DIRECT PRE-FILED TESTIMONY OF CUSTOMER SERVICES BUDGET AND OPERATIONS PANEL

Transcription

1 BEFORE THE LONG ISLAND POWER AUTHORITY IN THE MATTER of a Three-Year Rate Plan Case - DIRECT PRE-FILED TESTIMONY OF CUSTOMER SERVICES BUDGET AND OPERATIONS PANEL Date: January 0, 0

2 TABLE OF CONTENTS I. WITNESS QUALIFICATIONS AND DESCRIPTION OF TESTIMONY II. CUSTOMER SERVICES ORGANIZATION A. Introduction and Background B. Revenue Operations C. Customer Contact and Billing D. Customer Experience and Utility Marketing 0 E. Meter Services III. CUSTOMER SERVICES O&M BUDGET - -

3 0 0 I. WITNESS QUALIFICATIONS AND DESCRIPTION OF TESTIMONY Q. Please state the names of the members of this Customer Services O&M Budget Panel (the Panel ). A. Daniel Eichhorn, Suzanne Brienza, Frederick Daum, Jorge Jimenez, Richard Walden and Nicholas Nolau. Q. Mr. Eichhorn, please state your employer and business address. A. I am employed by PSEG LI ( PSEG LI or the Company ) at Park Drive Melville, NY. Q. In what capacity are you employed by PSEG LI? A. I am employed at PSEG LI as the Vice President of Customer Services. Q. Please explain your role and principal responsibilities at PSEG LI. A. I am responsible for customer experience, customer contact, all meter-to-cash functions, electric metering, field operations and utility marketing. In addition, I am responsible for leading the Customer Services organization to meet the Company s commitments to our customers and other stakeholders, including achieving top quartile performance in Customer Satisfaction and Customer Services performance metrics within the first five years of the Amended and Restated Operations Services Agreement between Long Island Lighting Company d/b/a LIPA and PSEG Long Island LLC, dated as of December, 0 (the OSA ). Q. Please describe your educational and business experience. A. Before joining the PSEG LI executive management team in 0, I worked at Public Service Electric and Gas Company ( PSE&G ), the utility subsidiary of Public Service Enterprise Group ( PSEG ) in New Jersey. I worked at PSE&G since - -

4 and held several leadership, management and engineering positions at the company in Customer Services, Electric and Gas. From March 0 through October 0 I was the Director LIPA Transition Customer Services. I was responsible for leading all aspects of the transition for Customer Services from National Grid to PSEG LI. The Customer Services 0 0 organization completed all major Customer Services milestones during the Long Island Power Authority ( LIPA ) transition and began serving the Long Island and Rockaway customer base on January, 0. Prior to my role as the Customer Services transition lead, I was Director - Customer Contact & Technology at PSE&G from 00 0, where I was responsible for an organization consisting of employees. In this role, I provided leadership, strategic direction, and oversight for Call Center, Walk-In Customer Offices, Inbound Collections, Construction Inquiry and Customer Technology groups. The organization obtained break through results in Call Center operations and contributed to PSE&G s top quartile JD Power ranking. Prior to my role as the Director of Customer Contact & Technology, I was the Director ipower (SAP CCS Implementation) at PSE&G from In this role, I was responsible for implementation of a new SAP Customer Information System. I led a team of approximately internal associates and external resources from the Utility Business Units, Information Technology, and the System Integrator to replace the existing IBM mainframe system with SAP CCS. My project responsibility including the implementation of a new Integrated Voice Response - -

5 0 0 ( IVR ) unit, Business Warehouse, Gas Appliance Work Management and Dispatch ( SAP MRS & MAM/MAU ), Electric Meter Technician and Field Collectors Mobile Data Terminals and Work Management Systems. The implementation was awarded the Best CIS Implementation Award for Large Company from industry group CSWeek (a total of utilities submitted for consideration). My other significant utility experience includes leadership, management and engineering roles at PSE&G in the electric and gas operations business units. I hold a Bachelor of Science Degree in Electrical Engineering and a Masters of Business Administration in Finance from Drexel University. I am a Licensed Professional Engineer (PE) in the state of New Jersey. I am actively involved with several utility industry groups, including Chartwell, CSWeek and JD Power. Q. Ms. Brienza, please state your employer and business address. A. I am employed by PSEG LI at Park Drive, Melville, NY. Q. In what capacity are you employed by PSEG LI? A. I am employed at PSEG LI as the Director of Revenue Operations in the Customer Services organization. Q. Please explain your role and principal responsibilities at PSEG LI. A. I was named Director of Revenue Operations at PSEG LI in September 0. At PSEG LI, I am responsible for utility payment processing, credit and collections, and revenue protection. In addition, I am responsible for providing cross functional support and process improvement within Customer Services and lead the Customer Services storm response enhancement effort through the Operations Support group. - -

