A Look at Changing
Utility Pricing Structures
March 23, 2016
Today’s Presenters
Scott WhitmireProject Manager
Southern Company
Dave ElveExecutive Vice President &
Chief Marketing Officer
PayGo
Nathan ShannonDeputy Director
Smart Grid Consumer
Collaborative
Agenda
3
Scott Whitmire, Georgia Power
Question and Answer Session
Dave Elve, PayGo Utilities
Introduction - Realizing the benefits of AMI through dynamic pricing plans
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
Name Background
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
7
• Georgia Power – Other Initiatives
• How did we get here?
• Why PrePay?
• Successes, Opportunities, Lessons Learned
Georgia Power
8
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.
How Did We Get here?
9
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
% of
population52% 17% 13% 7% 6% 5%
% of profit 52% 16% 18% -2% -1% 17%
Payment
historyGreat Poor Very poor Very poor Great Good
Power
usageAverage 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
statusMarried Single Married Single Single Married
Mass Market Homeowners
Everyday Georgia Day to Day
Just Getting Started
Young and Mobile
Established Households
Five themes surfaced while examining pain points across the customer value chain
Customers want a
seamless transfer
service process
Customers want more
products & services
from GPC (energy
efficiency)
Customers want more
information on
outages, usage and
rate plan options
Start, Move, or
Stop Service
My Bill &
Energy Usage
Information
Payment
Options
Outages &
Service
Issues
Additional
Products &
Services
Customers want to
use their preferred
method of payment
Customers want
more flexibility and
ease with payment
options
How Did We Get here?
11
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
Payment
Options
Customers want to
use their preferred
method of payment
Customers want
more flexibility and
ease with payment
options
Why PrePay?
12
Benefits to Customer
• No deposits, No reconnect fees
• Utilize existing deposits
• Pay off past due amount over
time
• Pay any time, pay any amount
• Control!
• Convenience
Benefits to Company
• Charge-off reduction and
collections
• A better option for some
customers (Customer
Satisfaction)
• Regulatory (GPC)
• Return on AMI investment
How Is It Going?
13
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
How Is It Going?
14
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)!
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
PayGo Utilities 2016©
• IVR• CSR
• Web Portal• Mobile• Kiosk• Existing Utility
Payment System• Walk-up cash
Customer
CustomerPayment
Utility Funds by 9am
Bank
Utility CSR
Mesh
Customer Account Updated
CIS
16
ESB
MDMS
AMI Collection EngineSoftware
RF, PLC
Prepay: Meter to CashLeveraging Smart Grid Investment for Customer Engagement
PayGo Utilities 2016©
What is going on in the Industry…
Customers • Background
– 33% of smart phones users have prepaid mobile plans
– 20% customers are underbanked
– 20% of utility customers move annually
• Pay As You Go benefits– No deposits
– No Late Fees
– No Reconnect Fees
– Reduction in usage
• Sample Customer Use Cases
Utility• Higher customer sat scores
• Energy Efficiency (sustainability)– 7.5% - 12.7% reduction in usage
• Operational savings– Write-offs reductions
– Long term call center reductions
17
PayGo Utilities 2016©
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
18
PayGo Utilities 2016©
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
19
Thank you! You will receive a copy of todays slides to the email you
used to register
Nathan ShannonDeputy Director
Smart Grid Consumer
Collaborative
Scott WhitmireProject Manager
Southern Company
Dave ElveExecutive Vice President &
Chief Marketing Officer
PayGo