resolution template - californiadocs.cpuc.ca.gov/.../g000/m199/k098/199098418.docx · web viewthis...

DRAFT

PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA Agenda ID

16019ENERGY DIVISION RESOLUTION E-4882

November 30, 2017

R E S O L U T I O N

Resolution E-4882. Pacific Gas and Electric Company’s (PG&E) Marketing, Education and Outreach Plan in Compliance with the December 17, 2015 Assigned Commissioner and Administrative Law Judge’s Ruling and Decision 15-07-001 on Residential Default Time of Use Rates.

PROPOSED OUTCOME: Approves, with modifications, PG&E’s TOU

marketing, education and outreach plan for 2017-2019.

SAFETY CONSIDERATIONS: There is no impact on safety.

ESTIMATED COST: The cost of PG&E’s plan is estimated to be $46.7

million over 3 years. This amount will be reviewed on an ongoing basis through annual reports.

By Advice Letter 4949-E, filed on November 1, 2016, and 4949-E-A, filed on March 15, 2017.

__________________________________________________________

SUMMARY

This Resolution approves Pacific Gas and Electric Company’s (PG&E’s) Marketing, Education and Outreach Plan (ME&O Plan) with modifications.

On November 1, 2016, PG&E filed its ME&O Plan in accordance with Decision (D.) 15-07-001 and an Assigned Commissioner and Administrative Law Judge Ruling issued on December 17, 2015

199098418 1

Resolution E-4882 DRAFT November 30, 2017PG&E AL 4949-E/-A/WR1

(December 17 Ruling) in Rulemaking (R.)12-06-013. This advice letter describes PG&E’s time-of-use (TOU) customer engagement strategy for 2017-2019 leading up to the rolling default of up to four million PG&E residential customers1 onto a default TOU rate in 2019.

This plan was created in alignment with the Greenberg Blueprint commissioned by the Marketing Education and Outreach Working Group (Working Group) in R.12-06-013, as well as with Commission direction and Working Group discussion and direction. PG&E requests adoption of the proposed plan and proposed budget expenditures to be collected and tracked through the Residential Rate Reform Memorandum Account (RRRMA) as authorized in D.15-07-001.

PG&E’s ME&O Plan includes three phases:

Phase 1 in 2017 lays the foundation for engagement with customers and deploys a test and learn approach with multiple outreach tactics.2

Phase 2 in 2018 will optimize the outreach based on the lessons from 2017.

Phase 3 in 2019 will continue education and engagement efforts to prepare customers for default rollout.

In its advice letter PG&E provides detail on how they will segment their customers and the tactics they will employ to reach those specific customers. A timeline which shows when each tactic will be deployed and a set of customer profiles showing when customers will be receiving specific messages were also provided.

D.15-07-001 emphasized the importance of including a plan for measurement based on metrics. The ME&O Plan includes a plan for measurement based on the metrics agreed upon by the Working Group and validated by the consultant hired by the Working Group. It 1Advice Letter 4949-E, p.12 PG&E has completed several of the tasks associated with 2017 outreach, including bill comparison ‘test and learns’ and customer research in consultation with the Commission and Working Group. These costs have been tracked in the RRRMA and in PG&E’s quarterly rate reform reports. This advice letter requires PG&E to advise the Working Group of changes to the instant budget of greater than $250,000.

2


also contains a budget estimate of $46.7 million dollars for all the activities described.

BACKGROUND

Decision 15-07-001 directed the three investor-owned utilities (PG&E, Southern California Edison Company (SCE) and San Diego Gas & Electric Company (SDG&E), collectively the IOUs) to begin the process of defaulting residential customers to TOU rates in 2019 and to undertake a series of opt-in TOU pilots in 2016 and default TOU pilots in 2018. In D.15-07-001, the Commission discussed the importance of providing adequate marketing, education and outreach to customers and directed the IOUs to work with other parties to create a working group3 to examine ME&O for the transition to default TOU rates as well as for the changes to the tiered rate structure, for revisions to the minimum bill and bill comparison tools.4 D.15-07-001 asked the Working Group to consider long term outreach to customers and to develop specific strategies to increase customer awareness and understanding of their rates, the changes to the tiered rate structure, and the transition to default TOU rates.

In late 2015 and early 2016 the Working Group met and created a set of draft metrics for ME&O activities and designed a baseline ME&O study to ascertain awareness and understanding of rates among ratepayers.5

3 The Marketing Education and Outreach Working Group (ME&O WG or Working Group) in the Residential Rate Reform Proceeding includes active members from the CPUC’s Energy Division and Business and Community Outreach, each of the three IOUs, the Office of Ratepayer Advocates (ORA), the Consumer Federation of California (CFC), the Center for Accessible Technology (CforAT), the City of Lancaster, the Environmental Defense Fund (EDF), the Greenlining Institute, Marin Clean Energy (MCE), Oracle (formerly Opower), Siemens, Tesla (formerly SolarCity) and the Utility Consumers’ Action Network (UCAN). The Working Group is, and continues to be, open to all interested participants.4 D.15-07-001, p.255-2635 The IOUs contracted with Hiner & Partners to conduct a telephone survey among a representative sample of residential customers in each service territory on their knowledge of basic rate concepts and time-of-use rates. This survey was run for PG&E in March 2016 and April 2017.

3


PG&E's initial baseline study found that 49% of PG&E's residential customers were not sure which rate plan they were on. 11% of surveyed residential customers thought they were on a TOU rate, but only 4% of residential customers are actually enrolled on TOU rates. 55% of customers said they had heard of TOU rates, but 62% of customers were unaware that they even had rate choices.6

On December 17, 2015, the Assigned Commissioner and Administrative Law Judge (ALJ) issued a ruling (December 17 Ruling) which described the Commission’s desire for greater integration of marketing activities between rate reform, demand-side management (DSM) and other IOU programs, as well as a more systematic approach to planning for default TOU ME&O. This ruling directed the IOUs to hire an expert consultant to advise the Working Group on appropriate ME&O metrics, goals, and strategies to meet those goals, including a plan for statewide ME&O program coordination. The ruling also directed the IOUs to prepare a comprehensive ME&O plan by September 1, 2016.7 This plan was required to include:

Specific timelines for rate-reform related ME&O activities; Budgets for such activities; Descriptions of segmented ME&O for certain customer

groups; Surveying methodologies and questions to evaluate the

metrics; Coordination between the IOU’s’ ME&O activities and the

statewide ME&O program (Energy Upgrade California or EUC), including how messaging content, campaigns and communication plans will be aligned. 8

A Request for Proposal process was conducted during the first quarter of 2016 and the Working Group selected Greenberg, Inc. (Greenberg) as the ME&O consultant.9 Through their research, Greenberg 6 A copy of the baseline survey results is attached to AL 4949-E7 This was extended to November 1, 2016 by ALJ Ruling on May 26, 2016.8 Assigned Commissioner and Administrative Law Judge's Ruling Requiring Utilities to Prepare Comprehensive Marketing, Education and Outreach, Metrics, Goals and Strategies for Residential Rate Reform, December 17, 2015, p. 7.9 Greenberg Inc. is a communication research and strategy firm located in Emeryville, CA. The project included Greenberg staff and a number of

4


confirmed the findings of the baseline study that customers are unengaged with energy. A set of focus groups and in-depth-interviews with customers in the three IOU-territories found that customers did not connect their personal actions with demand on the electric grid and overall did not adequately understand how they were billed for energy.10 To overcome this, Greenberg recommends that the ME&O Plan must include steps to engage customers on an emotional level as well as an intellectual level in order to affect change in behavior.

After significant consultation with Working Group members, Commission and IOU staff, Greenberg delivered the Rate Reform ME&O Blueprint (Blueprint), on August 20, 2016.11 The Blueprint included a strategic action plan for statewide and local utility marketing as well as a proposed vision, proposed metrics, and proposed timeline and budgets for 2017 through 2019.

