A Look at Changing Utility Pricing Structures March 23, 2016
Today’s Presenters
Scott Whitmire
Dave Elve
Project Manager
Executive Vice President & Chief Marketing Officer
Southern Company
PayGo
Nathan Shannon Deputy Director
Smart Grid Consumer Collaborative
Agenda
Introduction - Realizing the benefits of AMI through dynamic pricing plans
Scott Whitmire, Georgia Power
Dave Elve, PayGo Utilities
Question and Answer Session
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2016 State of the Consumer Report
• Theme 5: Consumer and industry experience indicate a path forward for Smart Grid-enabled pricing programs
• Findings indicate that consumers prefer electricity pricing plans that limit their financial risk
Speaker #1
Background
Name
Scott Whitmire
Project Manager at Southern Company • Employed by Southern Company for 30 years and now part of Customer Service •
Has been working on Georgia Power’s Payment Strategy for the last three years
•
Has worked in many areas of the company, including Generation, Transmission and Distribution, Finance and Information Technology
•
Bachelor of Applied Science (BASc), Computer/Information Technology Administration and Management from Clayton State University
Georgia Power’s Pricing Plans and PrePay Initiative SGCC Webinar March 23, 2016
Agenda • Georgia Power – Other Initiatives • How did we get here?
• Why PrePay? • Successes, Opportunities, Lessons Learned
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Georgia Power Smart Usage Rate (SUR) • • •
Georgia Power began actively marketing the Smart Usage Rate in May 2015. SUR is a demand based rate with a time of use component for residential customers. Customers are encouraged to keep their electric energy charges low by shifting how and when they use major appliance. • To keep the demand (kW) charge low customers space out when they use major appliance. Customers can hit their max demand charge 24 hours a day/7 days a week • Reducing kWh charge means shifting when electricity is used to Georgia Power’s off-peak hours. Georgia Power is on-peak June-September, 2PM -7PM.
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How Did We Get here? Customer Engagement Study • 2013 – Bain Consulting assisted us in a study of our customer base • Result included an overview of GPC residential customer group’s key characteristics Mass Market Homeowners
Everyday Georgia
Just Getting Young and Established Households Day to Day Started Mobile
% of population
52%
17%
13%
7%
6%
5%
% of profit
52%
16%
18%
-2%
-1%
17%
Payment history
Great
Poor
Very poor
Very poor
Great
Good
Power usage
Average
Average
High
Low
Lowest
Highest
Own/ rent
Own
Own or Rent
Own
Rent
Rent
Own
Age
Older
Middle
Middle
Younger
Younger
Older
Income
Higher
Middle
Middle
Lower
Lower
Higher
Marital status
Married
Single
Married
Single
Single
Married
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Five themes surfaced while examining pain points across the customer value chain Customers want more flexibility and ease with payment options
Start, Move, or Stop Service
Customers want a seamless transfer service process
My Bill & Energy Usage Information
Customers want to use their preferred method of payment
Payment Options
Customers want more information on outages, usage and rate plan options
Outages & Service Issues
Additional Products & Services
Customers want more products & services from GPC (energy efficiency)
How Did We Get here? Payment Strategy Initiatives • More Flexibility • How about more locations that are open longer hours and on weekends • Preferred Method of Payment • Credit/Debit is the new preferred method • Payment Options • Pay when you want and how you want Customers want more flexibility and ease with payment options
Customers want to use their preferred method of payment
Payment Options
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Why PrePay? Benefits to Customer
Benefits to Company
• No deposits, No reconnect fees
• Charge-off reduction and collections
• Utilize existing deposits • Pay off past due amount over time
• A better option for some customers (Customer Satisfaction)
• Pay any time, pay any amount
• Regulatory (GPC)
• Control!
• Return on AMI investment
• Convenience
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How Is It Going? Georgia Power’s PrePay Program - Successes • Just under 10,000 customers enrolled
• Collected over $900,000 in 2015 from 25% rule • Over $1.5M to date • By the end of 2015, in first full year, we had 8% of the eligible residential population on the program • 56% of active accounts have obtained a zero ($0) deferred balance
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How Is It Going? Georgia Power’s PrePay Program – Opportunities & Lessons Learned • Experienced a couple of periods where we had more unenrollments than enrollments • Issue #1: Hot summer and technology issues • Issue #2: CSR’s not following unenrollment policy • CSR Training is vital to success of PrePay • Set aside time for detailed training for: • Clear understanding of how PrePay works • How can the Customer get it if the person selling it doesn’t get it? • What to say and what not to say when enrolling • Example: “You only have to pay $XX to get started…” • Make sure the Benefits are clear • Make sure the Process is clear • Get that customer call to the right person(s)!
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Speaker #2
Name
Background
Dave Elve
Executive Vice President & Chief Marketing Officer at PayGo • Numerous executive roles in the energy industry in a career which spans over 20 years and worked with numerous utilities on their Smart Grid programs •
Active Investor and adviser to several energy industry ventures including PayGo, Verdeeco, Enspiria and Preparis
•
Founder and past President of the Smart Meter Manufacturers’ Association of America (SMMAA)
•
Named to the FierceEnergy “15 Most Influential people in Energy”
•
Holds a B.S. in Business, a MBA in Finance and is a graduate of the Georgia Tech Management Institute’s Executive Program
Prepay: Meter to Cash Leveraging Smart Grid Investment for Customer Engagement
• • • • • •
Customer Payment Customer Customer Account Updated
IVR CSR Web Portal Mobile Kiosk Existing Utility Payment System • Walk-up cash
Utility CSR
Bank
RF, PLC
AMI Collection Engine Software
ESB
CIS
PayGo Utilities 2016©
Utility Funds by 9am
Mesh
MDMS
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What is going on in the Industry… Customers
Utility
• Background
• Higher customer sat scores • Energy Efficiency (sustainability)
– 33% of smart phones users have prepaid mobile plans – 20% customers are underbanked – 20% of utility customers move annually
• Pay As You Go benefits – – – –
– 7.5% - 12.7% reduction in usage
• Operational savings – Write-offs reductions – Long term call center reductions
No deposits No Late Fees No Reconnect Fees Reduction in usage
• Sample Customer Use Cases
PayGo Utilities 2016©
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Market Overview • Less than ½% of electric meters are prepaid – …..vs. 33% of smart phones – 10 IOUs either contracted or in some stage of the prepay lifecycle
• Studies: 15-20% will enroll in prepay energy • Customer advocates in Georgia and elsewhere starting to show support • Millennials, environmentally focused and financially challenged are key demographics • Global markets include gas and higher enrollment rates
PayGo Utilities 2016©
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Lessons Learned • • • • •
Beneficial additional layer to smart grid (Day 2 benefits) Not just about technology…. Business process change is crucial Marketing not to be overlooked Ubiquitous (and cheap) payment channels needed – 3X more payments on prepay
• The Call Center is the key channel – Increase enrollments 3X by call script redesign and comprehensive agent training – Several other IOU are currently engaged in a similar agent “sales agility” program
PayGo Utilities 2016©
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Thank you!
You will receive a copy of todays slides to the email you used to register
Scott Whitmire
Dave Elve
Project Manager
Executive Vice President & Chief Marketing Officer
Southern Company
PayGo
Nathan Shannon Deputy Director
Smart Grid Consumer Collaborative