Tuesday, April 26, 2016

Customer Engagement Success Stories

This past week, Pablo Bauleo, Ph.D from Fort Collins Utilities, Lupe Jimenez from the Sacramento Municipal Utilities District (SMUD) and Sonia Kreimer from Pepco Holdings (Pepco) joined SGCC for our 2016 Customer Engagement Success Stories webinar. This webinar was intended to bring to life SGCC’s ongoing Customer Engagement Success Stories Project which documents the innovative customer engagement strategies and tactics implemented by our Members.

Kicking off the webinar, Pablo walked us through the intricacies of the Fort Collins Utilities Peak Partners Program which combines smart thermostats and water heater controls into a single demand response program. Pablo provided attendees with an overview of the City of Fort Collins, and explained that roughly 18% of the city’s 150,000 residents are students, a factor that was taken into account during the program’s development. Further defining the Peak Partners Program, Pablo explained that the program’s intent is to reduce demand on the grid while providing financial savings for residents. In order to achieve the results, Pablo explained that Fort Collins Utilities set out to design their demand response program with ease of use for the customer as the central tenant. Fort Collins Utilities smart thermostat program was designed to use a customers’ existing Wi-Fi network for communication while the hot water heater controls were designed to use a cellular network.

Pablo further explained that these communications decisions were made at the benefit of the customer and to address the high rate of churn associated with college students and young professionals. By implementing the Wi-Fi configuration for the smart thermostats, any resident can easily attach the thermostat to their home network without the help of Fort Collins Utilities. It was also found that residents who are enrolling in the smart thermostats program are relocating less frequently–less than 20% churn every three years–making Wi-Fi a reliable source of communication. Inversely, the hot water heaters run off of a cellular network so that no matter who moves into a home or apartment, Fort Collins Utilities does not have to make a service call to adjust the communications settings. Fort Collins Utilities found that for hot water heaters, the rate of churn is as high as 80% every three years, partially influenced by the college students and young professionals living in and moving among apartment complexes.

As both of these programs have been active over the past two years, Pablo explained that Fort Collins Utilities has already seen 175,000 smart thermostat sessions (people interacting with the thermostat to adjust their efficiency and usage) helping decrease demand on the grid while reducing electric bills up to 10% for participating customers. Transitioning to lessons learned, Pablo explained that it’s important not to automatically calculate resource availability based the total number of installed devices, as residents may choose to override the device, or there may be technical difficulties that limit participation. Pablo further explained the importance of only selecting a subset of each community to participate in any given demand response event to ensure that there are additional untapped resources should there be a technical malfunction or the need for additional capacity. Additionally, Pablo explained that matching the communications framework (cellular vs. Wi-Fi) based on customer attributes (such as segmentation) has become a great way to decrease maintenance calls.

Continuing along, Sonia took the reins to explain the customer engagement strategies surrounding Pepco’s Peak Energy Savings Credit and Energy Wise Rewards program, together known as the “Two Ways to Save.” Sonia explained that the Peak Energy Savings Credit program offers customer a $1.25 per kilowatt hour (kWh) bill credit for every kWh they reduce their electrical usage (against a predetermined baseline calculated on average usage) on Peak Energy Savings Days. All customers are automatically enrolled in the Peak Energy Savings Credit program as there is no penalty for not participating, and they receive a notification the day before an event is called (via the communications channel of their choosing). The Energy Wise Rewards program is a more standard demand response program that cycles air conditioners and heat pumps using a web-programmable thermostat or outdoor switch in exchange for bill credits. Together, these two options provide customers with both an active and a passive way to participate in reducing strain on the grid.

Sonia explained that educating Pepco customers has been the key to success for the Two Ways to Save program. As the Peak Energy Savings Day program requires specific action by consumers, it’s essential that they understand the appropriate energy saving actions they must take. In order to successfully communicate with their customers, Pepco performed thorough market research in order to better craft their messaging. Sonia explained that Pepco monitored favorability and awareness around specific terminology, assessed consumers understanding of benefits, tested creative messaging, and divided their customers into specific segments to help better target their messaging.