The Blueprint is a comprehensive document which includes many elements. Chief among these:

Greenberg provided an impact-based segmentation strategy which emphasized spending the most time and money on customers who would be the most negatively impacted by default TOU rates, then applying psychographics to those segments to further refine the message.

A go-to market plan which increases the amount of messaging closer to default on a 90/60/30 day timeline.

A strategy based on emotional quotient (EQ) and intellectual quotient (IQ) where a general, EQ focused statewide message would provide a reason for customers to care while the IOUs would provide a more IQ focused message( i.e. details on rate plans, rate comparisons, tips on how to adapt and conserve).

subcontracted subject matter experts in advertising and program evaluation.10 Greenberg Blueprint, Appendix G.3.11 ALJ McKinney issued a Ruling on October 7, 2016 adding Greenberg’s Marketing, Education & Outreach Blueprint v.2 into the record of Rulemaking (R.) 12-06-013 for reference purposes. A copy of the Blueprint can be found at: http://www.cpuc.ca.gov/WorkArea/DownloadAsset.aspx?id=6442451678.

5

http://www.cpuc.ca.gov/WorkArea/DownloadAsset.aspx?id=6442451678

http://www.cpuc.ca.gov/WorkArea/DownloadAsset.aspx?id=6442451678


A mass media strategy which aimed to reach all Californians 13 and older.

A measurement strategy with metrics and proposed studies.

On September 12, 2016, a workshop was held by the Commission to discuss how best to incorporate the Greenberg Blueprint into the utility plans. Participants were asked to place things in several categories:

1. things that seem reasonable and should inform the IOU plans,2. things that are necessary to the plans but not included in the

Blueprint,3. things that can be done by Commission action outside this

proceeding,4. things that cannot be included in the plans,5. and things that raise concerns.12

Parties expressed skepticism on some portions of the Blueprint at the workshop, including the budgets proposed by Greenberg. Other parts of the Blueprint, such as establishing formal alignment and management processes between ME&O in different proceedings and programs, were considered internally by Commission staff. Agreement was reached on the strategic foundation, segmentation and measurement strategies described in the Blueprint. This resulted in a common outline that was provided to the IOUs by ALJ ruling on September 30, 2016 (September 30 Ruling).13

On November 1, 2016, PG&E, SCE, and SDG&E submitted advice letters setting forth their respective ME&O plans detailing their strategy, tactics and timeline for customer engagement in accordance with the December 17 Ruling and Blueprint.14 In response to direction provided by ALJ McKinney at the February 6, 2017 prehearing conference, the IOUs submitted

12 ALJ Ruling, August 29, 201613 Administrative Law Judge’s Ruling inviting prehearing conference statements and setting next steps following the September 12, 2016 Marketing, Education & Outreach Workshop, September 30, 2016 (September 30 Ruling)14 PG&E Advice Letter (AL) 4949-E; SCE AL 3500-E; SDG&E 2992-E.

6


supplements to their ME&O plans on March 15, 2017.15 These supplements included additional information on the IOUs’ public relations plans, segmentation strategies and budgets, as well as detailed profiles of how customers would be contacted over the default period.

PG&E’s ME&O Plan includes three phases:

Phase 1 in 2017 lays the foundation for engagement with customers and deploys a test and learn approach with multiple outreach tactics.

Phase 2 in 2018 will optimize the outreach based on the lessons from 2017.

Phase 3 in 2019 will continue education and engagement efforts to prepare customers for default rollout.

In the market and situation overview section required by the September 30 Ruling, PG&E cites its own research showing that its customers have a low engagement with energy and that they view their relationship with energy and the utility as transactional in nature. They also provide an overview of their customers’ media consumption habits by segment.

In its advice letter PG&E provides detail on how they will segment their customers, and the tactics they will employ and channels they will use to reach those specific customers. This includes a 2017-2018 opt-in TOU campaign that will seek to enroll customers who will benefit the most on TOU. A timeline which shows when each tactic will be deployed and a set of customer profiles showing when and how customers will be receiving specific messages were also provided.16

The PG&E ME&O Plan includes a plan for measurement of education and engagement based on the metrics agreed upon by the Working Group and validated by Greenberg. The ME&O Plan also contains a budget estimate of $46.7 million dollars total for all the activities described in the plan. This plan may be supplemented in the future based on input from the Working Group.

15 PG&E AL 4949-E-A; SCE AL 3500-E-A; SDG&E 2992-E-A.16 PG&E 4949-E-A, Attachments 1 and 2

7


NOTICE

Notice of AL 4949-E and 4949-E-A was made by publication in the Commission’s Daily Calendar. PG&E states that a copy of the Advice Letter was mailed and distributed in accordance with Section 4 of General Order 96-B.

PROTESTS

Advice Letter AL 4949-E was protested.

PG&E’s Advice Letter AL 4949-E was timely protested by the Office of Ratepayer Advocates (ORA), the Utility Reform Network (TURN) and the Center for Accessible for Technology (CforAT) with the Greenlining Institute on December 6, 2016.

ORAIn its protest, ORA asks that PG&E provide budgets with more granular detail. ORA acknowledges that the budgets included are high level estimates, but believes more detailed information could serve as a baseline by which to evaluate future changes to the budget. They support PG&E’s plans to leverage budgets from other proceedings to co-fund integrated outreach efforts. They also suggest that PG&E be required to include any internal and external audits17 of the RROIR Memorandum Account (RRRMA) in future Progress on Residential Rate Reform (PRRR) Quarterly Reports. Lastly, they ask that PG&E provide additional analysis on metrics tracking and goals.

CforAT / Greenlining InstituteCforAT and the Greenlining Institute ask for the development of consistent and effective ME&O plans and budgets through coordination between the various programs that are involved in demand-side management messaging, including the California Alternate Rates for Energy (CARE) / Energy Savings Assistance Progam (ESAP) proceeding (A.14-11-007) and the Statewide ME&O proceeding (A.12-08-007). They believe that rather than continuing 17 ORA is a party to PG&E’s 2017 GRC Phase 1 settlement agreement which approves cost recovery for the period 2017-2019 through the RRRMA. The agreement provides that ORA may audit the RRRMA. See Settlement Agreement in A.15-01-001, p 1-8.

8


with two overlapping plans, the ME&O effort in the Rate Reform proceeding should coordinate and potentially consolidate with the Statewide ME&O effort and its associated brand, Energy Upgrade California (EUC). They agree with PG&E that expert assistance should be engaged to help with these efforts.

While CforAT and the Greenlining Institute agree that comprehensive ME&O is necessary, they point out the many unknowns in the default TOU process, such as whether the transition will be big bang or rolling18, the categories of customer that might be excluded from default19, the actual default rates and the results of the pilots, could hinder a coordinated ME&O process. They ask that the Commission defer the expansive plans submitted by PG&E until after the integration with the Statewide ME&O effort, and only authorize the more targeted areas of the plan such as the opt-in TOU and high usage surcharge campaigns.

TURNIn their protest, TURN contends that the Commission should reject PG&E’s plan and require them to re-file a more modest plan for 2017 and wait for any further expenditures until after the default TOU rate is known. In lieu of that, TURN asks that the $10.5 million budgeted for the ‘overall plan’ in 2017 be reduced as the ‘overall plan’ as described is designed to provide the same general messaging and education that is performed by existing budgets and programs. TURN believes that most of the plan as described will reiterate current behavioral messaging on energy efficiency and is not additive. TURN reiterates many of the unknowns in the default TOU process as described by CforAT/Greenlining above and asserts that the lack of details surrounding default TOU make ME&O planning premature and that the Commission should instead rely on statewide education efforts in A.12-08-007 through at least 2017.

Lastly, TURN describes the current outreach and educational messages for residential rate reform and suggests that TOU 18 Since these comments were originally submitted, the January 23 2017 Scoping Memo confirmed the transition to TOU will be a rolling default.19 Assembly Bill 327 (Perea) which authorized the Commission to set default TOU rates also required that certain customers be exempted from default, including medical baseline customers. The Commission is currently in the process of determining if there will be additional exemptions.