6 0 0 Furthermore, I am accountable for the implementation and review of Customer Services Sarbanes Oxley ( SOX ) controls and achieving best-in-class customer contact service level through Customer Offices. Q. Please describe your educational and business experience. A. Prior to joining PSEG LI in 0, I held the position of Manager of LI Credit and Collections at National Grid from February 0 - September 0 and Senior Corporate Supervisor, LI Credit & Collections from January 00 February 0. As the Manager of LI Credit and Collections, I was responsible for the management and supervision of the Long Island Credit and Collections for National Grid, the implementation of various strategies to achieve all metrics under the Management Services Agreement between LIPA and National Grid ( MSA ), the minimization of bad debt and days sales outstanding through the implementation of strategic initiatives and the development of interdepartmental relationships and improvement of outside connections with governmental agencies, law firms and business leaders. Prior to joining National Grid I was a practicing attorney. I worked as an attorney in the areas of Collections, Real Estate/Banking, Mediation, Criminal Defense, Matrimonial/Family Law, Personal Injury/Medical Malpractice, and Bankruptcy. I hold a B.A. in English from Hofstra University and a J.D. from Touro College, Jacob D. Fuchsberg Law Center. I am a member of the New York State Bar Association and am on the board of directors at the Family Service League in Huntington. - -

7 0 0 Q. Mr. Daum, please state your employer and business address. A. I am employed by PSEG LI at Park Drive, Melville, NY. Q. In what capacity are you employed by PSEG LI? A. I am employed at PSEG LI as the Director of Customer Contact and Billing in the Customer Services organization. Q. Please explain your role and principal responsibilities at PSEG LI. A. I have been employed in my current position since September of 0. I am responsible for overall customer satisfaction, operational, financial and internal controls for Call Center, Workforce Management, Back Office Billing, and Billing System / Print performance for PSEG LI. I also develop and oversee O&M and capital budgets for Customer Contact and Billing and assure adherence to the plan, balancing cost containment with customer satisfaction, operational excellence, employee satisfaction and the overall business objectives. I work closely with the Electric Transmission and Distribution ( T&D ), Systems Management, and Information Technology ( IT ) groups to define, develop and implement technology improvements that improve the customer experience as well as communications during major events. Q. Please summarize your professional experience and educational background. A. From 00 to 0, I was Process Integration Manager Customer Contact- PSE&G, Cranford, New Jersey. In this position I was responsible for forecasting, staffing, training, quality assurance and operational management to meet service levels, efficiency and financial targets for Inquiry and Inbound Collections. I provided - -

8 0 0 leadership and support to the Customer Contact management team by optimizing reporting and performance management processes to best align with business goals and insuring that those processes are performed at a high level. In this position I implemented the use of a third-party call center and at-home collection representatives which reduced the cost per contact year over year for both inquiry and inbound collections. From 00 to 00 I was Operations Manager Meter Reading and Collections - PSE&G, Audubon and Trenton, New Jersey where I was responsible for the supervision of seven management associates and up to 0 union employees within the East Gate and Trenton Districts for PSE&G s Customer Operations Business Unit. From 00 to 00, I was Senior Service Supervisor- PSE&G, Gas and Appliance Department, Audubon, New Jersey and was responsible for the supervision and operations of the Audubon Gas Service Department which is composed of bargaining unit service technicians and three management supervisors. From 00 to 00, I was Service Supervisor PSE&G, Gas and Appliance Service Department, Trenton, New Jersey, where I supervised group of service technicians within the Trenton District. I have an MBA from the Erivan K. Haub School of Business of St. Joseph s University and a BA in Business and Management Information Systems from Fairleigh Dickinson University, where I was a member of the Phi Omega Epsilon Honor Society. I have been an Adjunct Professor- Fairleigh Dickinson University and Corporate College Services and have taken courses in Interest Based Bargaining - -

9 0 0 from the Rutgers School of Labor Relations, MARC Industrial Relations Training and NCCE Financial Training. Q. Mr. Jimenez, please state your employer and business address. A. I am employed by PSEG LI at Park Drive, Melville, NY. Q. In what capacity are you employed by PSEG LI? A. I am employed at PSEG LI as the Director of Customer Experience and Utility Marketing in the Customer Services organization. Q. Please explain your role and principal responsibilities at PSEG LI. A. I was named Director of Customer Experience and Utility Marketing at PSEG LI in September 0. In this role, my primary focus is to lead the Company s customer satisfaction improvement program, with an ultimate objective of transforming PSEG LI into a first quartile J.D. Power electric utility. My other responsibilities at PSEG LI include utility marketing and sales for retail system expansion, retail customer retention, and customer care and service programs, including all aspects of marketing planning and implementation activities, promotion and communications, market research and major account relationships. In addition, I am responsible for achieving a high level of customer satisfaction, including: determining the approach and methodology for measuring, monitoring, and optimizing customer satisfaction; monitoring customer satisfaction results; and overseeing the performance of perception-based and transactional-based customer satisfaction surveys. Furthermore, I am responsible for maintaining and - -

