4722-E-APDF. Opens in new Window.

69 Pages·2016·2.51 MB·English

Erik Jacobson Pacific Gas and Electric Company
Director 77 Beale St., Mail Code B10C
Regulatory Relations P.O. Box 770000
San Francisco, CA 94177

Fax: [phone]

March 25, 2016

Advice 4722-E-A
(Pacific Gas and Electric Company ID U 39 E)

Public Utilities Commission of the State of California

Subject: Supplemental: PG&E's Outreach and Education Plan for
Implementing the Super User Electric Surcharge per D.15-07-001

In compliance with California Public Utilities Commission (Commission or CPUC)
Decision (D.)15-07-001, and as directed by the Energy Division, Pacific Gas and
Electric Company (PG&E) hereby submits the following Supplemental Super User
Electric (SUE) Surcharge Outreach and Education plan. As described below, this
supplemental filing is pursuant to Ordering Paragraph (OP) 8 of D.15-07-001.

Purpose

The purpose of this Supplemental Advice Letter is to provide the additional information
requested by the Energy Division on February 25, 2016 seeking greater detail on the
following specific aspects of PG&E’s Super User Electric (SUE) surcharge (“Surcharge”
or “SUE Surcharge”) education and outreach program:

1) Provide more data on the SUE customers in your territory: where are they, who
are they (program overlap, what is their living situation), and why their usage
exceed 400% of the baseline allowance? This may include demographic and
psychographic information;
2) Using the above data, please outline any plans to address specific usage with
specific programs/rebates/outreach (i.e. pool pump rebates, AC cycling, etc.);
3) Outline your plans for tracking and reducing the number of people who receive
the SUE charge;
4) Provide customers with a phone number to call in addition to online assistance;
5) Include information on providing intra-month notifications and/or barriers to
providing intra-month notifications;
6) Please attach an example alert letter;
7) Please provide any proposed name for the surcharge; and
8) Set forth any other revisions based on your review of SUE customer data.
Advice 4722-E-A - 2 - March 25, 2016

Background

On July 3, 2015, the Commission approved D.15-07-001, Decision on Phase 1 of
Residential Rate Reform for Pacific Gas and Electric Company, Southern California
Edison Company, and San Diego Gas & Electric Company and Transition to Time-of-
Use Rates (the Decision), that reforms residential electric rates during the years 2015 to
2020 and transitions customers to time-of-use (TOU) rates.

The Decision adopted a Super User Electric surcharge which is intended to send a
message to high use customers informing them that their usage is significantly above
typical household use and encouraging steps to conserve. The Surcharge, which is to
begin in 2017, will apply to usage above 400% of baseline.

The Decision set the following glide path for phasing-in the Surcharge:1

Year Ratio relative to Tier 1
rate
2017 1 : 1.89
2018 1 : 2.033
2019 1 : 2.19

The Decision also states that “for all customers using over 400% [above baseline], the
Surcharge in 2017 should be no more than 2 cents greater than the 2016 rate for usage
at 400% [of the baseline quantity] and the final glide path should be adjusted
accordingly.”2

Investor Owned Utilities (IOUs) were required to file “a Tier-2 Advice Letter setting forth
the outreach and education, including bill presentment, plan for implementing the
Super User Electric Surcharge”3 no later than October 16, 2015. A copy of PG&E’s
Advice Letter 4722-E is included in Attachment 1.

On February 26, 2016, based on new information and thinking discussed by the ME&O
Working Group and Commission staff, the Energy Division requested that each IOU
provide a Supplemental Advice Letter setting forth additional information on its outreach
and education plans for the Super User Electric Surcharge.

1 D.15-07-001,mimeo, p. 125. The Decision’s stated target glide path figures are subject to
other terms in the Decision which may cause somewhat different ratios to result, as it is rolled
out in each of 2017, 2018, and 2019. PG&E will consult with Energy Division prior to future
Advice Letters implementing SUE ratios pursuant to the terms of the Decision.
2 D.15-07-001, mimeo, pp. 278-279.
3 D.15-07-001, Ordering Paragraph 8.
Advice 4722-E-A - 3 - March 25, 2016

The requested supplemental information is included below.

Overview

PG&E’s education and outreach strategy aims to inform all residential customers of the
new Surcharge that is targeted to begin on March 1, 2017. The outreach material will
also provide information on how to conserve energy to avoid or minimize the Surcharge
in the future. PG&E’s education strategy includes:

(1) General education (such as bill inserts) to inform all customers about the
Surcharge, regardless of their historical usage;
(2) Targeted communications to forewarn customers whose usage is at risk of
exceeding 400% of their baseline allowance and thus may be at risk of incurring
the Surcharge starting in 2017. This communication will target customers who
use 350% to 399% of baseline4 at least one month during the prior year and also
customers who use 400% and above at least one month during the prior year;
and
(3) Communications notifying customers that they have indeed incurred the
Surcharge and giving them actionable energy conservation tips.