9


messaging could confuse and dilute the messages on things like Tier 1 and Tier 2 outreach on tier collapse, the minimum bill, the super-user electric (SUE) surcharge, and pilot communications.

PG&E’s Response to ProtestsPG&E responded to the protests on December 30, 2016. PG&E agreed with ORA and as a result will provide supplemental analysis on metrics through the Working Group and more details on marketing dollars leveraged from other programs. PG&E also agreed that any audits of the RRRMA will be reported in the quarterly PRRRs. ORA and PG&E were unable to agree on the level of budget detail to be provided in the plans. PG&E states that they offered to provide detailed reporting on the 12 categories of their original budget in their PRRR filings but that ORA did not agree to this.

PG&E’s response to TURN states that delaying approval and implementation of PG&E’s ME&O plan until completion of the pilots in 2018 would significantly hinder the transition to default TOU. PG&E asserts that TURN’s requests are contrary to the December 17 Ruling and contrary to the phased approach necessary to lay the foundation for communicating with customers about default TOU.

PG&E agreed with CforAT and the Greenlining Institute on the need for more coordination between the Statewide ME&O proceeding and Rate Reform. However, they did not agree on the request that the Commission delay approval of the comprehensive plan and rely on Statewide ME&O in the near-term.

DISCUSSION

The Commission has reviewed Advice Letter 4949-E for consistency with the ME&O directives in D.15-07-001, the December 17 Ruling, the September 30 Ruling and the supplemental information requested by ALJ McKinney at the February 6, 2017 pre-hearing conference. Specifically, our review checked for the inclusion of the elements required by the D.15-07-001 and the December 17 Ruling, and for a discussion of how the plans compare to the Blueprint provided by Greenberg.

10


The December 17 Ruling asked the IOUs and consultant to create a report with specific aspects. While the report created by Greenberg is our reference point, our guidance here is informed by the total process, including but not limited to: Working Group meetings and discussion, the September 12, 2016 workshop, D.15-07-001 and other documents. We also asked the IOUs to follow an outline as laid out in the September 30 Ruling.

Specific timelines for rate reform related activitiesThe December 17 Ruling asked that the ME&O plans include specific timelines for planned rate reform activities. PG&E provided this in the form of a timeline with all of their planned rate reform activities between 2017 and 2019 (see Appendix B of AL 4949-E). PG&E will pursue rate reform and high usage surcharge related outreach throughout the three year period from 2017-2019. PG&E proposes to conduct its opt-in TOU acquisition campaign in 2017 and 2018.

For default TOU, the Commission has not yet approved a start date for default TOU transition. The precise date in 2019 will be proposed by the IOUs in their January 1, 2018 rate design window applications as ordered by D.15-07-001. However, PG&E proposes to send initial notices to customers between 120 days and 60 days before default, with interim follow ups at 90 and 30 days. This is in line with the strategy PG&E employed with its Small and Medium Business (SMB) TOU rollout and was suggested in the Blueprint.

At the February 6, 2017 prehearing conference, ALJ McKinney requested detailed customer profiles which would show examples of the various communications customers would receive from PG&E over the three years of the Plan.20 In their supplement to AL 4949-E, PG&E provided examples of "Joe" and "Callie," hypothetical customers who live in different areas of the state, and have different demographic backgrounds, usage behaviors and preferences on interaction with PG&E. The timelines provided show examples of the different touches and campaigns that "Joe" and "Callie" would see based on their different characteristics. We find these very useful and informative as we turn our attention to the other IOUs marketing plan letters. These should be updated and provided to the Working Group on a regular basis.

20 AL 4949-E-A, Attachment 2

11


We approve PG&E's proposed timelines.

BudgetThe budget Greenberg created for marketing activities made a number of assumptions:

o A "big bang" default of all eligible customers at the same time (January 2019);

o A "reach"21 of 85-90% and a 'frequency'22 of 10+ over an average of four weeks;

o A cost of $13 per customer for direct marketing materials23;o A heavy emphasis on continuous mass media at the statewide and

local levels.

These assumptions, particularly the high reach and frequency numbers, are intended to make energy a more salient topic to all Californians. Looking at the Blueprint, the estimated cost for PG&E alone, not including any contribution to a statewide campaign, comes to roughly $95.2 million dollars. PG&E’s proposed budget is considerably lower than the budget recommended in the Blueprint.

2017 2018 2019 TotalMass MediaBlueprint for PG&E

$0 $13,222,875

$23,564,300

$36,787,175

PG&E $3,212,000

$4,315,000

$6,450,000

$13,977,000

21 Reach is defined as the percent of people (unduplicated) within the target audience that are estimated to be reached by the advertising, during an average 4-week time period (4-week is the standard measure for the calculation).22 Frequency is defined as the number of times that the targeted number of customers is exposed to the message or ‘touched.’ For example, PG&E’s new goal during the campaign time period is to reach 75% of PG&E’s target audience an average of 4-5 times during a 4-week period.) 23 Greenberg arrived at this number by creating an estimate in between the $4/customer used for the Sacramento Municipal Utility District (SMUD) default TOU pilot, the $9.50/customer used for PG&E’s own Small/Medium Business TOU default and Greenberg’s professional opinion of $25/customer.

12


Direct MarketingBlueprint for PG&E

$5,900,000

$36,000,000

$18,000,000

$59,900,000

PG&E $1,408,500

$3,128,080

$6,501,580

$11,038,160

Public RelationsBlueprint for PG&E

$27,000 $54,000 $54,000 $135,000

PG&E $360,000

$485,000 $510,000 $1,355,000

Research and EvaluationBlueprint for PG&E

$217,000

$201,750 $201,750 $620,500

PG&E $710,000

$776,000 $782,000 $2,268,000

PG&E's rationale for reduction compared to Blueprint budgetPG&E’s plan would reduce the estimated budget from the budget recommended by the Greenberg Blueprint. PG&E's estimated costs, provided in AL 4949-E-A, are $46.7 million dollars or half the estimated cost of the Greenberg budget.24 It also contains some direct marketing funds which will be leveraged from other budgets, such as CARE/ESA and residential energy efficiency when the products are co-marketed. PG&E decided to reduce the amount of paid media based on its own research and to leverage other ME&O budgets for direct marketing costs.

Direct MarketingPG&E believes that it will be more cost effective to rely less on paid media as the Blueprint suggested and instead use a more direct-to-customer approach similar to what was used in PG&E’s transition for small and medium business customers to TOU rates.25 This approach

24 This comes to roughly $10.34 a customer if all 4.4 million residential customers are included.

13


includes direct mail, direct email, 'telephone town halls,'26 digital media and community based outreach in addition to the new rate welcome kits, default announcement letters and rate comparisons necessary for default.

Media and Public RelationsPG&E increased the budget for media and public relations from the Greenberg recommendation to a total of $1.3 million over three years. They argue that the Blueprint undervalues media relations and that media and public relations are a more cost effective use of dollars than mass media. The media relations strategy includes fact sheets and briefing materials, an aggressive media outreach campaign about rate options, op-eds and partnerships with in-language media organizations. We agree with PG&E’s assessment on the need for improved media and public relations, as well as the cost-effectiveness of this particular channel, and therefore support deviating from the proposed Greenberg budget to augment investment in this critical area.

Mass MediaPG&E believes that "continuous paid media direction at either the statewide or local level is a high cost and inefficient approach."27 Also, the PG&E default will be rolling over a number of months and not all at once, which requires modifications to the Greenberg budget. PG&E is instead recommending a 75% reach and a frequency of 5+ over four weeks to better manage costs, and, they believe, to avoid message fatigue for customers. However, they may reach the Blueprint goal of 85-90% reach and a frequency of 10+ during certain events or seasons when they believe customers are most motivated to learn and engage. PG&E believes that other elements of their plan such as direct marketing and public relations can shoulder a portion of the goal as well. Lastly, PG&E increases the share of digital and social channels and reduces the Greenberg recommended share of print, which is more expensive than digital channels and skews

25 D.10-02-032 ordered PG&E to transition its small and medium business customers to mandatory TOU rates and default critical peak pricing.26 Town halls provide access for customers to a live discussion and educational session. Town halls can be deployed in multiple languages.27 AL 4949-E, p.50

14


heavily to ages 65+. As noted above, we agree with PG&E’s changes to the Greenberg Blueprint recommendations on mass media.

