TROY–A new sustainability index from the customer experience firm J.D. Power placed two Michigan utilities in the top five for sustainability among the nation’s electric utilities.
Detroit-based DTE Energy tied for fourth place and Jackson-based CMS Energy finished fifth.
However the index also found deep skepticism among utility customers about utilities’ sustainability claim, and that customers care more about affordability than the environment.
Across the nation, 82% of electric utility customers are served by a utility with a stated carbon-reduction target. However, only 19% of customers are aware of those targets, and just 26% believe U.S. utilities will ever achieve the goal of 100% clean energy, according to the index.
While consumer concerns about the seriousness of climate change remain high, more customers state the most important issue is affordability rather than the environment, the survey found.
“Electric utilities are in an incredibly tough spot when it comes to sustainability,” said Andrew Heath, senior director of utilities intelligence at J.D. Power. “They need customer support and participation in sustainability initiatives if they are ever going to reach their goals, but very few customers are even aware that these programs exist. In the long run, an inability to deliver on stated carbon reduction targets will negatively affect credibility and will give regulators and politicians a foothold for increased intervention and closer oversight. Now is the time for utilities to capitalize on widespread customer concern about climate change to proactively share the steps they are taking.”
Following are some key findings of the 2023 index:
* Low customer awareness for utility climate initiatives: Overall, just 19% of electric utility customers are aware that their utility has declared a goal to eliminate greenhouse gas emissions. The overall sustainability scores for electric utilities evaluated in the study—which are based on customer awareness, engagement and advocacy for their local utility’s climate initiatives—is 28 (on a 100-point scale), unchanged from 2022.
* Few customers feel utilities will reach their goals: Just 26% of electric utility customers say they believe utilities will reach their goal of 100% clean energy. Moreover, the number of customers who say they believe a lot can be done to reduce climate change has declined steadily to 37.3% this year from 40.3% in 2020. More than half (52.7%) of customers say they believe climate change is serious or very serious.
The Sustainability Index evaluates electric utility customer awareness, support, engagement and advocacy for their local utility’s climate sustainability programs and goals. The index applies to the 35 largest U.S. electric utility companies and cities, each serving 500,000 or more residential customers. The study is based on responses from 70,486 business and residential electric utility customers and was fielded from June 2022 through May 2023.
The highest-ranking utility on the index was California’s Sacramento Municipal Utility District. Tied for second were Juno Beach, Fla.-based NextEra Energy and Oregon’s Portland General Electric. Tied for fourth were DTE and Atlanta, Ga.-based Southern Co.
For more information about the Sustainability Index, visit www.jdpower.com/business/sustainability-certification-program.