10 0 0 overseeing the "MyAccount" portion of PSEG LI s Web Site and other electronic and social media customer facing platforms. Q. Please describe your educational and business experience. A. Prior to joining PSEG LI in 0, I held various senior leadership positions at Florida Power and Light Company. During my tenure at Florida Power and Light, I held the following positions: Program Manager, Smart Grid Initiatives, Customer Service Business Unit (00 September 0), PMO Manager, Smart Grid Initiatives, Customer Service Business Unit (00 00), Program Manager, Storm Secure Initiative, Distribution Business Unit (00 00) and Senior IT Project Manager, Information Technology Business Unit (00 00). In my two roles on the Smart Grid Project as Program Manager Unit and PMO Manager at Florida Power and Light, I was responsible for the on-time, in scope, and on budget delivery of the Smart Grid portfolio which consisted of to 0 projects running concurrently with an overall program portfolio budget in excess of $00 million. I was also involved in the planning, design, construction, and implementation of all project deliverables for the remote connect and disconnect benefits of the smart meter program. This additional program delivered a $00 million net present value and had cross departmental impacts on processes and systems in the Customer Service, Distribution, Regulatory, Legal, External Affairs, and Marketing & Communications business units. Prior to my role in Florida Power and Light s Smart Grid project, I worked in the Electric Distribution Business Unit where I was responsible for organizing and - -

11 0 0 leading work stream teams to develop project plans, activity scope, roles and responsibilities, schedule, budget, assumptions, issues, risks, change management, quality, and communications for the multi-year distribution grid infrastructure hardening program at Florida Power and Light known as Storm Secure. Prior to my role in Florida Power and Light s Storm Secure initiative, I worked in the Information Technology Business Unit as a Senior IT Project Manager where I directed a team of IT professionals responsible for defining, designing, and delivering technology solutions to internal clients in the Customer Service Call Centers, Customer Service Field Operations, and Emergency Response business units. Before I joined the utility industry, I held various senior leadership roles in project management and information technology capacity at WebMD, Precision Response Corporation ( PRC ), London Bridge Software and Electronic Data Systems ( EDS ), where my responsibilities included client portfolio management, sales support, and operations management. I hold a B.S. in Economics and an MBA with a concentration in Finance and Marketing from the University of Florida. I am an EDS Certified Systems Engineer, a Six Sigma Green Belt, and a PMI Certified Project Management Professional ( PMP ). Q. Mr. Walden, please state your employer and business address. A. I am employed by PSEG LI at Park Drive, Melville, NY. - -

12 0 0 Q. In what capacity are you employed by PSEG LI? A. I am employed at PSEG LI as the Director of Meter Services in the Customer Services organization. Q. Please explain your role and principal responsibilities at PSEG LI. A. I was named Director of Meter Services at PSEG LI in September 0. At PSEG LI, I am responsible for commercial and residential meter reads, move-in/move-out service orders in support of billing operations, execution of field collection and field services activities, field operations dispatch, installation, maintenance and replacement of electric revenue metering equipment, meter engineering, support of meter systems and technology, load research and retail settlement functions and implementation of long term metering strategy. Q. Please describe your educational and business experience. A. I was named to my current position at PSEG LI in September 0 and am responsible for commercial and residential meter reads, move-in/move-out service orders in support of billing operations, execution of field collection and field services activities, field operations dispatch, installation, maintenance and replacement of electric revenue metering equipment, meter engineering, support of meter systems and technology, load research and retail settlement functions and implementation of long term metering strategy. Prior to joining PSEG LI, I was Senior Vice President Utilities Business and Utility Sales Executive at Tendril Networks from March 0 to September 0, responsible for all aspects of sales and delivery of Tendril solutions to utilities including IOUs, rural electric cooperatives and municipalities in - 0 -

13 0 0 North America. From June 00 to March 0, I was VP Utility Services at Constellation Energy Group, where I led a load response sales effort aimed at helping IOUs, municipals, and cooperatives address regulatory and legislative mandates; control wholesale power supply costs; improve reliability; reduce capital expenditures; and enable retail customers to manage energy more effectively while participating in RTO and/or utility-sponsored load response programs. From 000 to May 00, I held various leadership roles at Dominion Resources, Inc. which included: Director Advanced Metering Infrastructure (00 May 00), Director Delivery Metering Services (00 00), Director Business Performance (00) and Director Electric Metering (000 00). As the Director of Advanced Metering Infrastructure ( AMI ), I was the AMI program director for that company s electric delivery business where I developed the program to support the next evolution in metering and customer service and provided overall direction and leadership for the implementation and operation of AMI technology, including the automatic collection and processing of energy data for markets, customers, and company operations. My other significant experience includes leadership positions for over years with Baltimore Gas & Electric Company, as well as manufacturing positions in the consumer products industry. I hold a B.S. in Chemical Engineering from the University of Maryland, an MBA from Loyola College and I have completed the Executive Program at the University of Michigan Business School. - -