15


Measurement and EvaluationIn addition to the measurement and evaluation studies recommended in the Blueprint, PG&E intends to undertake additional customer research related to rate comparisons and opt-in TOU customer acquisition. These studies increase the cost of this category to $2.3 million. Because there is little existing data on customer response to TOU, and because we agree that evaluating the effectiveness of ME&O is critical to the long-term ability of the Commission and the utilities to improve customer engagement and understanding of their electricity use, this budget is approved.

PG&E's method of integrating budgets from other programsAs described in the December 17 Ruling, the utilities were asked to "coordinat[e] or co-market[] with other rate-related ME&O programs"28 and the September 30 Ruling asks that the IOUs "provide ideas for leveraging current ME&O budgets through co-marketing or potential synergies that can lower costs.”29 The December 17 Ruling also noted that existing authorized budgets for rates and energy efficiency marketing are significantly underspent.30 It is a priority of the Commission to use the various budgets that have been allocated for different ME&O activities which target residential customers in an effective manner. In its supplement, PG&E describes its steps for identifying budget allocations for integrating outreach.31 First, PG&E considers what programs can be effectively integrated. Next, PG&E creates co-funded purchase orders and distributes the costs based on the primary and secondary messaging. Primary and secondary are determined by which action customers are most likely to take from the piece of messaging. PG&E will also provide information on its integrated marketing activities and which balancing accounts and budgets are being leveraged in its PRRR reports. We believe this is a good model and that the other utilities should consider following PG&E's example.

28 December 17 Ruling, p.929 September 30 Ruling, p.330 December 17 Ruling, p.631 AL 4949-E-A, p.6

16


MiscellaneousOther major budget items include a budget of $6.1 million over three years for contact centers based on assumptions of increased call volume close to default rollout, $1.1 million in support for community based organizations and events, $670,000 for marketing automation efforts and $7.8 million for labor. PG&E also lists their $1.8 million budget for 'super user' surcharge outreach, however, this budget was already described and approved for recording in a previous advice letter.32

Budgets are subject to changesPG&E rightly asserts that this scale of rate transition has not been done before and accordingly, requires communications of a type that PG&E has never done before. A good deal of PG&E's efforts include test-and-learn strategies and there are ongoing efforts such as the default TOU pilots and creation of a statewide marketing campaign which may necessitate changes to its plans and associated budgets. The measurement and evaluation strategies described by PG&E will also act as a guide to continuous adjustment to the plans based on results. We understand that the budgets included here are not set in stone and cannot be expected to be precise. However, we also believe that any results from test and learn strategies must be communicated to the Working Group and described in PRRRs so that others can learn and benefit from PG&E’s research as well.

For example, in their supplemental advice letter, PG&E was asked to provide greater budget detail, with additional line items. In the process of providing a more detailed budget, PG&E was able to cut roughly $2.2 million dollars from the 2017 budget. However, no further explanation was provided. It makes sense that estimates for some of these budgets may have changed from November 2016 to March 2017 but some insight as to how or why they changed would be valuable to the Working Group and the other IOUs, to both assist in reasonableness review and as a potential example for the other IOUs to follow.

For that reason we ask that the ME&O Working Group be notified of any deviations from the budget included in this advice letter of greater than $250,000 and that the rationale be described in the next applicable PRRR report where PG&E describes its actual costs. We 32 AL 4722-E/-A/-B

17


also require future budget adjustments to be accompanied by information such as changes to the cost per customer (for direct marketing) and cost per touch or number of impressions (for mass media) for easy comparison by Working Group members.

We approve PG&E's proposed budget expenditures to be entered in the RRRMA.

Measurement and Evaluation plan

Working Group Metrics and Tracking vs. Goal MetricsIn November 2015, the Working Group met to establish metrics and design a baseline survey to measure current values for those metrics. The group chose among a group of proposed metrics from Energy Division, the IOUs and ORA to create a single list of draft metrics. Please see below. Metric #

Metric Goal vs. Tracking

1 Customers are aware that there are rate plans that may help them mitigate electricity expenditures

Goal

2 Customers know where to go to get more information about how to manage their energy use

Goal

3 Customers understand how energy use can impact bills Goal4 Customers understand the benefits of lowering their

energy useGoal

5 Customers are aware of the rebates, energy efficiency programs, and tips offered by their utility that can help them manage their energy bill

Goal

6 Customers feel they were provided useful info explaining their bills

Goal

7 Customers were provided with information explaining their bill

Tracking

8 Customers were provided with information and services to help reduce their energy bill

Tracking

9 % of CARE/FERA/Non-CARE customers on arrearage remains stable based on the average of last five years (2010 – 2014)

Goal

10 % of CARE/FERA/Non-CARE customers experience Goal

18


service disconnection remains stable based on the average of last five years (2010 – 2014)

11 Customers are provided with information and service to be able to avert service disconnection

Tracking

12 Number of rate reform-related escalated customer complaints

Tracking

13 Number of community partners utilized to support Rate Education outreach and education and number of people reached

Tracking

14 Number of events and presentations held in support of Rate Education outreach and education and number of people reached

Tracking

15 Percent of customers provided a personalized pricing plan comparison report

Tracking

16 Open rates and click-thru rates for Rate Education-related emails

Tracking

17 Number of views to Rate Education web pages Tracking

18 Number of customers who have changed rates over the last quarter

Tracking

19 Percent of customers on opt-in TOU rates Tracking20 % of customers using bill comparison tools Tracking

ORA Suggested MetricsMetric #


21 Proportion of customers that are aware of the rate changes and potential impacts on their bills

Goal

22 Website activity: Length of time, # of pages visited, unique visitors, referrals to outside sites such as Energy Upgrade CA

Tracking

23 Digest of featured stories in news and social media regarding rate reform

Tracking

One of the key distinctions made was the difference between 'tracking' and 'goal' metrics. Tracking metrics are key indicators of outreach activities and customer actions. They measure tactical decisions and responses to those decisions. Goal metrics are those that assess changes in 'year over year' customer understanding described in the December 17 Ruling. PG&E launched the baseline survey based on these metrics in Q1 of 2016.33

33 This survey was launched simultaneously in all three IOU territories. Results from this baseline survey can be found in PG&E’s PRRR reports. http://www.cpuc.ca.gov/General.aspx?id=12154

19

http://www.cpuc.ca.gov/General.aspx?id=12154


20


Metrics from BlueprintGreenberg reviewed the set of draft metrics against the strategic goals that they set in the Blueprint and chose which should be retained and which should be discarded. Of the draft Working Group metrics, Greenberg proposed to retain five of the goal metrics and two of the tracking metrics. These metrics measure the work of the IOUs in educating customers on the specifics of the new rates.

Metric #


1 Customers are aware that there are rate plans that may help them mitigate energy expenditures

Goal

2 Customers know where to get more information about how to manage their electricity use

Goal

3 Customers understand how energy use can impact their bills

Goal

4 Customers understand the benefits of lowering their electricity use

Goal

5 Customers are aware of rebates, energy efficiency programs and tips that are offered by the utility that can help them manage their electricity bill

Goal

6 Customers were provided with information and services to help reduce their energy bill

Tracking

7 Percentage of customers on opt-in TOU rates Tracking

In their advice letter, PG&E largely retains these metrics but re-adds the percentage of customers who feel they were provided useful information explaining their bills (#6 below), a metric rejected by Greenberg, and adds metrics related to providing a positive customer experience (#7-10). They also remove the tracking metric of percentage of customers on non-pilot opt-in TOU rates. We agree with PG&E’s version of the metrics, especially the addition of a goal for positive customer experience, but will retain the tracking metric of % of customers on opt-in TOU rates to track the overall impact of the opt-in TOU campaign that PG&E has proposed, as it is a metric specifically required by the December 17 Ruling.