This multi-touch approach, illustrated in the SUE Outreach Roadmap presented in
Section 8 below, as well as in the Customer Journey diagram presented in Attachment
2 is intended to raise customer awareness and understanding, and provide them with
the information resources to engage in efforts to reduce their usage. PG&E’s strategy is
intended to be consistent with the Commission’s goal to send a message to customers
that their usage is significantly above that of the typical household, and that they should
consider taking conservation steps to avoid or minimize their incurrence of the
Surcharge in the future.

1. More data on PG&E Customers At Risk for Incurring the SUE Surcharge

PG&E conducted further analysis on potentially impacted customers to inform its
targeted outreach and education strategy.

Based on this analysis, PG&E found that there were 309,784 customers in 2015 whose
usage exceeded 400% in at least one month of the year. This represents 7.13% of
PG&E’s total residential base of electric customers (4,345,577).

PG&E is proposing to revise its initial outreach proposal to provide targeted education to
customers who have historically exceeded 350%5 of the baseline allowance; they too

4 See discussion in Section 1 below.
5 PG&E notes that ORA’s Comments had suggested using 375% as the “at-risk” threshold
instead. PG&E is also open to using 375% as the threshold for developing its outreach lists, but
Advice 4722-E-A - 4 - March 25, 2016

could be at risk of incurring the Surcharge, not just those who have already exceeded
400% of baseline. As a result of these revisions, PG&E’s expanded targeted education
will reach more potentially impacted customers in an effort to help them reduce their
usage.

PG&E identified approximately 480,000 customers who reached 350% above baseline
at least once during the period from January 2015 through December 2015.

PG&E is currently developing plans to conduct targeted outreach to this larger group of
approximately 480,000 customers (using the 350% of baseline threshold), rather than
just to the more limited initial estimate of 350,000 filed in Advice Letter 4722-E, which
did not include any customers below 400%. (The data in this Supplemental Advice
Letter also incorporates more recent customer usage data, from the calendar year
2015, which was not available on October 16, 2015 when PG&E filed Advice Letter
4722-E, based on 2014 customer usage data.)

The chart below shows the breakdown of the “at-risk” customers that have reached
350% of baseline and above.
Figure 1

Premises by percentage over
baseline
200,000
e
s
mi 150,000
e
r
P 100,000
f
o
r 50,000
e
b
m
-
u
N % % % % % 9 9 9 9 9 9 9 9
9 9 0 9 9 4 9 4 9 4 9 4 9
39 44 50 54 59 0-6 0-6 0-7 0-7 0-8 0-8 0-9 0-9
50- 00- 50- 00- 50- 60 65 70 75 80 85 90 95
3 4 4 5 5

• Most PG&E customers who reach 350% of baseline (42%, or 200,100
customers) do so during 2 to 4 months of the year, most likely in the

did its analysis for this Supplemental Advice Letter based on a 350% “at-risk” threshold to show
the maximum possible outreach. Since there are a lot of customers in the 350 – 399% usage
range who have never reached 400%, and since some of those whose usage does not exceed
350% by much may never reach 400%, the use of a 375% figure could be worth considering, as
it would result in reduced outreach costs yet should provide the customers who are most at risk
of triggering the 400% surcharge the necessary direct mail outreach and education.
Advice 4722-E-A - 5 - March 25, 2016

summer months. The months having the highest occurrence for this 2-4 month
group are, in order, July, August, June, and December.

• Another 30%, or 143,000 of the “at-risk” customers who reached 350% of
baseline, only reached it during ONE month of the year.

• Adding these two groups together, the total percentage is 72% of potential SUE
customers (those who reach the 350% of baseline “at-risk” threshold during 1 to
4 months of the year).

• The remainder, or 28% of “at-risk” customers, have usage exceeding 350% of
baseline frequently – between 5 and 12 months of the year.

Figure 2 below directionally indicates the peak months that customers may be at risk for
a Surcharge. This figure groups customers by the number of occurrences (i.e.,
customers who incur a surcharge only 1 time per year, 2-4 times per year, 5-9 times per
year, 10-11 times per year, and 12 times per year). Customers who hit 350% or more
of baseline more than once in 2015 are shown in each month they exceeded 350%, so
the numbers below total more than the total “at-risk” customers (about 480,000).

Figure 2
Months When Customers Are Most Likely to Incur SUE Surcharge

140,000
120,000
100,000 1 month
80,000 2-4 months
60,000 5-9 months
40,000 10-11 month
20,000 12 months
-
Jan Feb March April May June July Aug Sept Oct Nov Dec

As mentioned above, PG&E’s data analysis shows that 72% of the “at-risk” customers
appear likely to incur the surcharge during only 1 to 4 months of the year. This is the
largest group of “at-risk” customers.

