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1999 Mastio Natural Gas Pipeline Survey

1999 Mastio Natural Gas Pipeline Survey. DRAFT. In-depth Results for NNG Pipeline March 03, 2000. High Score. 100. 90. 80. 70. 60. NBPL TW NNG FGT All others. 50. 40. 30. 20. 10. Low Score. 0. Mastio Index Rankings for Interstate Pipelines.

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1999 Mastio Natural Gas Pipeline Survey

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  1. 1999 Mastio Natural Gas Pipeline Survey DRAFT In-depth Results for NNG Pipeline March 03, 2000

  2. High Score 100 90 80 70 60 NBPL TW NNG FGT All others 50 40 30 20 10 Low Score 0 Mastio Index Rankings for Interstate Pipelines The industry mean bar was raised by 2.2% from 1998 to 1999. Northern’s average score improved by 4.8%. Conclusion: Northern’s overall ranking increased significantly from 33 out of 46 to 20th out of 50th. An increase of 13 positions.

  3. Glossary of Terms • Mastio index - a composite of the customer overall satisfaction and pipeline preference based on all attributes measured, weighted by the customer needs as defined by all 1,257 customers surveyed. The overall scores are converted to a 100 point scale with the higher score be preferable. • Mean - the average score of the information extracted from the number of respondents; thus, the mean can vary depending upon the data extracted. • Industry group - industry respondents • Focus group - NNG provided customer list to Mastio • Industry mean - the average score from all 1,257 industry respondents • Focus group mean - the average score from all 26 focus group respondents • Commercial - marketing • Commercial support - market services • Attributes - Mastio provided statements ranked by respondents on a scale of 1 to 5 • Score/Rating - the respondents used a scoring system of 1 to 5 with: 1 = Excellent 2 = Good 3 = Average 4 = Below Average 5 = Poor

  4. Attributes Top 15 Attributes ranked in order of importance by all industry respondents in 1998 1. Transportation pricing is competitive 2. Dependability in agreements and commitments 3. Timely notifications before initiating restrictions 4. Accuracy in scheduled gas volumes 5. Accurate measurement of volumes 6. Reliability of primary firm gas transportation 7. Gas metering systems are accurate 8. Ability to negotiate discounts 9. Attitude of continuous improvement 10. Reps who listen well 11. Availability of capacity 12. Simple and straightforward scheduling 13. Responsive sales and service personnel 14. Pipeline understands your needs 15. Real-time pipeline operations information New Attributes added in 1999 and not yet ranked by industry 1. Trustworthiness of pipelines 2. Internet/EBB access to pipeline information

  5. NNG FOCUS GROUP

  6. Customer Focus Group Focus Group Respondents % of Revenue Minnegasco 17.07% Utilicorp 13.15% Mid America 10.06% Metropolitian Utilities District 4.29% Alliant (WPL , Interstate Power) 3.15% Mobil Natural (Duke Energy) 0.93% Cibola Energy 0.70% Royster Clark Chemical (IMC Nitrogen) 0.59% Wisconsin Electric Power 0.58% Pan Alberta Gas 0.55% Farmland Industries 0.38% U.S. Energy 0.31% Tenaska Marketing 0.29% GPM 0.16% Kaztez Energy 0.07% 52.26% TOTAL Note: NSP with 11.27% of revenue, NiCor 3.37%, Wisconsin Gas 2.98%, and Oxy .41% did not respond.

  7. Customer Focus Group • The following focus group customers were identified based on available data: Cibola Utilicorp MUD U.S. Energy Minnegasco Kaztex Pan Alberta Superior W&L MidAm Duke (Mobil) Tenaska Farmland Wepco IMC NItrogen GPM Pan Alberta

  8. Customer Focus Group • Comments from customers on service improvements: • “Storage is too limited. Minimize entitlements.” • “Create additional pooling points. Administrative improvement.”Note,Mid17 was added after the Mastio survey was completed. • “Improve measurement.” • “Be flexible with current delivery rates and with operational problems.” • “Available capacity into markets.” • “Restrictions on intraday nominations.”