14 0 0 Q. Mr. Nolau, please state your employer and business address. A. I am employed by PSEG LI at Park Drive, Melville, NY. Q. In what capacity are you employed by PSEG LI? A. I am employed at PSEG LI as the Business Performance Lead in the Customer Services organization. Q. Please explain your role and principal responsibilities at PSEG LI. A. I was named Business Performance Lead in the Operations Support organization in Customer Services in January of 0. In this position, I am responsible for the management of the Customer Services O&M and capital budgets and the direct interface between the line of business and finance organization. I interface with the Utility Financial Planning organization regarding financial reporting/analysis and cost/operating plan development for Customer Services. I also direct identification of opportunities for performance improvement through benchmarking, best practices identification, efficiency assessment, gap analysis and service level agreements. In my role, I lead the development of business cases and cost/benefit analysis, as well as business/operating plan, and act as a key contributor to the strategy development, financial planning and business planning processes for the Customer Services organization. I support the Customer Services Senior Leadership team on all strategic initiatives and financial planning activities. Q. Please describe your educational and business experience. A. Prior to my current role at PSEG LI, I held the position of Business Support Specialist LIPA Transition Customer Services team for PSEG. In this role, I provided the - -

15 0 0 lead analytical support for the Customer Services transition team during the two-year transition of service provider from National Grid to PSEG LI. I was responsible for the development, maintenance and reporting of the 0 and 0 Customer Services transition budgets and the development of the 0 PSEG LI Customer Services O&M and capital budgets. I developed and managed the Customer Services transition project plan. I participated in several critical transition team projects to review cost/benefit analysis of critical business functions and critical business infrastructure. Prior to my role on the transition team, I held the position of Business Support Specialist Business Solutions and Vice President- Support Organization at PSE&G in New Jersey. In this role, I was responsible for supporting the senior leadership team in various capacities including ad hoc analytical requests, benchmarking, process improvement initiatives and special business projects. I hold a B.S. in Business Administration with a concentration in Finance from Montclair State University. I have a Lean Six Sigma/DMAIC Process Green Belt certification and have completed a Utility Finance and Accounting training program. Q. What is the purpose of your testimony? A. The purpose of our testimony is two-fold. First, we will explain the steps that PSEG LI has taken to recast and reorganize the Customer Services function of LIPA in order to prepare to meet the increasing Customer Services goals established under the OSA. As mentioned, it is our intention to see that Long Island consumers are provided with a best in class Customer Services organization and experience and our testimony - -

16 describes the organization that we are building to meet that goal. Second, we will explain and support the budgets necessary to meet the goals of the OSA and to provide our customers with improved service. II. CUSTOMER SERVICES ORGANIZATION 0 0 A. Introduction and Background Q. Mr. Eichhorn, please provide background on the budgetary and operational objectives of the Customer Services organization. A. The Customer Services organization and the budgets that support it are intended to achieve several main objectives: provide tariff-related services, establish appropriate meter to cash controls, and achieve the OSA metrics, which measure the service provided by PSEG LI. Customer Services contributes to these metrics in the areas of Customer Satisfaction, Customer Services Key Performance Indicators ( KPI ), Storm Response and Budget Compliance. Customer Satisfaction is primarily measured via JD Power Surveys for both Residential and Business customers, which contain measures in the following areas: Power Quality and Reliability; Price, Billing and Payment; Corporate Citizenship; Communications; and Customer Services. Customer Services OSA contractual metrics include After Call Surveys, Personal Contact Surveys, Average Speed of Answer, Abandonment Rate, Actual Meter Read Rate, Timely Billing, Days Sales Outstanding, Net Write Off Per $00 Revenue, and Web Transactions Completed. All the aforementioned metrics listed are considered improvement metrics with the exception of Net Write Off per $00 Revenue, meaning that st quartile results need to be achieved at the end of five years - -

17 0 0 as per the OSA. Net Write Off is currently a maintenance metric as it was in the top quartile benchmark in 0. Storm Response metrics that the Customer Services organization is responsible for are measured via the New York Department of Public Service ( DPS ) Storm Scorecard, which evaluates storm preparation, operational response and communications. The Customer Services storm response organization is directly involved in the preparation and communications sections within the DPS Storm Scorecard. A more detailed explanation of our storm response effort is provided by the Storm Response Panel. Q. Why is there a focus on achieving the metrics? A. There had been a widespread perception among customers, elected officials and stakeholders that customer service needed to improve. For example, LIPA under the MSA contract with the National Grid had generally ranked in the fourth quartile in JD Power customer satisfaction, and the 0 JD Power Residential and Business Customer Satisfaction Surveys ranked LIPA in the fourth quartile of performance in all categories. In no category was LIPA s performance better than third quartile in 0. The metrics in the OSA were designed to produce measurable performance improvement in customer service and, as I mentioned above, the Customer Services organization and the budgets that support it are intended explicitly to produce the achievement of improved customer service as measured by the OSA metrics. - -