21


Approved PG&E Goal metricsMetric #


1 Customers are aware that there are rate plans that may help them mitigate energy expenditures

Goal

2 Customers know where to get more information about how to manage their electricity use

Goal

3 Customers understand how energy use can impact their bills

Goal

4 Customers understand the benefits of lowering their electricity use

Goal

5 Customers are aware of rebates, energy efficiency programs and tips that are offered by the utility that can help them manage their electricity bill

Goal

6 Customers feel they were provided useful information explaining their bills

Goal

7 Customers are aware of time-of-use rates Goal8 Customers are aware of rate choices Goal9 Customers have an optimal experience Goal10 Customers were provided with information and

services to help reduce their energy billTracking

11 % of customers on opt-in TOU rates Tracking

Vision metricsGreenberg's addition to the draft metrics agreed to by the Working Group was a set of three high level 'vision metrics' followed by a set of detailed 'market movement' metrics drawn from the draft 'goal' metrics. The proposed vision metrics include:

1. a percentage of Californians feeling more personally connected and aware of their energy use,

2. a percentage of Californians34 remaining on TOU 15 months after default,35and

3. a percentage of Californians sustaining at least one peak load reduction action 12 months after default.

34 Assembly Bill 327 (Perea) which authorized the Commission to set default TOU rates also required that certain customers be exempted from default, including medical baseline customers. The Commission is currently in the process of determining if there will be additional exemptions.35 15 months refers to the end of ‘bill protection’ which is required for 12 months for customers defaulted to TOU by AB 327.

22


The first metric was assigned as a goal for a statewide campaign, the second to the IOUs and the third to both the statewide campaign and IOUs. See Attachment 1, table 1. Greenberg also added a set of program tracking metrics similar to the 'tracking' metrics set by the Working Group.

September 12 WorkshopOn September 12, 2016, parties met to discuss the Blueprint and how it should be incorporated into the IOUs' plans. A major topic of discussion was the 'vision metric' for TOU retention. Parties were unsure what the specific measure of success should be for the campaign, whether it should be the retention of customers on the TOU rate, the level of customer understanding and acceptance of their rates or load shifting and behavior change.36 With regard to the topic of goal clarity, the IOUs and several intervenor groups recommended that customer satisfaction and awareness of rate choices be the primary focus of any ME&O campaign but acknowledged that Commission guidance would be necessary.37

"Retention on TOU" vs "right rate"In its advice letter, PG&E addresses the two 'vision metrics' assigned to the IOUs (one and three). The high-level vision metrics in the Blueprint included an overarching vision goal of "X percent of non-exempt Californians stay on the TOU rate 15 months after default/3 months after the end of bill protection.” PG&E asserts that it is not currently possible to set a goal for retention because the Default TOU pilot38 is not yet complete. They also express a preference for rate satisfaction and awareness of rate choices (whether the customer feels they are on the right rate for them) as a more appropriate metric and accordingly have introduced 'positive customer experience' as a goal construct for their future surveys.

D.15-07-001 did not provide specific metrics for measuring the success of the IOUs’ default TOU rates, but did provide guidance on

36 September 12, 2016 Workshop in R. 12-06-013, Reporter’s Transcript (RT) page 3 lines 10-19.37 September 12, 2016 Workshop in R. 12-06-013, RT page 18, lines 3-28.38 The Default TOU pilot, authorized by D.15-07-001 will begin in March 2018.

23


the Commission’s view of a successful transition to default TOU. One of the goals of default TOU for the Commission is to manage residential demand at high cost hours by having customers respond to price signals. For that purpose, it is critical to maintain a high percentage of customers on some time-of-use rate, for those on TOU to sustain peak load reduction actions and for them to have a positive experience with time-of-use rates. However, it is also a priority of the Commission to provide customers with options and education so they can understand and choose which rate best suits their usage and lifestyle.39 This allows customers to be on a tiered rate if they cannot respond to TOU pricing or to be on a more complex or real time rate if the customer has the right in-home technology.

Therefore, we agree that customers feeling they are on the ‘right rate’ for them is an appropriate goal. This formulation of success highlights the need to consider both the attributes of the customer and the attributes of the rate. A more detailed description of the 'right rate' is set forth below. Objective: To get the right customers on the right rate so that load shift is maximized, system costs are reduced and customers have the opportunity to save money by reducing electricity usage at appropriate times. Customers who cannot shift load without significant adverse impacts, or who should not shift load due to unique health reasons, should be aware of the tiered-rate option. Example Scenarios for Right Customer/Right Rate:

1. Customers who can respond to complex TOU rates are on complex opt-in TOU rates.

2. Customers who can handle moderate load shift are on default TOU.

3. Customers who cannot shift load without suffering significant adverse impacts, or who should not shift load due to exceptional health reasons, should understand whether they would benefit from exercising their option to be on a tiered rate.

39 “For a default TOU rate to be successful, the design should be based on empirical evidence that supports both measurable benefits of TOU on the grid, and the acceptance and understanding of TOU rates by the residential customer.” D.15-07-001, p. 130.

24


4. Customers who can respond to event-based overlay rates (such as CPP and matinee rates) are enrolled on these rates.

A chart from the Blueprint showing the three ‘vision metrics’ with supporting sub-metrics is reproduced in the attachment. Appendix 1, Table 2 is an update of this table showing the change made herein. We do not agree that it is impossible to set targets for retention since retention will not be measured until 15 months after the beginning of full default. Data from SMUD and other programs can provide an initial target for retention on TOU rates which can be finalized as data from the default TOU pilot becomes available and after a decision is made on what, if any, customers will be excluded from default TOU. Data from SMUD and other programs can provide an initial target for retention on TOU rates which can be finalized as data from the default TOU pilot becomes available.40 However, we agree that retention on TOU rates should not be the paramount goal and should instead be a single component. This chart shows the overall goal of market movement for default TOU.

Evaluation calendar and measurement planPG&E’s measurement plan includes adjustments to the current baseline ME&O survey to accommodate the new metrics and to include online surveying to supplement phone surveys. PG&E proposes to run the survey twice a year until 2018, and then three times a year. This is in contrast to Greenberg’s suggested quarterly surveys beginning in late 2018. PG&E does not include any plans for ‘pulse’ surveys as recommended by Greenberg to monitor the actual default through quick real-time feedback, but will consider the need for real time feedback after the results of the Default Pilot are released.

PG&E proposes to perform segment specific outreach and surveys to better understand responses from various groups (including low-income, hard to reach, benefiter vs. non-benefiter and psychographic groups). They indicate this will be possible through the general baseline survey, from oversampling smaller segments in the general baseline survey and through ad-hoc studies. They also propose to track operations and outreach by Community Based Organizations (CBO) partners based on three ideal outcomes:40 Greenberg Inc. did a survey of nearly all existing defaults and TOU pilots to provide benchmark numbers, Blueprint, page 349.

25


1. Increased awareness of rate options;2. Increased outreach on low-income assistance programs;

and3. Increased outreach through workshops events and door to

door campaigns.

These surveys and tracking data, along with several other studies proposed by PG&E on opt-in TOU customer acquisition and the impact of rate comparisons, may overwhelm those who are tasked with reviewing it. Therefore, we order PG&E (with assistance from the other IOUs) to implement Greenberg’s suggestion of a data visualization dashboard or tool containing metrics and tracking data for Working Group members or other parties to access, to be updated quarterly on schedule with the PRRRs. PG&E’s evaluation plan is approved on the condition that pulse surveys are done in the first wave of any rolling default. These surveys are of increased value when the learnings can be leveraged, in this case, on the multiple opportunities to default customers in a rolling default.