In contrast, there are approximately 103,000, or 21% of the “at-risk” customers whose
high usage is more consistent – covering between 5 to 11 months a year.
Advice 4722-E-A - 6 - March 25, 2016

The last group of “at-risk” customers, approximately 7%, or 34,058 customers,
consistently exceeded the 350% threshold level of usage during every month of 2015,
some by far more than 400% of baseline (“very high use” group).

Communications targeting this “very high use” group will differ from the other groups, as
it is believed that influencing these customers is likely to require a different behavioral
change rationale and different tips and tools. This group tends to be higher income,
more affluent, and motivated by personal comfort for themselves and their family. The
predominant Persona designation is “Gadget Family” (73%) and some of the
psychographic components that rise to the top include: positive outlook, independence,
interest in cool new things, smart and savvy, high opinion of themselves, getting
noticed, and proven to be a winner.

A small portion of this very high user group (28%) is lower income, but has motivations
around family and personal comfort. Their Persona designation is “Beyond Their
Means” and some of the top psychographic components include: cautious outlook,
positive self-image, focus on savings, open to assistance but somewhat fearful, bargain
hunters, and search for security.

The comparison of Persona designations per population group is shown in Table 1
below.

Table 1
Personas for Customers Potentially Affected by SUE Surcharge

SUE - Non-
Residential All SUE SUE - CARE
PERSONA CARE
Population Customers Customers
Customers
Beyond Their Means 5% 28% 35% 27%
Eco-Active Go-Getter 18% 0% 0% 0%
Gadget Family 7% 42% 15% 48%
Geo-Centric Basics 2% 0% 0% 0%
Geo-Centric Digitals 9% 0% 0% 0%
Geo-Centric Discounters 4% 0% 0% 0%
Heart and Home 14% 5% 9% 4%
Living for Today 9% 16% 35% 12%
Stable Living 10% 1% 1% 0%
Style Seeker 5% 0% 0% 0%
Way Wired 17% 8% 5% 9%

The SUE customer group has a much larger proportion of the Gadget Family, Beyond
Their Means, and Living for Today Personas than the overall residential customer
population. Gadget Family customers are convenience-driven, and Beyond Their
Means/Living for Today customers have priorities that take precedence over energy
efficiency.
Advice 4722-E-A - 7 - March 25, 2016

Some key characteristics of those at risk of incurring the SUE Surcharge are listed
below:

• Above average engagement

o 60% My Account

o 6% Balanced Payment Plan

o 4% SmartAC

o 4% SmartRate

o 28% past rebate

• Personas: Gadget Family (42%), Beyond Their Means (28%)

• More likely to make IVR calls (46%)

• Longer tenure as PG&E customers (73% at least 5 years)

• Homeowners (74%)

• Single Family Homes (70%), Detached Dwellings (90%)

• Larger homes (35% over 2,000 sq. ft.)

• Children present (39%)

• Home Pool (25%)

• Household Income over $100k (34%)

• Unlikely to prefer a language other than English (6%)

When comparing key characteristics between the Overall Residential Population and
SUE Customers, the SUE customers trend higher for engagement in My Account,
Home Ownership, Single Family residence and Swimming Pool.
Advice 4722-E-A - 8 - March 25, 2016

Table 2
Comparison of SUE Surcharge Recipients and Overall Population

SUE - Non-
SUE - CARE CARE
Overall SUE Customer Customer Customer
Customer Characteristics Rate Rate Rate Rate
Customers 100% 100% 100% 100%
CARE 27% 20% 100% 0%
Medical Baseline 3.5% 1% 2% 1%
My Account 51% 60% 58% 61%
Electric Only 22% 25% 26% 25%
Home Owner 63% 74% 59% 78%
Home Pool Present 13% 25% 18% 27%
Home Cooling 3% 5% 8% 4%
Single Family 56% 70% 59% 72%
Mobile Home 1% 1% 2% 1%
Energy Efficiency Rebate 22% 28% 20% 30%
Solar / NEM 4% 1% 0% 1%
Climate Distribution
Central Coastal 33% 36% 18% 41%
Central Valley 42% 41% 64% 36%
Highlands 3% 3% 4% 3%
Coastal 22% 21% 15% 22%
Mountains 1% 1% 1% 2%
Unknown 0% 0% 0% 0%

Additional data and analysis has been included for CARE, Non-CARE, and Very High
Use customer segments:

• SUE – CARE Customer Overview (Figure 3)
• SUE – CARE Customer Analytics (Figure 4)
• SUE – Non-CARE Customer Overview (Figure 5)
• SUE – Non-CARE Customer Analytics (Figure 6)
• SUE – Very High Use Customer Overview (Figure 7)
• SUE – Very High Use Customer Analytics (Figure 8)

The overview information and selected data points contained in these slides represent
the highest percentage or concentration areas that will serve as a guide for PG&E’s
communications development, including channel preferences, program offerings, and
message tone.