18 0 0 Q. Did PSEG LI simply take over the Customer Services Program being provided previously? A. Not at all. PSEG LI assumed operation of the LIPA system on January, 0, taking over that function from National Grid. Because National Grid s customer service function had served both LIPA electric and National Grid gas operations, many areas of customer services, such as the call center, meter reading, collections and the like were split, with some employees coming with PSEG LI and others staying with National Grid. Consequently, we were required to hire additional employees to fill vacated positions as well as to build the organization necessary to improve customer service and achieve the metrics under the OSA. Although this presented challenges, it also presented us with an opportunity to evaluate all aspects of the customer services function with a view toward making systematic improvements. Q. What did that process entail? A. We previously discussed the fact that the metrics provide a measure of whether we are providing excellent customer service. During the transition period before we assumed operations of the LIPA system, the Customer Services transition team analyzed all elements of the Customer Services function with the goal of improving service and achieving the OSA targets. We staffed and structured our organization based on keeping the best practices that already existed and adopting the best practices from our New Jersey utility organization, which is rated in the top quartile in customer satisfaction in the East Large region of JD Power. We also utilized - -

19 0 industry benchmark data to make sure that we would be in the top quartile on an employee per million customers served. Q. How many people are employed in the Customer Services organization? A. The Customer Services organization has full time employees ( FTEs ) in the base budget for 0. As explained in this testimony, modest increases are forecasted for headcount to FTEs in 0, FTEs in 0 and 0 FTEs in 0. PSEG LI s Customer Services headcount is within an industry top quartile benchmark range of 0- employees/million customers through 0 and will rise only slightly above that range in 0. Consequently, we believe that we have the right amount of employees necessary to achieve the top quartile results that are expected of us. Q. Do you have further justification that your organization is right sized to properly support the Long Island and Rockaways customer base? A. Yes. During the transition year, a study was completed that benchmarked other utility companies on a cost per customer basis. PSEG LI s Customer Services 0 organization cost per customer in 0 was $.0 above the industry s top quartile but $0. below the industry median. There are several contributing factors that separate PSEG LI from the top quartile companies which include: Companies with AMI have reduced their O&M expenses by an average of $- per customer by the automation of the meter reading process and other downstream processes. A large majority of the companies within the top quartile have made significant investments in AMI while PSEG LI currently only has a pilot project with a limited number of customers. PSEG LI has lost synergies that previously existed under LIPA s MSA contract with National Grid by serving both electric and gas customers. Combination electric and gas utilities see synergy savings of 0-0% by servicing dual commodity customers. - -

20 0 0 Despite these headwinds that should have produced higher levels of customer service-related costs, PSEG LI remains only slightly above the best, top quartile companies on a cost per customer level and significantly below the median level for customer service costs in the industry. Q. Mr. Eichhorn, please describe the challenges your line of business faces regarding the achievement of future performance metrics. A. PSEG LI Customer Services faces many challenges in achieving the OSA targets. For one, our OSA metrics have been benchmarked to st quartile performance by the end of the fifth year of the contract. This will continue to stretch the business to find ways to meet these targets, all while maintaining essentially a steady labor force in terms of overall employee numbers. In our testimony, we will discuss how Customer Services has been organized and what steps we have taken to address the customer service problems of the past. Q. What are the responsibilities of the Customer Services organization? A. Under the OSA, in addition to providing all aspects of customer services, PSEG LI is responsible for: achieving a high level of customer satisfaction, including: determining the approach and methodology for measuring, monitoring, and optimizing customer satisfaction; monitoring customer satisfaction results; overseeing the performance of perception based and transactional-based customer satisfaction surveys for other service providers; interpreting and communicating the results of customer surveys; coordinating initiatives aimed at improving the product portfolio, service delivery mechanisms, and overall customer satisfaction across the full spectrum of services provided, such as system operations and electronic transaction and self-help options, customer interactions and back-office functions. OSA Section.(A)()(a). - -

21 Consequently, we are required not only to provide all customers with services attendant to a large electric service provider, but to track them and monitor them, improve them and insure overall customer satisfaction across the full spectrum of services provided. This testimony will describe the Customer Services 0 departments that are engaged in this task and their initiatives and programs designed to produce the high levels of customer satisfaction demanded of them. Q. Have you reviewed the management audit completed by NorthStar on the previous service provider that provided recommendations for improvement to customer services? A. Yes we have seen the findings and recommendations in the NorthStar Audit and have incorporated the recommendations into Customer Services change initiative plan where deemed applicable. There were Customer Services dedicated recommendations from the audit. The Customer Services organization has completed of the recommendations through 0. The two outstanding recommendations are to review customer rate class assignments and replacement of the Customer Accounting System ( CAS ). The customer rate class assignments recommendation is currently being reviewed in a Lean Six Sigma project being led by PSEG LI. Initial planning for replacement of the CAS system will take place during the Rate Plan period of 0-0 and is anticipated to be implemented thereafter. - -

