March 5, 2003

Contact: Richard Claeys (408) 867-6430

BUCKING THE TREND: DESPITE NEGATIVE NATIONAL HEADLINES, MORE U.S BUSINESSES EXPECT TO EXPAND OVER NEXT YEAR, SAYS NEW RKS SURVEY

Improving Value, Service & Image Measures Raise Utility Performance & Satisfaction Scores; Businesses Show Growing Interest in "Green" Power Options

NORTH SALEM, NY-While 2002 may be remembered as a year of unending bad news for the energy industry, businesses served by the nation's utilities send a positive message, with a significant number of companies indicating plans to expand their operations and delivering higher ratings for most aspects of energy provider performance, according to a new independent national survey.

Looking beyond the present sluggish economic conditions, a quarter of U.S businesses surveyed plan to expand their operations over the next 12 months-more than four times the number of businesses expecting to downsize or reduce their operations in 2003. Employers in this latest national survey register an optimistic 7.6 on the 0 (not likely to expand) to 10 (very likely to expand) scale.

In the same nationwide survey, some two out of three American businesses-68 percent--give their energy utilities high marks for overall customer satisfaction, a significant improvement from the 53 percent level reported in 2001. These same customers rate their utilities more favorably than a year ago in such key areas as image, relationship, and service, according to the survey.

Companies in this sample of U.S. businesses say they are receiving greater value for their energy expenditures than a year ago. Expressed levels of trust in the local utility and its management increased, despite the many headlines about energy industry trading, credit, and executive credibility issues.

In a major shift, the survey finds that the perceptual gap between "choice" and regulated states has closed: businesses now rate their utility similarly on price and value, regardless of the status of deregulation in individual markets.

Confirming the slowing pace of electricity deregulation, just one in four survey respondents now say they have a choice of energy suppliers, according to the survey. But within this total, a substantial majority-70 percent-expect to stay with their current provider. Only six percent decided to change to a different supplier in 2002, according to the survey.

The nationwide survey also uncovers a growing interest among business customers in environmentally sensitive "green" power. More than a quarter-27 percent-of these firms report they now have the option of purchasing "green" power, a major increase from the 10 percent level reported in 2001. Participation is up as well-38 percent of business customers have selected this alternative power source, up from 24 percent a year ago, according to the survey.

These results are part of the year end 2002 National Business Customer Assessment conducted by RKS Research & Consulting, a nationwide market research and public opinion polling firm. At year end 2002, RKS had completed 1,304 in-depth telephone interviews with U.S. businesses. Participating firms included 864 medium-large commercial and industrial customers, plus an additional 440 interviews among small businesses.

The positive trends from the RKS survey extend even to California, where business customers cite performance improvements by their local utilities. But California utilities still lag national norms in such key areas as trust, service, and overall satisfaction, according to the survey.

While American businesses praise the performance of their local utilities, these same customers are more critical of the performance of state regulators overseeing the business. For instance, businesses give regulators a middling 5.2 on a 0 ("poor") to 10 ("excellent") scale for overall performance. California companies rate their state's regulators even lower-only a "3" on the 0-10 scale, representing a further decline from a year ago.

The RKS analysis attributes the improvement in national business customer opinions of utilities to two factors: outage-related events and communications, plus the management of account relationships. While the mild winter of 2001 saw fewer outages and interruptions, for example, business customers recall improvements in outage-related communications, especially status reports of estimated restoration times, according to the findings.

Likewise, the number of businesses with an assigned utility account representative increased substantially in 2002, according to the data, leading to a measurable decline in business calls to utility service centers. This perception of increased personal attention results in improvements in utility image and relationship scores for 2002, according to the RKS survey.

"These improved results show that utilities are addressing the right issues-and their customers are recognizing the difference," said David J. Reichman, RKS chairman and chief executive. "The findings from this survey demonstrate the premise that sound strategic investments in improved personal relationships-from account representatives to CRM technology and call centers-can have a direct and positive impact on the satisfaction and performance perceptions of business customers."

In addition to the analysis of utility performance and satisfaction results, the RKS National Business Customer Assessment compares and contrasts findings by both national and regional measures. The proprietary RKS Business Performance Record uses a statistical model to explain the major influences on utility performance, such as power delivery, service, relationship and price.

Now in its 30th year of business, RKS Research & Consulting designs and conducts both syndicated and customized market research and public opinion polling for energy and natural resources clients, including their major associations. RKS operates from headquarters in North Salem, NY, plus field offices in New Jersey, Florida, Ohio, and California. Further information is available at: www.rksresearch.com.