TargetsThe December 17 Ruling charged the Working Group and eventual consultant with creating specific goals/targets for the metrics in the final Blueprint report. Greenberg declined to set specific targets, but provided background research on how to set ‘benchmarks’ while suggesting that additional research was required to establish baselines for some metrics. However, there was no research that indicated any benchmarks for a ‘right rate’ measurement.41

With the additional research being conducted and data from the Opt-In TOU pilots being released, we believe it is appropriate for the Working Group to begin the process of setting targets to measure year over year improvement. PG&E, in consultation with the Working Group shall submit targets for the 11 goal metrics approved above by Tier 2 Advice Letter by no later than February of 2018.

41 Greenberg Blueprint, p. 354.

26


Descriptions of segmented ME&O Overall campaignPG&E has been engaged in a campaign to raise awareness of rates and rate choices among its entire customer base, focusing on high usage customers likely to be subject to the Super-User Electric Charge (SUE). PG&E has also been focused on providing low cost tools and tips to reduce energy usage to low-usage Tier 1 and former Tier 2 customers, as directed in D.15-07-001.

These efforts are a part of PG&E’s Tools and Tips Engagement Campaign, which pushes content through multiple channels, but primarily through digital and email. This is a high-volume impression campaign that aims for 30-36 million impressions in a four-week period. This campaign targets all customers but is customized by demographic, psychographic and language characteristics. PG&E will also be deploying seasonal campaigns around its high bill winter and summer months. These seasonal campaigns will be delivered through digital, radio and print channels. Other tactics for the overall rate choice awareness campaign include games, reward programs, energy kits with efficient products such as smart thermostats for purchase or giveaway, and behavioral pledges.

Opt-in TOU segmentation strategyPG&E intends to conduct a campaign in 2017 and 2018 to increase voluntary enrollment on their current time of use rate offerings, E-TOU-A and E-TOU-B.42 They intend to use this period to increase enrollment on TOU in order to "provide positive customer experiences" for those who might be best served on a TOU rate and to drive peak load reduction since customers who opt-in to TOU typically make greater reductions than those who are defaulted.43

Greenberg originally suggested targeting high income customers who will receive an annual benefit from switching to TOU rates. PG&E performed an analysis of its customers’ last 12 months of usage and identified approximately 2.2 million customers who would benefit on existing TOU rates, with 26% of those customers on CARE. PG&E disagrees with Greenberg’s suggestion to focus on high income customers and asserts that 28% of CARE customers are net positive 42 Enrollment on E-TOU B is capped at 225,000 customers, per D.15-11-01343 D.15-07-001, FOF 41.

27


on an existing TOU rate without any behavior change and that 65% of the 45,000 CARE customers with monthly bills of $200 or more would benefit significantly from shifting to TOU44. Therefore, PG&E proposes to focus its voluntary TOU outreach in 2017 on those customers who would benefit from switching to E-TOU B, especially CARE and highly impacted customers who may be defaulted to a rate not as beneficial to them as the existing TOU rate options. PG&E will add outreach to E-TOU-A benefiters in 2018, incorporating learnings from the Opt-In TOU pilot.

Once those customers have been identified, PG&E proposes to communicate to them through different messaging approaches based on the psychographic segments that are predominant among the targeted customers. The majority of the outreach PG&E has considered for this campaign is direct marketing to its customers through mail, email and phone, personalized with the customers' usage and current rate plan. They plan to supplement this through targeted digital channels as well, including customers who may be making relevant purchases or doing relevant research. For retention, PG&E plans to provide welcome kits, 8 weeks of supporting communication and seasonal communications that reference a customer's personalized data and usage.

Default TOU segmentation strategyDefault TOU ME&O will not be targeted at any specific customer groups. Instead customers will be segmented according to whether they are likely to be positively or negatively financially impacted by the default TOU transition, as recommended in the Blueprint.

44 AL 4949-E, p.72.

28


45

PG&E intends to transition customers on a rolling, month-to-month basis, with 500,000 customers being transitioned each month during the months of March through April and October through December, avoiding months with typically high bills and associated high volume for customer contact centers. PG&E intends to drive customer awareness and understanding of rate options and of the ability to opt-out, and to provide ongoing education about how to successfully shift usage from away from the peak period.

PG&E's marketing strategy will concentrate on direct marketing to customers with personalized messaging up to four times before default. They reject the Blueprint's greater emphasis on mass media, stating that a mass media campaign is not suited for a rolling default and would cause customer confusion about whether they are on a TOU rate or not. PG&E points to its small and medium business TOU transition as an example of a rolling default with low amounts of mass media.

Defaulted PG&E customers will receive an initial direct mail or on-bill notification between 120 and 60 days before default, with additional follow-ups through direct mail, email or phone. PG&E will also hold 'telephone town halls' with the ability to question a live representative

45 AL 4949-E, p.80.

29


(in English or other languages). PG&E states they are evaluating the use of targeted digital outreach but are again concerned that this could lead to customers being confused about whether they are on a TOU rate or not. PG&E intends to further tailor default messaging based on its customers’ psychographic and load profiles. To promote retention on the default TOU rate, PG&E plans to conduct multi-channel campaigns to reinforce load shifting behavior and seasonal tips. PG&E intends to leverage results from the opt-in and default pilots, as well as the opt-in campaigns it will be running in 2017 and 2018.

Based on PG&E's descriptions of how TOU will be marketed to customers, the majority of work is intended to be completed by direct marketing. While PG&E mentions that it will avoid the level of mass media Greenberg suggested in order to avoid customer confusion, it does not mention how the overall campaign, with its emphasis on high volume digital impressions, will place time-of-use and rate options front and center, which may lead to many customers only hearing about time-of use from statewide messaging and the 120 or 60-day notice. PG&E was asked to describe how the overall plan was incremental to its current energy efficiency and demand-side management marketing activities. As noted above in the comments on budget, we ask that PG&E provide examples of integrated rate reform marketing at the quarterly PRRRs and describe the balance between funding streams between rate reform and other DSM campaigns.

Psychographic segmentationThe December 17 Ruling emphasized the role of psychographic segmentation46 and called on the IOUs to better segment customers for outreach activities. PG&E already has a set of psychographic segments that it uses for its marketing and outreach activities.47 These range from highly environmentally motivated customers to customers who care mostly about their bill. Various factors go into the assignment of customers to these segments, including payment behavior and preferences. Per recommendation from Greenberg, psychographic segmentation should overlay the financial impact segmentation, and messaging based on personalized data should be given the highest priority. Customers who are identified as positively, neutrally or negatively financially impacted by TOU/SUE/tier collapse 46 December 17 Ruling.47 AL 4949-E, p.15.

30


should be provided with information according to that impact, their own usage and behavior, and their psychographic persona. PG&E provides examples of how personas will be used in its opt-in and default TOU messaging.48

Low-income customersLow-income customers are segmented in various ways throughout the different campaigns PG&E intends to run. Low-income customers who are enrolled in CARE and those not enrolled in CARE received different program recommendations in PG&E's Tier 1 and Tier 2 outreach. Low-income customers are targeted according their usage and behavior for other campaigns, with income and/or CARE providing an additional layer for customization of messaging. PG&E plans to target low-income customers who could benefit from TOU for its opt-in campaign. The main difference in segmentation for low-income customers versus non-low-income customers in the opt-in and default TOU campaigns will be the magnitude of the potential bill increases and/or decreases that place a customer in the 'neutral, 'benefiter' and 'non-benefiter' category.

‘Hard to reach’ customers and community based organizations (CBOs)In the Blueprint, Greenberg emphasized the role of community based organizations or the ‘network of networks’ to bring information on rate reform to niche populations and those who are isolated due to language, geography, poverty and disability. They believed it was necessary to provide partner organizations with messaging relevant to the populations they serve in order to retain authenticity and increase engagement even when delivering potentially negative news.49 They also noted that customers who receive the same message from multiple sources (i.e. several CBOs, the IOU, a statewide campaign) would find the message more credible.