22 0 0 Q. Please describe PSEG LI s Customer Services significant achievements in 0. A. PSEG LI has made tremendous strides in the first year of the OSA. PSEG LI has honored our commitment to our customers to provide a noticeable improvement in customer services within the first year of operations. Below are some of the highlights that outline PSEG LI s significant achievements in 0: JD Power Surveys: o Residential Survey PSEG LI is currently the most improved utility brand in the residential survey through the first two waves or midpoint of the 0 syndicated residential survey. PSEG LI has improved points over last year s midpoint results. o Business Survey PSEG LI was the named most improved utility brand in the 0 survey by JD Power and Associates (two waves fielded in 0). PSEG LI improved 0 points in the survey from a baseline of to a 0 YE result of. OSA Metrics: o PSEG LI has achieved the targeted results of 0 of the targets as outlined by the OSA. The Customer Services organization achieved all operational metrics in the OSA with most achieving a three-year trajectory to first quartile performance. Implementation of a new Outage Management System, providing: o improved accuracy in identifying where outages have occurred, o quick and accurate estimates of when service will be restored, and o better ability to communicate restoration progress. Implementation of a new Emergency Response Escalation Tracker to enhance emergency liaison with municipalities

23 0 Implementation of a new IVR system and a launch of a new state-of-the-art telephone system to end long wait times. Opening of two new Customer Service Centers in Seaford and Arverne. Implementation of award-winning energy efficiency programs in its first year, PSEG LI customers saved enough energy to equal the benefit of eliminating the emissions of more than 0,000 cars. Installation of Long Island s 0,000th rooftop solar PV system, with an expectation to hit,000 in 0. Q. Are you sponsoring any exhibits as part of your testimony? A. Yes. The Panel is sponsoring Exhibit (CSP-) which was prepared under our direction and supervision. B. Revenue Operations Q. Please describe the Revenue Operations organization? A. The Revenue Operations organization consists of six major groups: Back Office Collections, Payment Processing, Revenue Integrity, SOX and Revenue Reporting, Customer Offices, and Operations Support. The overall objective of the Revenue Operations organization is to support the achievement of OSA metrics for Customer Satisfaction, Customer Services KPI s, and Storm Response. The Revenue 0 Operations organization is also jointly responsible for several aspects of the JD Power Residential and Business survey scores. Q. Does the Revenue Operations organization have responsibility for storm response as well? A. Yes. The Revenue Operations organization s responsibility for Storm Response is explicitly laid out in the DPS Storm Scorecard. The organization is responsible for storm preparation, assuring the effective communication with Life Support - -

24 0 0 0 Equipment and Special Needs customers, maintaining / coverage for the Municipal and Escalation Hotline, as well as planning for the needs of affected communities and opening Community Outreach centers, and DPS storm metrics reporting. A further discussion of the organization s role is provided in the Storm Response Panel s testimony. Q. Please describe this organization s work activities. A. The Revenue Operations organization s six major groups do the following: Back Office Collections is responsible for the overall collections strategy and process for PSEG LI. This group interfaces with many others across the organization, including Revenue Integrity and Payment Processing to assist in collection related activity. Payment Processing is responsible for the timely and accurate processing of customer payments, approximately $. billion of revenue on behalf of LIPA. Revenue Integrity -is responsible for the identification, prevention, and correction of metering conditions causing potential lost revenue for LIPA. SOX and Revenue Reporting is responsible for the improvement of service level standards and operational efficiencies. The work activities for this group include the review of all existing controls and implementation of new controls for PSEG LI Customer Services. Customer Offices is responsible for providing our customers with the ability to transact different types of business face-to-face. For instance, some of these transactions with customers include the handling of customer payments and answering general inquiries. Operations Support is responsible for providing operational analysis, budgeting, and senior leadership support across Customer Services. Q. Please describe how your organization is working to improve and meet the standards of OSA. A. The Revenue Operations organization has implemented a number of changes and performance initiatives to help drive improvement and meet standards within the - -

25 0 applicable areas of the OSA, comprising customer satisfaction, key performance indicators and storm response. The Revenue Operations organization embarked on an initiative to assess best practices and strategies to reduce Days Sales Outstanding ( DSO ) and Net Write Off per $00 Billed Revenue, improve JD Power Residential and JD Power Business surveys, and improve service levels. The strategy called for the assessment and review of outbound collections and the implementation of new application platforms to allow for functional reporting to gauge the effectiveness of call campaigns. This new strategy, coupled with the implementation of applications with supplementary capabilities, enables our organization to better analyze and track our outbound collections activity in order to optimize our processes and lower our DSO and Net Write Off metrics. In addition, this initiative paved the way to begin the implementation to accept credit cards as a payment option, creating an alternate payment channel for our customers. Furthermore, the organization continues to leverage outside agencies to assist and escalate our collection activity. The Customer Offices organization has added two new locations within the service territory. The two new Customer Offices include Seaford and the Rockaways offices. The Seaford office was to replace the recently closed Bellmore office. The Rockaways office is a new, th Customer Office that was delayed because of 0 Superstorm Sandy. The Seaford and Far Rockaway centers feature a new lobby design and teller system that will streamline the customer s experience. Media enhancements, through the placement of televisions in customer office waiting areas, - -