As Pepco crafted their messaging, research showed that customers are the most interested in participating in the Two Ways to Save programs in order to help the environment and save money on their bill. Building off of their research, Pepco issued brochures, bill inserts, magnets, print advertisements, postcards and digital advertising. Following this customer engagement campaign, Sonia explained that more than 77% of customers were aware of the Peak Energy Savings Credit program and more than 70% of customers received  a bill credit during the programs initial trial phase.

Providing lessons learned, Sonia explained that customers are interested in receiving information that outlines new ways to save, and that to be successful Pepco needed to utilize a variety of different communications tactics. Further, Sonia explained that multiple approaches are needed as a service territory contains many different segments of consumers, and that the most compelling educational materials were testimonials that included specific savings and energy conservation tactics. Pepco is continuing to refine their customer engagement strategies based on usage data and customer feedback to increase participation and improve program performance.

As our third speaker, Lupe from SMUD, took over the webinar to explain SMUD’s SmartPricing Pilot Program; which was funded as part of the U.S. Department of Energy’s Consumer Behavior Studies research. Lupe explained that the SmartPricing Pilot was a two-year application of experimental rate options on a sample of SMUD’s customers, intended to classify the impact of time varying rates on usage, customer  satisfaction, enabling technologies, and the associated marketing and customer education strategies. Lupe explained that SMUD made available three rate plans, Critical Peak Pricing, Time of Use with Critical Peak Pricing, and a standard Time of Use plan. A sample of consumers were automatically enrolled (defaulted) onto one of these three pricing structures while there was also the option for customers to opt-into the Pilot Program. Customers who were automatically defaulted onto a time varying rate were given a complimentary in home display (IDH) to track their energy usage.

Wanting to uphold their relatively high levels of customer satisfaction, SMUD set out to develop educational, support, and response tools to make the transition to a time varying rate as fluid as possible for their consumers. Lupe explained that prior to transitioning their rate, customers received a variety of tailored informational packets explaining how the program would work, how their billing would change, and what they could do to save money. Specific customer engagement tactics included: recruitment and outreach letters, educational micro-sites, a dedicated call center staffed with program experts, in home displays with dedicated support, electronic communications explaining savings (call, e-mail, text message), social media engagement, discount and recipe cards, as well as the option for customized billing.

Lupe explained that combined with all of these enabling technologies and support services, SMUD saw load reductions of up to 11.9% for Time of Use Pricing and 25% for Critical Peak Pricing. Additionally, a high majority of customers who were defaulted to a time varying rate chose to stay on their rate following the conclusion of the pilot program. Further analysis revealed that by a margin of 2:1, customers preferred a Time of Use rate plan as opposed to a Critical Peak Pricing, while roughly 6 out of 10 customers prefer some version of a time varying rate as opposed to a standard rate. Additionally, Lupe explained that customer satisfaction actually increased for customers who were enrolled in the SmartPricing Pilot Program, which had been an initial worry when designing the program.

Equipped with this research, SMUD has made available an optional Time of Use rate plan for a subset of customers and plans to migrate all of their customer to a Time of Use rate plan by 2018. Serving a dual purpose, Lupe explained that this transition will help reduce demand on the grid while helping customers save money on their monthly bills, a strategic “win” for everybody involved.

If you are interested in learning more about these programs, or would like to hear the Question & Answer session that followed the webinar, I encourage you to watch the recording. Additionally, you can download any of the Customer Engagement Success Stories that were mentioned on this webinar by visiting smartgridcc.org.  To make sure that you’re up to date on all Smart Grid Consumer Collaborative activities, including the forthcoming launch of our Empowered Consumer Report, make sure that you’re signed up for our mailing list.