Presented at 2013 National Town Meeting on Demand Response & Smart Grid

July 11, 2013

Lupe Jimenez, Sacramento Municipal Utility District

Powering forward. Together.

Smart Pricing Options PilotPilot Overview and Operational Implementation

U.S. Department of Energy Disclaimer

• Acknowledgement: “This material is based upon work supported by the Department of Energy under Award Number OE000214.”

• Disclaimer: “This report was prepared as an account of work sponsored by an agency of the United States Government. Neither the United States Government nor any agency thereof, nor any of their employees, makes any warranty, express or implied, or assumes any legal liability or responsibility for the accuracy, completeness, or usefulness of any information, apparatus, product, or process disclosed, or represents that its use would not infringe privately owned rights. Reference herein to any specific commercial product, process, or service by trade name, trademark, manufacturer, or otherwise does not necessarily constitute or imply its endorsement, recommendation, or favoring by the United States Government or any agency thereof. The views and opinions of authors expressed herein do not necessarily state or reflect those of the United States Government or any agency thereof.”

Page 2

• Overview of Offers

• Key Components

• Marketing Approach

Agenda

Page 3

A little about SMUD

• Sacramento County in Northern California• Municipal Electric Utility

• Governed by a Board of Directors

• 600,000 Customers• 540,000 Residential• 60,000 Commercial

• Summer-Peaking Load (Air Conditioning)• Residential Peak: 4-7pm June-September• Peak load ~3000 MW, of which 400MW = 40 hours

• Energy Mix• Hydro• Natural gas-fired generators• Renewables (solar, wind)• Wholesale market

6/28/20134

Study Objectives

The Plan describes the two-year application of experimental rate options on a sample population of SMUD customers with the intent of determining:

1. Electricity impacts of each of the treatments

2. Customer characteristics associated with behavior

3. The roles of enabling technology in customers’ daily electricity management

4. Program impacts on customer satisfaction

5. Rate and enabling technology program value to utility

6. Expected market penetration for rate and enabling technology programs

7. Effective educational and marketing strategies for customers

6/28/20135

Residential

Opt In

TOU

No IHD

OfferWith IHD

Offer

CPP

With IHD Offer

No IHD

Offer

Default

TOU

With IHD Offer

TOU-CPP

With IHD Offer

CPP

With IHD Offer

Key Features of SPO Pilot

Three Rate Options

Two Recruitment Strategies

Impact of IHDs on Customer AcceptanceTotal enrollment, including deferred groups = 12,027;

Total # of customers receiving offers, including deferred groups = 53,798

Total # of customers in SPO, including controls = 99,661

Page 6

Pilot Development and Support

Technology Projects

PricingSAP IntegrationMeter and HAN Pricing Integration

Customer ServiceCSR Enrollment, Tracking, and Communications IntegrationOnline Enrollment

Data CollectionEnrollment ReportsExportable Data Sets

Enabling TechnologyHAN CommunicationEnergy Cost and Energy Use DisplayEvent Notification

6/28/2013

7

Customer Services Projects

Contact CenterCSR special team

IVR call routing

Toll free number and custom email

Customer SupportOnline hourly usage display

HAN support

Event notification

Enabling TechnologyDefine HAN business requirements

Develop business processes for device support and deployment

BillingAutomated billing

Establish business processes for rate changes and enrollment protocols

Pricing Plans

Standard TOU CPP TOU-CPP$0.00

$0.10

$0.20

$0.30

$0.40

$0.50

$0.60

$0.70

$0.80

$0.10 $0.08 $0.09 $0.07

$0.18 $0.17 $0.17$0.14

$0.27 $0.27

$0.75 $0.75

Off-Peak Base Off-Peak Base Plus On-Peak Critical Peak

Pric

e p

er

kWh

($

)

n/an/a

On-peak from 4 to 7 PM on all non-holiday weekdays from

June through September (~10% of all summer hours)

Critical peak from 4 to 7 PM on up to 12 event days be-tween June & September

(~1% of all summer hours)

Page 8

n/a n/a

Page 9

Customer Touch Points

Summer Peak Campaign

Recruitment Letter and Outreach

Educational Microsites

Online Account Portal Hourly Data

Special Contact Center Team

IHD SupportIn Home DisplayConservation Day Alerts: Text, Call, Email, IHD

Marketing Research (pre, interim, post)

Customized Bill

Customer

Social Media Engagement

Welcome Packets Tips, Recipes, Discount Cards

Customer education started with recruitment and continues throughout the pilot. We want to give our

customers every opportunity to be successful!

Marketing and Communications

RecruitmentPublic Outreach and Education

rate processexternal affairspress releases

Recruitment Preparationstandard summer peak and energy efficiency campaign

Recruitment and Notificationpretest recruitmentawareness marketingdirect marketing via mail, email, door hangers, and phonecontact center advocatesno fuss - easy to enroll, easy to drop

Retention & EducationDirect Education

welcome packet

peak savings tips

Educational Web Pagespilot background

pricing information

educational videos

link to enrollment/drop

links to SMUD tools

Social Mediaupdates

tips

event notification

contests

6/28/2013 10

Market Research

MarketingBest practices

Sample analysis

Image and message testing

Offer and price positioning

Retention & EducationKnowledge gap assessment

Online social media tracking

Click-through analytics

SatisfactionPricing plans

HAN devices

Educational material

Program participation

SMUD satisfaction and brand attributes

Profiling & SegmentingDemographic, property, and appliance data

Marketing channels and frequency analysis

Opt-out/drop out analysis

Pricing study for future implementation

Enrollment, load shed, and satisfaction by customer type

6/28/201311

Page 12

New Questions to Consider

• Customer Support– Customer support for rate options: currently special CSR team– HAN support: internal/external, which business units, what times of the day, to what extent, installation services

• Operational Implementation– Meter reprogramming versus manual interval data extraction and manual bill calculations for mid-cycle moves– Ability to maintain bill presentment and tariff design consistency for special customer groups– Presentation of bill savings and peak consumption– Messaging of events and informational notifications: standards, effectiveness, process– Customer education: what types of education and delivery channels will best promote satisfaction and load reduction

• Program Design– Pricing ratios within the structures

• How would customers respond to greater risk/reward options?• Which customers would participate?• How would it impact bills and load?

– Deploy rates as a standard rate offer at sign up, a program “pricing plan”, or a product bundle with equipment?– Rate calculators: customer benefits and utility drawbacks

• Equipment– HAN certification by SMUD– HAN testing and firmware upgrades– Self-provisioning options for customers– Trouble-shooting and support roles– Internal process development, inventory, deployment, tracking

• Evaluation and Potential Future Research– Impacts on groups not included in study sample– Net value of impact of special customer groups– How to optimize benefits for both utility and customer value

Lupe Jimenez

Sr. Project ManagerSacramento Municipal Utility District(916) 732-5966Lupe.Jimenez@smud.org