  9. Customer Focus Group(cont’d) • Customers planning to switch pipelines in the next two years. • Three LDC’s in Wisconsin • LDC in Iowa • Northern’s average *rating by Focus Group customer type of the 40 attribute questions. • Focus Group 2.41 • LDC Group 2.50 • Large Industrial 2.43 • Marketer Group 2.49 • Producer Group 1.97 • Utility Electric Generation 2.29 • Conclusion: Our customers rated us good to better than average, with the Producer Group rating us the best. Rating Scale: 1 = Excellent, 2 = Good, 3 = Average, 4 = Below Average, 5 = Poor

  10. Customer Focus Group (cont’d) • NNG average *ratings by Focus Group activity type of the 40 attribute questions. • Commercial support 2.35 • Commercial 2.61 • Conclusion: The commercial support and commercial group rated NNG good to better than average. *Rating Scale: 1 = Excellent, 2 = Good, 3 = Average, 4 = Below Average, 5 = Poor

  11. Northern Natural Gas Top 5 Strengths & Improvements Rated by Focus Group on the 40 Attribute Questions Areas of Strengths Areas of Improvements* • Simple and straightforward scheduling (rating 2.90/mean 2.44) • Gas pooling and aggregation services (rating 2.88/mean 2.47) • Accurate measurement of volumes (rating 2.40/mean 2.03) • Accuracy in scheduled gas volumes (rating 2.20/mean 1.87) • Ability to nominate multiple receipt and delivery points with firm (rating 2.26/mean 1.98) • Internet/EBB access to pipeline information • Use of electronic bulletin boards • Ability to negotiate discounts • Access to diverse supply • Responsive sales and service personnel *Note: Even though these are below the mean, NNG received a slightly above average to good rating. The scoring of each attribute is based on a scale of 1-5, 1 being excellent.

  12. Focus Group CommentsSpecific to NNG • Pipeline feature that allows for easy transportation of natural gas. • LDC: “Pooling.” • Element or feature of pipeline that hinders transportation of gas. • LDC - “Physical constraints and lack of interruptible service.” • LDC - “Sometimes gas flow slows down running north to south.” • Large industrial - “Restrictions on intraday nominations.” • Competitive advantage of preferred interstate pipeline. • Producer/Marketer - “Company able to spin off and competitive rates.” • Biggest improvement experienced with pipelines in the last 12 months. • LDC - “Settlement of imbalances and monthly cash outs on invoicing.” • LDC (C) - “Creation of additional pooling points. Administrative improvement.” • LDC (CS) - “Flexibility in pooling.” • Marketer - “Timely consumer service response.” • Marketer - “ E-commerce.” • Large industrial - “Upgrading of HotTap nominating system.” • Producer - “EBB systems and other nomination systems.”

  13. Focus Group Comments (cont’d)Specific to NNG • Message for pipeline companies. • LDC - “You place too much emphasize on operating revenue.” • LDC - “Treat us as a customer and respond to our changing needs.” • Marketer - “Need negotiated rates.” • Marketer - “Improve measurements.” • Large industrial - “Very difficult to deal with.” • Large industrial - “Good intraday service.” • Producer - “Be flexible with current delivery rates and with operational problems.” • Improvement requests. • LDC - “Better attitude and increased capacity and flexibility.” • Marketer - “Understandable tariffs.” • Producer - “Faster nominations.” • Pipeline feature that allows for easy transportation of natural gas. • LDC - “Nomination system.” • LDC - “Group dispatch and market wide rates.” • Large industrial - “HotTap nomination system.”

