Q.Please State Your Name and Address

Q.Please state your name and address.

A.My name is Wayne Hart. My business address is 472 West Washington, Boise, Idaho.

Q.By whom are you employed, and in what capacity?

A.I am employed by the Idaho Public Utilities Commission (IPUC; Commission; Staff) as a Utilities Compliance Investigator in the Consumer Assistance Section.

Q.What is your educational background?

A.I received a Master's Degree in Bacteriology from the University of Wisconsin in Madison, Wisconsin, and a Bachelor's Degree in Biological Sciences from Indiana University in Bloomington, Indiana.

Q.Please outline your experience that is relevant to your testimony?

A.I have served as a Utilities Compliance Investigator since May of 1994, and have handled nearly 2500 complaints, comments and inquiries, with over 1500 of those involving telecommunications issues, since joining the IPUC Staff. I served on the Staff team that performed a service quality audit of U S WEST in 1995 and 1996 for Case No. USW-S-95-4.

Q.Have you previously testified before this Commission?

A.Yes. I presented testimony in Idaho Power’s general rate case in 1995, and served as a consultant to an intervenor on solar water heating in 1980.

Q.What issues will you be addressing in your testimony?

A.I will address U S WEST Communications, Inc.'s (U S WEST; USW; Company) performance with respect to service quality, held orders and other customer service issues and the adequacy of the efforts the Company has undertaken to improve its performance. Staff witness Carol Cooper will also address a number of Company performance issues in her testimony.

I will then recommend the disallowance of certain expenditures the Company has incurred as a result of a lack of adequate service quality, changes in the Company’s Service Guarantee Program, and recognition of the Company’s record of poor customer relations and service quality in its authorized return on equity until performance reaches an acceptable level. I will recommend interim performance standards that the Company should be required to meet.

I recommend that the Company’s Toll Restriction service be considered a Title 61 service and that the Company’s recurring fees for providing this service be discontinued. I will recommend that the Company either update the maps upon which it bases the Zone Connection charges or stop collecting such charges.

I will also recommend that the Company revise the language of the tariff regarding special construction charges, as well as the sections for measured service, to reduce the potential for inequitable applications of these tariffs.

Q.Are you sponsoring any exhibits in this case?

A.Yes. I am sponsoring Exhibit Nos. 118-126 as part of my testimony.

CUSTOMER RELATIONS

Q.Please describe the method by which you gauge regulated utilities’ performance in the area of customer relations.

A.The primary means by which the Commission Staff is able to assess utility customer relations is through analysis of complaints, inquiries, and comments made by regulated utilities’ customers to the Commission’s Consumer Assistance Staff. The Staff analyzes its investigatory records to get both a statistical and substantive picture of what problems customers are having, what is causing those problems, how or whether those problems are being resolved, and what could be done to prevent similar problems from recurring in the future. Complaints, inquiries and comments are categorized and coded to facilitate retrieval and information gathered in the course of investigating and resolving a dispute or providing a response is analyzed.

Q.How do you determine whether the number of complaints, comments or inquiries are significant?

A.We look for trends, as well as compare the number received by one utility with the number received by other utilities. If a particular utility is experiencing an increase in the number of complaints in a particular area, then the mere fact that it is increasing is important information. It is even more revealing if one utility is going up and other utilities are not.

Q.Can you really compare the performance of a telephone company with that of an electric company?

A.On an overall level, yes. While there are differences, there are a substantial number of similarities that make such a comparison valid. While such comparisons should not be used as the only evaluation tool, they do provide useful information, and Staff’s experience has been that such comparisons are a reliable indicator of a utility’s overall performance.

Q.Your analysis is of “complaints, comments and inquiries” received by the Consumer Assistance Staff. Could you explain what these include?

A.These include consumers who contact the Commission with either a complaint about a utility’s performance in some manner, a comment about something the utility has done or proposed to do, or an inquiry about some aspect of a utility’s operation. In general, Staff divides these contacts into two groups: 1) complaints that require further investigation and analysis, which typically involves contacting the utility for additional information, and 2) comments that document information provided by the consumer and inquiries that can be answered by providing the consumer with information. Although an inquiry may involve limited research in order to answer a consumer’s question, investigated complaints involve in-depth investigations and analysis. The calls, letters and other contacts made by consumers expressing an opinion about this rate case would be an example of a comment.

For ease of reference, I will refer to the combination of complaints, comments and inquiries as “consumer contacts”. Investigated complaints will be referred to as “complaints” or “investigations”.