26 0 0 stream energy efficiency programs, storm restoration, and other marketing promotions. In addition to opening those new offices, we redesigned our Hicksville location, allowing the business to shave % off the average wait time for our customers. Staffing augmentation and adjustments have also allowed PSEG LI to reduce overtime spending and increase availability. Specific initiatives include temporary staffing redistribution to cover long-term sick leave and vacancies and the reduction of vacation allotments during holiday weeks. We have also made a concerted effort to increase monitoring of interactions and performance. Surveys are now conducted in-person in each of the Customer Office locations. This provides supervisors and management personnel the ability to make immediate improvements and give instantaneous feedback to the representatives. Moreover, the group has increased management presence in Customer Office lobbies as a means to monitor employees as well as increase productivity. Q. Does the Customer Services business unit provide assistance to Low Income customers? A. Yes. The Customer Services business unit in the Back Office Collections group has four dedicated FTEs to support Low Income customer programs that provide customers with utility bill assistance and relief. This organization provides support to the following programs: Household Assistance Rate Program ( HAR ), Residential Energy Affordability Partnership Program ( REAP ), Balanced Billing, Project Warmth, -- Long Island, Emergency Assistance ( LDSS ), LIHEAP, Consumer Advocates, and the Advocacy Information and Referral Line. This group - -

27 0 0 also works with additional external organizations to seek partnership opportunities to secure more comprehensive outcomes in terms of customer support. Q. Is Revenue Operations responsible for the attainment of certain metrics? A. Yes. Q. What are those metrics and are they being satisfied? A. A detailed discussion of the metrics and PSEG LI s current performance with respect to the metrics is found in the testimony of the Metrics and Safety Panel. Regarding Customer Services KPI s, the Revenue Operations organization is responsible for the performance of the following OSA metrics, and is currently meeting or exceeding performance in all: Days Sales Outstanding PSEG LI s target for this metric in 0 was. days. The baseline performance of this target was. days. PSEG LI achieved the targeted performance level with a YE performance of. days. This resulted in an improvement of. days over the baseline performance in 0. Net Write Off Per $00 Revenue This is a maintenance metric for PSEG LI. Since this is a maintenance metric, PSEG LI needs to keep Net Write Off per $00 Revenue under.00 to not be penalized and under 0. to achieve performance points. PSEG LI achieved the targeted results of Net Write Off Per $00 Revenue and the YE performance for this metric was 0.. Personal Contact Survey PSEG LI s target for this metric in 0 was.%. PSEG LI achieved the targeted results with a YE performance of 0.%. This is a percentage point increase over the baseline performance in 0. C. Customer Contact and Billing Q. Please describe the activities of the Customer Contact and Billing organization. A. The Customer Contact and Billing organization s five major groups, perform the following activities: - -

28 0 0 0 Back Office Billing This group manages bill exception processing, offline billing and special billing. Furthermore, the Back Office Billing group completes and responds to written correspondence from customers and handles the process for updating our Customer Accounting System as needed. Finally, this group assists the call center on the phones during periods of high call volumes and during large outages or emergency events. Third-Party Billing and Bill Presentment This group is responsible for the day-to-day bill presentment operations, inclusive of data entry, testing and verification, management of multiple key processes, including printing and postage, and bill messages and inserts. In addition, this group is responsible for the maintenance of the Billing Rate Structure in the CAS to insure accurate customer billing via implementation and testing. The group works closely with Information Systems to implement monthly, seasonal, semiannual, and annual rate changes and modifications as needed. Billing Projects and Systems and Long Island Choice This group is responsible for the management of the Long Island Choice Programs, which includes the Electric Retail Choice as well as Green Choice programs. In addition, this group works on business continuity planning, specific storm enhancement initiatives for the organization, and oversees major change initiatives. Call Center Operations This group is responsible for all calls related to electric service and customer issues for the entire customer base, approximately. million customers. The call center takes emergency and outage calls / and billing calls from :00 A.M. to :00 P.M. Monday through Friday. The types of calls this group handles include billing, payments, collections, service initiation, outages and general customer inquiries. Workforce Management, Planning and Forecasting This group is responsible for the scheduling of Call Center Operations and Back Office Billing. In addition, this group is responsible for critical technology that enables our workforce to perform their job duties. Moreover, this group is responsible for the tracking of key performance indicators and reporting for Call Center Operations, inclusive of Average Speed of Answer ( ASA ), Abandonment Rate, and employee performance scorecards. Q. Please describe how the Customer Contact and Billing organization is working to meet and improve the performance standards of the OSA. A. A number of customer service deficiencies had been identified under the MSA that required remediation. For example, the ASA target was substantially below industry - -