  14. Focus Group Comments (cont’d)Specific to NNG • Biggest disappointment experienced with pipelines in the last 12 months. • LDC - “They continue to tighten down operating procedures. Corrected ? No.” • LDC - “Available capacity into markets and tightened operational constraints. Corrected? No.” • Marketer - “Misinterpreted a provision in a tariff and didn't communicate it to the marketing representatives and measurement problems. Corrected? No.” • Producer - “Setting up EBB systems for Internet access. Corrected? No.” • Respondent's perception of being appreciated by pipelines. • LDC - “Yes, tries to improve communications.” • LDC(C) - “No, their only concern is the drive to increase margins” • LDC (CS) - “Yes.“ • Marketer - “Yes, good customer service.” • Marketer - “Yes, we promote competition.” • LDC - “Yes, they have good representatives.” • Large industrial - “Yes, good customer service.” • Producer - “Yes, they try to listen and work with us.” • Requested improvements in electronic communications and processing. • Producer - “Faster EBB access.”

  15. COMPETITION

  16. Competition The top 15 attributes plus the two new attributes for 1999 ranked by the Industry and Focus Groups Ranked by Industry Group RankPipelineScore 1 NGPL 2.20 2 ANR 2.25 3 NNG 2.27 4 PEPL 2.29 Ranked by Focus Group Rank Pipeline Score 1 NGPL 2.13 2 ANR 2.18 3 NNG 2.36 4 PEPL 2.38 Rating Scale: 1 = Excellent, 2 = Good, 3 = Average, 4 = Below Average, 5 = Poor

  17. ANR- Ranked #2 by Focus Group Storage service Reliability of primary interruptible gas transportation Gas pooling and aggregation service Accurate measurement of volumes (5) Use of electronic bulletin boards NGPL - Ranked #1 by Focus Group Access to premier markets Access to diverse supply Storage service Gas pooling and aggregation service Flexibility of scheduling within gas day NNG - Ranked #3 by Focus Group Internet/EBB access to pipeline information Use of electronic bulletin boards Ability to negotiate discounts (8) Access to diverse supply Responsive sales and service personnel (13) PEPL - Ranked #4 by Focus Group Reliability of primary interruptible gas transportation Availability of capacity (11) Internet/EBB access to pipeline information Access to diverse supply Reps communicate clear tariff information What are our Competitors Strengths? The top 5 areas of strength for each competitor was extracted from the Focus group ratings of all 40 attribute questions. They are listed in order of lowest score with the lowest score being the best. The number in ( ) indicates if the attribute is one of the top 15 important attributes.

  18. ANR- Ranked #2 by Focus Group Ability to negotiate discounts (8) Timing from transportation request to execution Transportation pricing is competitive (1) Involvement of senior management in long term strategy Attitude of continuous improvement (9) NGPL - Ranked #1 by Focus Group Accurate and timely invoices Accurate, concise, & understandable contracts Quality/maturity of marketing, sales, and service reps Settlement of imbalances Timely notifications before initiating restrictions (3) NNG - Ranked #3 by Focus Group Simple and straightforward scheduling (12) Gas pooling and aggregation services Accurate measurement of volumes (5) Accuracy in scheduled gas volumes (4) Ability to nominate multiple receipt and delivery points with firm PEPL - Ranked #4 by Focus Group Storage service Gas pooling and aggregation service Trustworthiness of pipeline Timing from transportation request to execution Anticipates your needs What are our Competitors Areas of Improvement? The top 5 areas of improvement for each competitor was extracted from the Focus group ratings of all 40 attribute questions. They are listed in order of the highest score with the highest score being the worst. The number in ( ) indicates if the attribute is one of the top 15 important attributes.

  19. Areas of Focus

  20. Areas of Focus • Short term • Long term

  21. Supporting Data

  22. NNG Focus Group Competitors Top 15 Attributes Plus 2 New Attributes Rating Scale: 1 = Excellent, 2 = Good, 3 = Average, 4 = Below Average, 5 = Poor

  23. NNG Focus Group CompetitorsAll 40 Attributes Rating Scale: 1 = Excellent, 2 = Good, 3 = Average, 4 = Below Average, 5 = Poor

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