Salt River Project: The Persistence of Choice Achieving broad acceptance of time-based pricing. Judith Schwartz, To the Point, 28 June 2012

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1 + Salt River Project: The Persistence of Choice Achieving broad acceptance of time-based pricing Judith Schwartz, To the Point, 28 June 2012

2 + Approach Used in ADS Case Studies 2 Behind-the-scenes perspective Summary of lessons learned by subjects Interviews with key players Reactions of selected stakeholders Narrative style to show thinking behind the decisions Discussion questions throughout to prompt conversation Links to case studies prepared by other groups Available on

3 + Highlights of SRP Case Study 3 Examines time-of-use and prepay Make programs voluntary and easy to switch Some people prefer routine and predictability (TOU) Help people choose the best rate for their family: Simple interactive tools for preliminary research Secure, account-specific rate comparisons Personal exchanges with a customer service rep or trusted advisor Offer prepay to everyone, not just those with credit issues Smart meters will allow SRP to expand range of options building on exemplary trust and customer satisfaction

4 + Customer-Focused Culture 4 Grows from roots in the community SRP earns trust through community involvement and active participation with local organizations Staff listen to stakeholders formally and informally They actively promote pricing and prepay programs at over 40 community events each year Website and social marketing vehicles provide complementary communication channels SRP tries and tests new approaches and programs and listens carefully to customer feedback through research

5 + Price and Prepay Plans Presented as Options Consumers can drill down to learn more 5 As of March 12, about 3,000 unique customer visits per month

6 + Interactive Tool Asks a Series of Questions People choose plan that fits their lifestyle 6 Different answers point consumers in different directions M-Power popular with students, landlords, people paid weekly, snowbirds since mid-1990s 15% on hedged flat rate year round Prepay, no service charge per payment, fewer disconnects Seasonal inclining block rates, much higher in summer, 57% on SRP Basic Offered since 1980s 22% on seasonal TOU 7 hour window (1-8 PM) New and growing program 6% on EZ-3 3 hour window (3-6 PM)

7 + Experiments and Opportunities 7 Findings in SRP Territory Load Cycling was tried in early 1990s AC units turned off for 20 minutes at a time, customer could override Not effective in such a hot climate Research suggests 10% of customers might prefer remote cycling now that new smart technology will allow minor temperature adjustments Residential consumer response was tepid to CPP in trial Common reason given was that a habitual program was easier Prepay consumers like program, rate generates controversy Reasons behind hedging may not be clear to press and advocates When AMI is completed, SRP exploring TOU + prepay options Payment mechanisms can be independent of rates with AMI

8 + 1. Keep Rate Concepts Simple Insights 8 Frame from customers perspectives In exchange for a discount, will your family voluntarily adjust your usage habits on week days? 1 Would you help out 10 times a summer when we risk affecting service at the hottest part of the day? You can pick a no-risk rebate plan or get lower rates all year if you agree to a higher price during heat wave event days. (We ll notify you a day ahead so you can avoid peak charges.) 2 Would you prefer to program your AC, pool pump, or hot water heater settings yourself or allow your utility to make minor temperature adjustments if needed? 3 1 Time of Use 2 Critical Peak Pricing or Rebates 3 Direct Load Control

9 + 2. Reflect Energy Worldviews Portfolio of plans for broad adoption Insights 9 INNOVATORS Tech Enthusiasts Green buildings EARLY ADOPTERS Green Altruists EARLY MAJORITY Cost Conscious LATE MAJORITY LATE ADOPTERS Indifferents Comfort Lovers Doubters Simple feedback interface Price incentives Seamless automation Diffusion of Innovations: Everett Rodgers Crossing the Chasm: Geoffrey Moore Worldview triggers: Judith Schwartz

10 + 3. Interpret Data to Detect Patterns Trends cut across pilots with different emphasis Insights 10 What actions, if any, did you [PowerCentsDC participant] take to reduce electricity use during critical peak periods or during times of high energy prices? Adjusted air conditioner 35% 59% Adjusted the heating system 13% 13% Avoided use of appliances 29% 60% Turned off one or more televisions 29% 29% Total Population Low Income Turned off computers/gaming systems 16% 22% Turned off lights 39% 44% Turned off almost everything 28% 52% emeter Corporation, 2010

11 Insights + 4. Present Program Options as Choices 11 Consider Saver as the default rate Photo Credit: 2012 Marshall Cetlin Explored in IEE White Paper on Smart Meter Costs & Benefits, based on idea from SCE Concept validated by new research from Accenture and SGCC

12 + 5. Keep Safeguards and Add Value At-risk elderly and medically frail Insights 12 If time-based pricing is the right policy for incentives driving broad operational, resource, and cost efficiencies then consider peak rate waivers to protect those living independently on low or modest fixed incomes Reinforce commitment to consumer protections Provide energy audits and weatherization help Consider new supporting services on request Emergency locator in storms Remote family or guardian notifications Priority restoration of service Pattern recognition alerts Photo Credit: 2012 Marshall Cetlin

13 Insights + 6. Accept Varied Levels of Commitment 13 Participation will grow as tools evolve Customer preferences drive program choice: Daily routine or occasional attention? View portals, green button apps, reports? AC in home or not? Share control or not? Want to invest in EV, HEMS, solar, etc.? and best rate Explored in IEE White Paper on Smart Meter Costs & Benefits 1 ON-Average (flat rate with built-in hedge) 2 No-risk rebate (PTR,CPR) 3 Heat wave super-saver (CPP, DLC) 4 Cash-back nights and weekends (TOU) 5 Market price (Hourly)

14 + Insights 7. Respect Privacy and Control Boundaries Make protections clear and obvious 14 Utility makes daily balance visible to customer via preferred method BILLING USAGE Customer keeps real-time detail private on device of choice and decides who sees it Utility sends price signals and agreed upon automation Developed from an idea suggested by PG&E, privacy architecture approved by CPUC PRICE SIGNALS & CONTROLS Customer can choose to adjust controls and take actions

15 15 Judith Schwartz is an entrepreneur, marketing strategist, and communications professional on the forefront of sustainability issues, the Smart Grid, alternative energy, and the digital home. Her Silicon Valley-based firm, To the Point, designs human-centered strategies, conducts research and meta-analysis, creates narratives and messaging, facilitates cross-stakeholder conversations, and develops communications and outreach prototypes

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