29 0 0 standards and many processes were deemed inadequate. The Customer Contact and Billing organization has implemented changes and performance initiatives to better serve our customers and meet standards under the OSA. In order to achieve these goals, the organization has undertaken several significant initiatives aimed at improving the customer experience and to create a culture of quality for phone calls handled by our customer service representatives. Q. Please describe a few of these initiatives that have been undertaken by PSEG LI. A. We have undertaken several significant steps to improve our performance and enhance our customers experience: Upon the commencement of operations, PSEG LI noticed a heavy emphasis had been placed on the representatives average time to handle a call. Representatives had been encouraged in the event that they believed a call may run longer than 0 seconds, to tell the customer that they will receive a call back to address their issue. Also, average handle time was a component of the customer service representatives appraisal criterion that was used to determine if the customer service representative qualified to gain share payout. Because of the negative incentives it created, the call center representative appraisal criterion was modified to replace average handle time with representative Post Call Survey results as a qualifying performance criterion in the gain share program. This reinforced the commitment to call quality over call handle time. This resulted in a % reduction of escalated call backs through September 0 when compared to the same period in 0. Our customer service representatives have responded very positively to the - -

30 0 0 changes that we implemented. The customers post call survey results have been extremely favorable, with monthly results in the high 0 to low 0 percent range with over a five percent customer participation rate. It is worth noting that through October 0, the average handle time is 0 seconds, which compares favorably to the 0 level of seconds, demonstrating that our representatives are now resolving customers problems in the same time it previously took to defer them. Further, we recognized the need to augment the organizational structure to better incorporate the culture and vision of the Company. The organization increased our lead groups through the addition of six team leads. This change has provided greater coaching and feedback opportunities for the customer service representatives and has resulted in greater customer satisfaction, as seen through our performance levels in JD Power Customer Satisfaction surveys and After-Call surveys. In addition to call backs, the team leads participate in the call quality process and perform two evaluations on each customer service representative team member each month. This approach improves the call quality process and supports the overall initiative of improving the customers experience on the phone. We have also implemented enhanced reporting that support our operational excellence methodology. One of the first major reporting changes was to establish a daily call center performance report. This report consists of major call center metrics that directly impact the OSA performance. This report provides critical tracking and trending information about the daily staffing and work management decisions of the call center. The report includes call volume metrics for the customer service - -

31 0 0 representatives, IVR, and High Volume Call Applications. Furthermore, and most critically, it provides the daily, monthly, and year to date performance of the OSA Abandonment Rate and Average Speed of Answer metrics. This report is ed each day to the entire customer services management organization so that necessary adjustments to customer service can be made in a timely manner. We have also implemented Post Call Survey reporting to track the performance of the call center on a daily basis. This reporting provides the survey results on daily, weekly, monthly and a year-to-date basis. The above allows the organization to quickly identify weekly trending. Further, we have an Employee Level Scorecard that provides each individual customer service and billing representative and supervisor their statistical performance. The metrics on the scorecards are the same metric and performance criteria that are on the employees year end appraisals. This information is reviewed weekly to provide timely feedback to both the employee and supervisor, ultimately allowing for corrections and coaching opportunities. A particularly important, change was made in March 0, when we decided to bring 0 At-Home Back Office Billing representatives physically to the call center to take customer calls on Mondays. This had a significant, positive effect on Monday key performance indicators. Previously, the Average Speed of Answer on Monday was an unacceptable seconds and the Abandonment Rate was.%. These metrics would trend down Monday to Friday as call volumes decreased, resulting in varied customer wait times during the week. Following our implementation of this - -

32 0 0 change and through the July reporting period, the Average Speed of Answer was reduced to only. seconds for Monday with an Abandonment Rate on average of less than %. Q. Please describe the KPIs and the performance under them. A. Regarding Customer Services KPI s, the Customer Contact and Billing organization is responsible for the performance of the following OSA metrics: Average Speed of Answer PSEG LI s target for this metric in 0 was seconds. The baseline performance of this target was seconds. PSEG LI achieved the targeted performance level with a YE performance of seconds. This resulted in an improvement of seconds over the baseline performance in 0. Abandonment Rate PSEG LI s target for this metric in 0 was.%. The baseline performance of this target was.%. PSEG LI achieved the targeted performance level with a YE performance of.%. This resulted in an improvement of. percentage points over the baseline performance in 0. After Call Surveys PSEG LI s target for this metric in 0 for the residential and business surveys was.0% and.%, respectively. The performance level as of the end of 0 for After Call Survey Residential was.% customers satisfied. The performance level as of the end of 0 for After Call Survey Business was.% customers satisfied. Both surveys showed significant improvement over their baselines. Timely Billing PSEG LI s target for this metric for 0 is.%. The performance level as of the end of 0 was.% of billing exceptions completed within the prescribed time period. 0 D. Customer Experience and Utility Marketing Q. Please describe the Customer Experience and Utility Marketing organization. A. The Customer Experience and Utility Marketing organization consists of four major groups: Account Management and Economic Development; Utility Marketing; Customer Experience; and Systems and Change Implementation