In their CBO strategy, PG&E plans to target customers in the following ‘hard-to-reach’ categories:

1. Disabled 2. Elderly 3. Limited English proficiency

48 AL 4949-E, p.75.49 Blueprint, p.268.

31


4. Geographic isolation (rural communities) 5. High poverty 6. Racial/ethnic minorities 7. Transient families who move frequently 8. Housing type (multifamily/mobile home) 9. Home ownership (renters) 10. Education and literacy levels 11. Refugee status50

To this end, PG&E plans to work with their partner organizations to host co-sponsored events, provide continuous training on rate reform issues to CBO staff (Residential Rate Community Ambassador Program) and provide sponsorship for CBOs to attend events and perform canvassing of communities beyond what they would normally be able to afford.

We approve PG&E’s ME&O strategy as written, on condition that they provide examples of integrated messaging are provided to the Working Group on a regular basis.

Marketing automationIn the Blueprint, Greenberg recommended that the utilities pursue a marketing automation strategy to complement the extensive targeting and segmentation required for the default TOU rollout. Greenberg emphasized that utilities had extensive data on customers, e.g. their usage from smart meter data, their location, their payment behavior, CARE enrollment status, communication preferences and psychographic profile. This data should exist within a single ecosystem in order to carry out a complex marketing campaign and to target customers with the correct message based on their individual information.

In their advice letter, PG&E described the marketing software programs they have acquired and the integration to date of their various systems to provide individualized outreach to customers. PG&E shall provide a short progress report on marketing automation and data integration efforts in its quarterly PRRRs.

Coordination with other activities50 AL 4949-E, p.112.

32


One concern of the Commission is how any rate reform ME&O effort interacts with and avoids conflict with other residential programs, including the CARE and ESA programs, current energy efficiency and demand response programs and the effort to increase uptake of energy management technology per AB 793. The Commission also expressed concern on how the IOUs’ ME&O activities would be integrated with the ME&O ordered in the Statewide ME&O proceeding (A.12-08-007).

Energy Efficiency/Demand ResponseUtility energy efficiency and demand response programs currently have significant budgets and ME&O efforts of their own. PG&E indicates that much of the data on customers (such as the Energy Efficiency Opportunity Score51) and research from these programs has been leveraged for rate reform marketing development. Energy efficiency and demand response programs are crucial components of any communication promoting bill management tools and solutions. PG&E also indicated that marketing dollars for these programs will be leveraged in integrated campaigns such as the 2017 Summer High Bill Campaign that features energy efficiency and demand response solutions alongside rate reform marketing.52 PG&E states that plans for rate reform integration are also included in its Energy Efficiency Business Plan.53

51 AL 4949-E, p.14. PG&E maintains an Energy Efficiency Opportunity score for each customer based on their energy savings opportunity compared to their peers.52 AL 4949-E-A, p.6.53 PG&E’s Energy Efficiency Business Plan, filed in A.17-01-015.

33


CARE/ESA decisionIn their letter, PG&E states that roughly 26% of residential customers are enrolled in CARE but that less than 4% of those customers are currently on an existing voluntary TOU rate.54 CARE customers will also be facing a gradual decrease of the CARE discount over the period of the ME&O plan. CARE and ESA have already been integrated into outreach to customers in the course of tier collapse, and opt-in and default TOU messaging will take into account a customer’s CARE status. Integration between CARE marketing and rate reform marketing was also ordered by the CARE/ESA decision (D.16-11-022). PG&E has proposed that, in addition to integrated brochures and seasonal campaigns, to also integrate rate reform messaging in CARE retention materials and CARE welcome kits. Further integration efforts should be detailed in PG&E's CARE/ESA Marketing Plans. Statewide The December 17 Ruling directed the IOUs to include plans for coordination between the IOUs’ ME&O activities and the statewide ME&O activities ordered in the Statewide ME&O proceeding (A.12-08-007), and to include details on how messaging content, campaigns and communication plans will be aligned. The marketing contractor, Greenberg, suggested a statewide plan that would overlay the IOU plans with a high-level, generalized message on how to use energy that would appeal to customer's emotions while leaving the communication of details on TOU programs and rates to the IOU marketing efforts. The statewide campaign would provide 'air cover' to prepare customers to receive the message of default TOU. At the September 12 Workshop, parties expressed support for an emotion-focused 'air cover' message, but disagreed on the governance structure of that potential campaign and discussed concerns with the format of the statewide campaign. Specifically, parties were concerned with who the ‘messenger’ would be for the emotion-focused ‘air cover’ message.55 Taking these concerns about the statewide campaign56 into account, the September 30 Ruling asked

54 AL 4949-E, p.13.55 In workshops and in the Blueprint, Greenberg proposed the ideas of using the CPUC’s brand, the governor or the Energy Upgrade California brand to communicate with customers56 September 16, 2016 workshop.

34


the IOUs to provide their own suggestions on what format a statewide campaign should take.

Instead of providing suggestions on the format a statewide campaign should take, PG&E provided a list of elements they believe must be resolved before any statewide campaign should be implemented and suggested that a consultant be hired to align the work between the current EUC campaign and the rate reform work.

While this was not in compliance with the September 30 Ruling, we accept PG&E's suggestion. The Commission is currently exploring how best to work with the current EUC contractor to enact a statewide campaign that is fully aligned with the current EUC campaign and builds on that work to achieve rate reform objectives. We anticipate that this process will involve the ME&O Working Group and may require significant revisions to PG&E’s ME&O plan. PG&E shall provide revisions to its plans based on consultation with any consultant hired to align the work between rate reform and statewide ME&O outreach by Tier 2 advice letter no later than February 28, 2018.

Protest discussion

BudgetIn their protest, ORA requested more granular budget information and that any audits of the RRRMA be included in the PRRR reports. PG&E has provided a further breakdown of their budget in AL 4949-E-A and has agreed to provide all audits in the PRRR reports as requested.

Statewide integrationCforAT and the Greenlining Institute, as well as TURN, emphasize that any ME&O planning efforts should be coordinated between this proceeding, and potentially consolidated with, the Statewide ME&O Proceeding A.12-08-007. They each go on to suggest that funds for 2017 ME&O efforts be put on hold; CforAT suggests until after coordination with the Statewide proceeding is complete and TURN until after the TOU rates that customers will be defaulted to are decided in 2018.

35


The Commission is currently working to integrate a statewide portion of rate reform ME&O with the Statewide ME&O proceeding and effort. However, the IOU specific ME&O Plans should not be delayed while that process is ongoing.

Is planning ME&O for default TOU premature? In TURN's protest, they contend that the Commission should reject PG&E’s plan and require them to re-file a more modest plan for 2017 and wait for any further expenditures until after the default TOU rate is known. They ask in lieu of that that the $10.5 million budgeted for the ‘overall plan’ in 2017 be reduced as the ‘overall plan’ as described is designed to provide the same general messaging and education that is performed by existing budgets and programs. TURN believes that most of the plans as described will reiterate current behavioral messaging on energy efficiency and are not additive. They also believe that TOU messaging will dilute the messaging related to tier collapse and other rate reform efforts.

TURN's concerns are thoughtful and could have been offered earlier in the process, however, no TURN representative has attended any Working Group meetings, and no TURN representative was interviewed by Greenberg, despite numerous attempts by the consultant group to reach out to them. In Working Group meetings, the necessity of gaining opt-in TOU customers before default to reduce the numbers of customers who will have to be defaulted and of gaining customers who have positive experiences on TOU to serve as positive examples to other customers were discussed. The problem of not knowing the rates until shortly before default was also discussed and both the Blueprint and IOU plans address this challenge by emphasizing a ramp up in specific communications 90 days before default.

With regards to the overlap between the 'overall plan' and existing programs and budgets, PG&E was asked to address this in its supplement, AL 4949 E-A.57 There they explained that rates messaging seeks to help customers gain awareness and understanding of their rate options, with participation in other programs offered as solutions and tools. They detail how funding from the budgets from those other programs is used to co-fund the materials included in the 'overall plan.' They also managed to reduce 57 AL 4949-E-A, p. 4.