Q.Do these numbers represent every consumer who contacts the IPUC?

A.No, consumers who contact the IPUC are asked if they have contacted the utility about their concerns first. Those who indicate they have not done so are referred back to the utility, to provide the utility an opportunity to resolve the customer’s concern before they talk with an investigator.

Q.Comments and inquiries are obviously treated differently from complaints. Are the number of comments and inquiries also an indicator of a company’s performance?

A.Yes, when viewed as a whole, especially on a comparative basis, the total number of consumer contacts can provide very useful information. This total number tracks very closely with other indicators of performance, and the experience of the Commission Staff, as well as staff at other commissions, has been that it is a reliable tool for indicating overall performance.

Although I would agree that some individual comments or inquiries may not be indicative of a utility’s performance, many of the consumer contacts that would be considered a comment are expressions of concern about a utility's actions or policies, which can be a very good indicator of performance.

For example Staff Exhibit No. 118, Schedule 1, documents the problems encountered by a customer from Meridian who experienced delays and a major hassle in obtaining phone service upon moving to a new location. The customer simply wanted the IPUC to know the trouble some customers had to go through to get service from U S WEST. Because the customer’s service was working properly by the time Staff was able to return the call, and Staff was already familiar with the circumstances which caused the delay, no further investigation was necessary. However, this customer’s call is an indication that the Company was not providing service in a timely manner.

Q.Do consumers who contact the Commission represent the bulk of customers who have experienced problems with a utility?

A.No. Although consumers who call the IPUC provide valuable insight into customers' interactions with utilities, those who take the extra effort to contact the Commission represent only a fraction of the total universe of problems encountered by customers.

For example, based upon the data provided to the Commission in a briefing by U S WEST on October 9, 1996, almost 12,000 customers in southern Idaho experienced a delay in the installation of their phone line in the first eight months of 1996. However, the IPUC only received 146 calls from U S WEST customers indicating they were experiencing such a delay during those same eight months.

Q.Do you have other evidence that supports the claim that the number of customers who call the IPUC about problems is only a fraction of those experiencing the problem?

A.Yes. There have been a number of studies which indicate that only a small percentage of those who experience a problem with utility service will complain about it to the utility, and only a portion of those will take it further and report it to a third party, such as the Commission. Staff Exhibit No. 119 shows that of all those consumers who experience a problem, only a portion of them will perceive, or be aware of the problem. This group can be divided into those who will not be motivated enough to take any further action, and those that are so motivated that they take a personal action. Of those motivated enough to take an action, a portion will take the action of calling the utility. The group that calls the utility will be further divided into those who are satisfied by the utilities' action or response, and those who are not satisfied. Of those who are not satisfied, only a portion will be motivated enough to contact a third party such as the IPUC.

A study prepared by Theodore Barry and Associates/SMB Associates found that more than 20% of a utility's customer base will encounter a problem during a year. For one midwestern telephone company, more than 45% of those who had a problem did not complain to anyone. The study estimated that only 5% of those who experience a problem make the effort to complain to a utility executive (as opposed to front line employees) or the utility regulatory commission.

The complaints received by the Commission from customers of United Water of Idaho who were experiencing water quality problems follows this pattern very closely. United Water has indicated that 9 of its 52 wells have high levels of iron, the main source of the problem, and these wells are the primary source of water for a large, multi-block area. Staff estimates that the number of customers living in this area would be well into the thousands. The Company reported they had been contacted by 37 customers in the past year who expressed concerns about their water quality, and in the same time period the Consumer Staff was contacted by only 4 customers about this problem.

Q.Does Staff track any other indicators of U S WEST’s customer service performance?

A.Yes. There are a number of different ways of examining the consumer contact data that provides more direct information about a company’s performance. One is the number of consumer contacts that is actually followed up by Staff with an investigation. Typically, in such cases, the consumer has indicated a specific concern or complaint and the investigator will obtain detailed information about the specific incident or issue from the consumer. The investigator will then contact the utility to get its side of the story. If the matter is still pending, the investigator will serve as a mediator to try and resolve the customer’s concerns.

A second approach is to look at the number of instances where there is a change in the utility’s position or approach to a customer’s concern after the consumer has contacted the Commission.

In addition, Staff can examine the number of investigations regarding specific issues, such as a delay in providing service (which Staff refers to as a held order), or repair delays or other instances of impaired service. I will be presenting an analysis of these indicators. Staff witness Cooper will discuss investigations regarding billing and credit problems experienced by consumers. The number of investigations for each of these specific issues is a direct indicator of a company’s service quality performance.

