the management and communication of planned outages, and on the processes involved in new customer connections.

Feedback from customers on actions they felt we should take have been used to develop a new customer service strategy and fed in to the operational plan.

Changes we made during 2010 include:

• Ensuring our emergency telephone number is easy to find in the phone book and well communicated via other channels
• Revisiting the way we tell customers about planned outages, to ensure information is clear and easy to understand
• Improved the communication process between engineers in the field and customer contact staff to provide more accurate information on fault restoration times
• Tightening up our complaint handling process
• Customer service and field staff jointly developed a scorecard to monitor progress. Monthly meetings are held to discuss performance and develop actions

One of the most significant changes is the improvement in communication between field staff and the control centre. This enables us to give more frequent updates on the length of time it will take for electricity supplies to be restored following a fault.

Information fed back from engineers in the field is put on the IVR telephone system for customers to check, but in addition, we proactively call customers back with an update and also send text messages.

As a result of the changes, our customer service ratings in the Ofgem performance tables (for the two Distribution Network Operator companies SP Distribution and SP Manweb Distribution) have climbed from 10^th and 11^th in early 2010, to 3^rd and 4^th in early 2011 out of 14 Distribution Network Operators.

We will be continuing with a major programme of customer research during 2011, with a view to making further improvements. In addition, work began in autumn 2010 to establish an online community of Energy Networks customers. We will feed in themes to the community and seek feedback. The new online community will be launched during 2011.

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Network Performance

We continued to invest in our networks during the year to reduce the number and duration of interruptions to power supply experienced by our customers. Our five-year investment plan for 2008-2013 involves the upgrading and modernisation of the overhead line network, substations, underground cables and network protection systems in our Scottish and Manweb network territories.

We are also reinforcing the network to accommodate growing numbers of renewable energy projects, such as windfarms, which also helps to increase network resilience and safeguard supplies to customers. Investments in our networks from 2008 to 2013 is expected to total more than £2.3 billion.

The performance of our networks is measured by recording customer interruptions (CI) and Customer Minutes Lost (CML). These figures are compiled from April to March and submitted to Ofgem to include in its Electricity Distribution Quality of Service Report.

ScottishPower operates two distribution systems – ScottishPower Distribution (SPD), covering south and central Scotland and ScottishPower Manweb (SPM), covering Merseyside, Cheshire and north Wales. One of our key targets for 2010 was to meet the Quality of Supply targets set by Ofgem.

Targets for Customer Interruptions, which are measured by the number of customers (per 100 customers) that are affected by power cuts lasting three minutes or more, were met by both SPD and SPM in 2009/10.

Targets for Customer Minutes Lost – the average number of minutes that a customer is without power for three minutes or more due to a power cut – were fractionally short of the Ofgem target.

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Network Innovations

Energy Networks has started to roll out the usage of TP-22 cable fault locators to identify the location of transient faults on the low voltage network. A trial of 40

TP-22 devices has improved fault finding, reducing the number of excavations required and minimising the number of interruptions to customers. A further 40 devices will be introduced in 2011.

A complementary tool, the CableSniffer, is also helping to pinpoint underground cable faults on the low voltage network. The CableSniffer probes the ground to detect the gases released during a cable arc fault. This allows a fault to be located and repaired quickly, minimising disturbance to the customer, and without the need for repeated excavations.

In addition, a cable fault monitor is being developed to gather fault location information on the 11kV network. The monitors will be installed at primary substations to provide distance-to-fault information in real-time, narrowing down the location of the fault. This will benefit the customer by enabling supplies to be restored more quickly.

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