INTRODUCTION AND SUMMARY OF O&M COSTS
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1 EB-00-0 Exhibit F Tab Schedule Page of CUSTOMER SERVICES INTRODUCTION AND SUMMARY OF O&M COSTS The Customer Services division performs activities that are required to provide services to customers connected to THESL s distribution system. These activities serve customers receiving electricity under the Regulated Price Plan, spot market prices, retailer contracts, Time-of-Use pricing, and the net metering and standard offer programs. THESL s service levels meet or exceed requirements stipulated in the OEB s 00 Electricity Distribution Rate Handbook, issued May, Approximately,000 customers were connected to the THESL distribution system as of December 00. A recently launched initiative to convert bulk-metered buildings to individual-metering, coupled with the typical customer growth rate, is expected to add approximately,000 customers by year-end Most customers fall into the residential rate classification. Commercial rate classifications include: General Service, for customers that have peak monthly demands of less than 0 kw General Service, for customers that have peak monthly demands greater than 0kW but less than 000 kw General Service, for customers that have peak monthly demands greater than 000 kw but less than 000 kw Large User, for customers that have peak monthly demands greater than 000kW Customer Services is comprised of three main operating areas: Meter-to-Cash, Customer Relationship Management and Field Services. Meter-to-Cash ensures that meters are safely and correctly installed, meter readings are accurately recorded and processed either
2 EB-00-0 Exhibit F Tab Schedule Page of manually or through an Advanced Metering Infrastructure ( AMI ) for billing, and accounts are billed and collected in a timely manner. This group also manages day-today retailer issues, including dealing with all information related to daily transfers and billing transactions through the HUB and retail settlement. 0 The Customer Relationship Management team includes the Call Centre, a customer concern escalation group and the Key Accounts team. The Call Centre responds to customer inquiries, by telephone and in writing. Call Centre employees also interact with the customer through and web services. The escalation group manages major customer concerns directed from senior executives, city councilors and the OEB. The Key Accounts team interacts with THESL s large volume customers to ensure that their enquiries, requests for service and account issues are handled in an efficient and consistent manner. This area also manages relationships with retailers and resolution of customer complaints that cannot be resolved through other processes in THESL. The Field Services staff responds to the first level of emergency response for power outages, wires down, etc., installs residential smart meters, checks service connections and performs underground plant locates. 0 Customer Services staff members are also engaged in a number of system development projects and activities. Those related to system fixes and other smaller improvements are included in the operating budget. Larger initiatives and those related to ensuring regulatory compliance are explained fully with their associated costs in Exhibit D, in the capital spending narratives. Smart Meter Program Most of the costs associated with THESL s Smart Meter and Time-of-Use billing program are capital costs. However, Customer Services will incur additional Operating
3 EB-00-0 Exhibit F Tab Schedule Page of 0 and Maintenance costs to: Operate daily processes that collect and store Smart Meter data, and interface to the Independent Electricity System Operator ( IESO ) Meter Data Management Repository( MDM/R ); Update and maintain Time-of-Use web data presentation and other customer selfservice features; Update and maintain the Interactive Voice Response system that provides an automated option to direct a customer s inquiry to the appropriately trained Customer Service Representative; and Implement Time-of-Use rates and process additional call volumes from affected customers. Government Programs and Regulatory Changes Customer Services will implement and integrate processes that support: The Green Energy and Green Economy Act, 00 ( GEA ) and conservation and demand management; Smart Grid Strategy; Low-Income Energy Assistance Program ; and International Financial Reporting System implementation. 0 Individual Suite Metering The installation of individual suite metering in condominium buildings will impact all areas of customer service, including: an increased number of customer concerns and billing queries to the Call Centre; increased postage costs, bill mailings, and remittance transactions; increased meter installation updates; and additional collections for outstanding payment.