Q.Does the Company provide data that can be used to evaluate performance?

A.The Company’s Basic Service Measurement (BSM) Report, which is now provided to the Commission on a monthly basis, includes eight specific measurements of the Company’s ability to provide and maintain service. These eight measurements include missed commitments for both repair and installations, installation and repair intervals, held orders, and business office and repair office access.

The Company also reports on their performance with respect to restoring service outages per Customer Service Rule 503, IDAPA 31.41.01.503. This rule requires telephone utilities to generally restore a service outage within 24 hours of the time the outage is reported to them. Utilities are to meet this requirement 90% of the time.

Q.Have you analyzed the complaints, comments and inquiries regarding U S WEST?

A.Yes. For this particular case (USW-S-96-5), I have examined the total number of consumer contacts and the total number of investigations. I then focused on U S WEST’s performance with respect to installation and held order issues, as well as repair and other service outage or impairment issues. I also looked at the relationship that the problems in this area have with other related customer service issues. Because this case only pertains to U S WEST’s southern Idaho service territory, records involving U S WEST’s northern Idaho customers have been excluded from the analysis.

Q.What were the results of your analysis?

A.Consumer contacts concerning U S WEST have reached an unprecedented level. The Company’s performance has deteriorated especially rapidly in the past two years and is clearly worse than the other major utilities in Idaho.

Schedule 1 of Staff Exhibit No. 120 shows the total number of complaints, comments and inquiries received by the IPUC Staff regarding U S WEST from the years 1987 through the third quarter of 1996. As this graph clearly shows, the number of customer contacts remained relatively stable from 1987 through 1994, with the exception of a spike in 1991 that is related to a controversial Caller-ID proposal. The gradual increase from 1987 through 1994 is approximately double the net increase in the number of lines the Company reported. However, the number increases dramatically from 1994 to 1995, rising more than 85% in that one year. The increase continues between 1995 and 1996, rising an additional 55%, for a two-year gain of more than 185%. I have calculated an annual number for 1996, as I have in all the graphs I will present, based upon the numbers from January 1 through September 30, 1996.

As can be seen in Schedule 2 of Staff Exhibit No. 120, which includes this same type of information for other major utilities serving Idaho customers, the increase from 1987 through 1994 for U S WEST is similar to the increases other utilities were also experiencing. However, in 1995, the number for U S WEST increased dramatically more than it did for the others, and based upon the number received through September 1996, they will reach even higher levels this year.

Q.What issues did the consumers whose complaints were investigated raise?

A.Schedule 3 of Staff Exhibit No. 120 provides more detailed information on the number and subject matter of the complaints received during the past five years.

The red band at the bottom of each bar is for held order investigations. The blue band above it is for service or repair-related investigations. While there have been increases in other categories as well, these two account for the majority of the overall increase.

Q.What were the results of your examination of the number of investigations conducted by Staff?

A.Staff Exhibit No. 120, Schedule 4 shows that the number of investigations of U S WEST required to be conducted by Staff has also increased at an alarming rate in the past two years. The general shape of the line representing the investigations conducted on U S WEST is very similar to that for the total consumer contacts as shown in Staff Exhibit No. 120, Schedule 2, and confirms that the Company’s performance has deteriorated rapidly in the past two years, and is clearly worse than the other major utilities in Idaho.

Q.U S WEST serves more customers than the other utilities. Could that explain the differences?

A.Staff Exhibit No. 120, Schedule 5 shows the results when the size of the utility is taken into account by looking at the number of investigated complaints per thousand access lines or gas/electric meters. The drastic increase in the number of investigations is also evident when examined this way as well. From 1994 on, U S WEST had the highest number of investigations of all major utilities, with 1996 complaint levels projected to exceed 2.5 complaints per access line, a full percentage point above that of the next highest utility, Idaho Power.

I limited the report to the larger utilities, as their size tends to dampen the effects of specific or random events, which might not be indicative of overall performance. In terms of the number of access lines, U S WEST is the largest utility shown on this graph. That size, plus the continuous nature of the increase, would indicate that this upward trend in complaint levels is a very valid indicator of a decline in service quality.

Q.Is this a trend that other utilities are also experiencing?

A.No. While there has been somewhat of an increase for most of the other utilities, none of them has experienced anything like that of U S WEST, in terms of the severity of the amount and rate of the increase, or the extended duration of the problems.