Benchmarking Service Quality in UK Electricity Distribution Networks

Purpose – The purpose of this paper is to review the evolution and development of customer service

performance measures in the electricity sector since privatization in 1989, and then examine the impact

of a specific recent energy regulatory requirement (known as information and incentives project (IIP))

on the organizational management of an exemplar electricity distribution company. Also discussed is

how the sector has tried to learn from benchmarks from a number of such literary disciplines as

economics, marketing service quality, and total quality management.

Design/methodology/approach – The research first presents a survey of the historical development

of performance standards based on archival documentation. It is then augmented by the employment of a

longitudinal “tracer study”, involving the isolation and firsthand real time qualitative observations of a

company’s key strategic and operational activities, to understand how they related to the other

organizational phenomena at large. This process spanned an investigative period of two years.

Findings – The paper finds that much of the early standards used in electricity immediately after the

sector’s privatization rested much on those in the water and gas safety sectors, which themselves were

then admittedly inadequate in UK. The IIP, a complementary set of service quality standards,

worked on these early problems, but the implementation of the new scheme proved problematic and

warranted major organizational reengineering, as shown in the exemplar company, ElectriCo. IIP has

impacted on organizational management mostly in the areas of: higher-level strategic change, causing

noticeable internal confusion during strategic transitions, building a performance management

system, improvements in performance data, and establishing more effective ways for management.

Research limitations/implications – While the case example used in the research is a regional

monopoly and is a good representation of the context in which the service standards operate, the

findings are limited to the one company. It is a UK specific context without international comparison.

Originality/value – The research has combined archival research with an innovative firsthand

methodological approach (tracer studies). Its value is in how the story of service standards in

electricity (and specifically distribution) has been augmented from the early customer service

standards to the most recent IIP considerations. It also looks from within the company, which has been

missing in longstanding research in the more traditional disciplines such as economics.