4 EB-00-0 Exhibit F Tab Schedule Page of New Customer Information System THESL is currently engaged in a three-year collaborative effort with Enersource Hydro Mississauga ( EHM ) to design and build a customer information system that will meet the needs of both EHM and THESL, and reduce future costs with respect to the programming of new regulatory requirements. The system, forecast to go live in 00, will provide improved functionality and efficiencies that will improve customer service. This initiative is discussed in detail at Exhibit D, Tab 0, Schedule. 0 Mobile Workforce Project THESL has introduced a corporate initiative to implement a mobile data capture system. Customer Services goal in this initiative will be to expand the existing Mobile Workforce System to take advantage of electronic dispatching, work management for field staff, emergency response and construction crew tracking. Other benefits will include GPS tracking of vehicles, leading to enhanced safety, improved troubleshooting (particularly for Smart Meter communication issues) and more efficient vehicle assignment. This initiative is discussed in detail at Exhibit D, Tab 0, Schedule. 0 Develop and Implement a New Customer Relationship Strategy THESL intends to continue developing a more pro-active approach to dealing with customers. A critical component of the strategy has been to identify how customers would like THESL to communicate with them, determine what information customers need and how they would like to receive or obtain it. As a result, THESL s web site is being customized to provide a more personal information portal and the ability to selfservice. It will also utilize new ways to communicate with customers through , phone calls and text messaging to cell phones. This initiative is discussed in detail at Exhibit D, Tab, Schedule -.
5 EB-00-0 Exhibit F Tab Schedule Page of 0 Develop and Implement a Flat Rate Water Heater Conversion Program Prior to the 00 Market Opening, utilities offered a flat rate energy charge for water heater services based on element and tank size. The electrical supply during peak periods to these water heaters was interrupted in order to reduce demand. Since market open in 00, flat rate was discontinued as a billing option for new customers, but approximately,000 existing customers continued with this option. With Smart Meters and Time-of- Use rates, this rate structure would not motivate customers to change their consumption patterns. Therefore, a program was developed to convert the water heater services to metered services by the end of 00. The cost of this conversion is the responsibility of the customer. COSTS 0 Table : Customer Services Costs ($ millions) 00 Historical 00 Bridge 00 Test Meter Services... Billing/Remittance/Meter Data Management... Collections Customer Relationship Management Field Services...0 Administration Total Customer Services.0.. The details of the year-over-year variances are presented in the schedules that follow covering specific Customer Services activities (Exhibit F, Tab, Schedules through ). Below is a high level summary of increased costs from 00 through 00. The most significant increases are due to Smart Meter data management and the move to Time-of- Use billing in 00.
6 EB-00-0 Exhibit F Tab Schedule Page of 0 Customer Services year-end 00 costs are projected to exceed 00 by $. million, primarily due to: $.0 million in labour cost increases; $0.0 million for additional staff, attributed to Time-of-Use billing; $.0 million additional expense for Call Centre resourcing for Time-of-Use billing implementation; $.0 million in the bad debt account. (In 00, the bad debt provision was reestablished, increasing $.0 million in the bad debt account. This required a decrease of $.0 million in the bad debt provision. The actual bad debt is tracking to the estimated provision.); $0. million for underground plant locate costs due to an increase in customer demand; $0. million for an increase in project costs for the conversion of flat rate water heater customers to metered services; and $0. million for external vendor costs for suite metering and AMI. 0 The 00 Customer Services budget represents an increase of $. million over 00, due to: Anticipated labour cost increases of $.0 million, including five additional staff to support Time-of-Use implementation, GEA initiatives and web enhancements; $0. million for additional Call Centre resources required for Time-of Use billing and the Customer Care and Billing ( CC&B ) conversion; $.00 million for bad debt due to the increase in delinquent accounts as a result of the downturn in the economy; An increase of $0.0 million in communications costs for additional phone lines and communication circuits to retrieve Smart Meter data; $0. million for miscellaneous billing costs for additional customers with suite meters and low income monthly billing;
7 EB-00-0 Exhibit F Tab Schedule Page of $0. million for an expected increase to provisions for bad debt expenses related to non-electricity receivables; $0.0 million for labour returning from the CC&B capital project and enhancements; $0.0 million for overtime labour costs to support the conversion to the new CIS; and $0.0 million for underground plant locate costs due to an increase in customer demand.
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