36


the budget for 2017 by $2.2 million. Lastly, PG&E has already collapsed its rate structure to two tiers and introduced the SUE charge, so large-scale ME&O for these two changes is winding down, reducing the likelihood of rate reform message confusion.

We understand TURN's statement that there are many unknowns in the next few years that may affect the ME&O plans in the next few years. There will be results from the messaging tests in the default TOU pilots set to begin in 2018. There is data from focus groups run by the utilities in late 2016 and early 2017 that need to be incorporated into the ME&O plans58 and that can help shape rate education messaging. There is an entire statewide campaign that will need to be coordinated with the IOU plans. For this reason, we have asked PG&E to submit any revisions based on the Working Group process of developing a statewide campaign by February of 2018. The ME&O Plans as submitted by the IOUs are starting points and must remain flexible and subject to review and revision through consultation with the Working Group.

PG&E catalogs these and other risks to the plan in its supplement, as directed by the September 30 Ruling.59 The Commission finds that because of these unknowns, and because defaulting most residential customers in the state to time-of-use rates is a large undertaking, there is a great deal of preparation which must begin immediately.

COMMENTS

Public Utilities Code section 311(g)(1) provides that this resolution must be served on all parties and subject to at least 30 days public review and comment prior to a vote of the Commission. Section 311(g)(2) provides that this 30-day period may be reduced or waived upon the stipulation of all parties in the proceeding.

The 30-day comment period for the draft of this resolution was neither waived nor reduced. Accordingly, this draft resolution was mailed to parties for comments, and will be placed on the Commission's agenda 58 The IOUs completed a series of such groups in fall 2016 and the results can be found on the Energy Division’s website.59 The Greenberg Blueprint contains suggestions for the Working Group to create a sub group to monitor ongoing risks to the project.

37


no earlier than 30 days from today.

FINDINGS

1. Decision 15-07-001 directed Pacific Gas and Electric Company (PG&E), along with the other two electric investor-owned utilities, to form a Working Group to address issues regarding marketing, education and outreach (ME&O).

2. The December 17, 2015 Assigned Commissioner and Administrative Law Judge ruling directed PG&E to prepare a comprehensive ME&O plan.

3. Up to 4 million PG&E residential customers may be defaulted to time-of-use (TOU) rates.

4. PG&E's initial baseline study found that 49% of PG&E's residential customers are not sure what rate plan they are on and that 11% think they are on a TOU, vs. the 4% that are actually enrolled on a TOU rate.

5. Customers must be engaged on an emotional as well as intellectual level to affect change in behavior.

6. PG&E will use a test-and-learn approach to its ME&O activities in 2017 and 2018.

7. PG&E designed its plan to reduce the cost of the estimated budget compared to the Greenberg Blueprint.

8. PG&E chose to use less mass media than described in the Greenberg Blueprint.

9. It is a priority of the Commission to use the various budgets that have been allocated for different ME&O activities in different program areas in an efficient manner.

10.PG&E will record ME&O expenses in its Residential Rate Reform Memorandum Account (RRRMA).

11.PG&E will provide cost per impression and cost per customer figures to the Working Group when presenting adjustments to the budget.

12.Any results from test-and-learn activities must be communicated to the Working Group so that others can learn and benefit from the potential savings.

38


13.PG&E will use percentage of customers on the “right rate for them” as a goal metric for its ME&O Plan.

14.PG&E will run its customer survey twice a year until 2018 and then three times a year.

15.One important goal of introducing default TOU is to manage residential demand at high cost hours and have customers respond to price signals.

16.It is also a priority of the Commission to provide options and education to customers so they can understand and chose which rate best suits their usage and lifestyle.

17.It is appropriate for the Working Group to set targets for metrics to measure year over year improvement.

18.PG&E will work with the other IOUs to provide supplemental analysis on metrics and a common metrics dashboard.

19.PG&E will run seasonal campaigns through various channels to inform customers about rate options.

20.PG&E will conduct an opt-in TOU campaign from 2017-2018 that will focus on those who would benefit from switching to TOU, regardless of income.

21.The majority of PG&E’s MEO plan consists of direct marketing, supplemented by targeted digital channels and public relations.

22.PG&E will provide welcome kits and 8 weeks of supporting communication to opt-in TOU customers.

23.PG&E will segment its default TOU messaging based on the potential bill impacts of default TOU to the customer.

24.PG&E will contact customers up to 120 days before being defaulted to TOU and no later than 60 days before default.

25.Psychographic segmentation should overlay the segmentation by impact.

26.The main difference in segmentation between low-income and non-low-income customers is the dollar threshold for bill impacts.

27.PG&E possesses extensive data on customers and that data should exist within a single software ecosystem in order to target customers with the correct message based on their individual information.

39


28.PG&E has leveraged much of the data on customers and research from their energy efficiency and demand response programs.

29.Instead of providing suggestions on the format a statewide campaign should take, as ordered, PG&E provided a suggestion that a consultant be hired to align the work between the rate reform proceeding and the statewide ME&O proceeding.

30.PG&E will provide revisions to its plans based on consultation with any consultant hired to align the work between rate reform and statewide ME&O outreach.

31.PG&E will provide all audits of the RRRMA in their PRRR reports.32.ME&O Plans should not be paused while the Commission decides

how to integrate the rate reform and statewide ME&O work.33.PG&E will provide information to the Working Group as its ME&O

Plan evolves through data from the default TOU pilots.

THEREFORE IT IS ORDERED THAT:

1. The request of the PG&E to adopt the marketing, education and outreach plan as requested in Advice Letter AL 4949-E and 4949-E-A is approved as modified herein.

2. PG&E must include any internal and external audits of the RROIR Memorandum Account (RRRMA) in future Progress on Residential Rate Reform (PRRR) Quarterly Reports.

3. PG&E must notify the Working Group of any deviation from the currently approved budget of more than $250,000 and the rationale must be described in the next applicable PRRR.

4. PG&E is ordered to create a data visualization dashboard or tool containing metrics and tracking data for Working Group members and parties to access to be updated with the PRRR.

5. PG&E is ordered to complete a pulse survey of customers in the first wave of any rolling default.

6. PG&E must file a Tier 2 Advice Letter containing targets for the metrics adopted here as well as any revisions to the plan based on integration with the statewide campaign and input from the statewide consultant and ME&O Working Group by February 28, 2018.

40


7. PG&E is ordered to provide examples of integrated rate reform marketing at quarterly PRRR meetings.

8. The timelines provided showing examples of communications received by customers must be updated and provided to the Working Group on a regular basis.

9. PG&E must provide a short progress report on marketing automation in its quarterly PRRR reports.

This Resolution is effective today.

I certify that the foregoing resolution was duly introduced, passed and adopted at a conference of the Public Utilities Commission of the State of California held on November 30, 2017; the following Commissioners voting favorably thereon:

_____________________TIMOTHY J. SULLIVANExecutive Director

41


APPENDIX 1

42


Table 1

199098418 43


Vision Metrics Sub-metrics that contribute to the Vision metrics

% of Californians feel a personal connection to electricity and feel strongly that it is important to be thoughtful about when and how much they use

% of customers who strongly agree that they have a personal connection with their electricity use

% of customers who agree that it is important to thoughtfully manage their electricity use

% of customers who strongly agree that how much electricity they use at certain times of day matters

% of IOU customers who are on the ‘right rate’ for them

% of customers who are aware that they have rate choices

% of non-exempt customers (as defined by Commission decision) who remain on the TOU rate 15 months after default (3 months after bill protection ends)% of customers who are satisfied on their rate

% of IOU customers on TOU rates sustain at least one significant peak reduction action for 12 months after defaulting to the TOU rate

% of customers who are motivated to reduce peak load% of customers who indicate they will take peak-load reduction actions in the future% of customers who cite significant peak load-reducing behaviors

Table 2

44

resolution template - californiadocs.cpuc.ca.gov/.../g000/m199/k098/199098418.docx · web viewthis...

Documents