© Copyright 2013, Southern California Edison

Looking Ahead: Identifying Common Elements of a Customer Engagement Platform

CEE Industry Partners Meeting September 18, 2013

Derek Okada Southern California Edison DSM Strategy & Compliance

Discussion

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• Background & Market Trends

• Program Considerations

• Program Offerings & Opportunities

• Next Steps

SCE Background

• One of the nation’s largest electric utilities

• Nearly 14 million residents in service territory

• Approximately 5 million customer accounts

• 50,000 square-mile service area • Over 103,000 miles of distribution

and transmission lines

• 7 – 8% projected average annual rate base growth through 2014 driven by:

• System reliability and infrastructure replacement

• California Renewables Portfolio Standard

• Technology improvements

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DSM Strategy

Effective and enabling customer

interactions

Intelligent Delivery

Innovative Energy Solutions

• SCE is evolving toward a technology-enabled customer delivery service model

• This shift enables SCE to: • Meet customer expectations in a

timely and agile manner as needs and expectations evolve

• Address California’s aggressive energy policies and goals while serving the specific needs of our customers

• Leverage the benefits of our smart grid through more engaged customer program participation and behaviors

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DSM Organizational Evolution

Policies Products Programs Promotion

• EE, DR, DG, Low Income, Renewables

• CLTEESP • Zero Net

Energy • Water-Energy

Nexus

• IDSM offerings • Emerging

products • PCTs, IHDs, • HANs, HEMs

• Pilots and solution development

• EE, DR, DG, ESA, PEV programs

• Behavior programs • Market

transformation programs

• Offer Management • Lifestyle Plans

• Rate Choices • TOU Rates & Dynamic

Pricing • Load Management

Incentives & Rebates (SDP)

• Self-Service Offerings

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Vision

Adopting customer’s preferred way of communication and frame of reference is essential to changing behavior towards

energy usage and increasing participation in energy programs

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Market Trends, Opportunities & Challenges

• Trends • Growing innovation and enabling technologies • Increasing CA focus on behavioral offerings • Pressing need for deeper and targeted DSM savings • Ongoing need for solutions to prepare customers for time of use pricing • Converging product and delivery channels

• Opportunities

• Redefine the utility role as an “energy advisor” • Engage customers to make informed energy use decisions • Work with energy management market actors

• Challenges

• Encouraging customers to make energy savings a priority • Working within regulatory frameworks to achieve attributable savings • Developing the value proposition for customers, partners, and utilities • Driving toward behavioral persistence and market transformation

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Non-Resource Offerings

• SCE.com • Budget Assistant

• Edison SmartConnectTM

• Offer Management

Behavioral Framework

Non-Technical Behavioral Offerings

• Social Gaming • Competition • Normative Messaging

Technical Behavioral Offerings

• Home Energy Management • Feedback & Disaggregation

Planned Behavioral Offerings

• Home/Business Energy Advisor • Home Energy Reports • Mailed Audits

Objectives

Achieve 5% Adoption Target

Identify IDSM Potential

Identify savings beyond technical measures

Enhance Customer Satisfaction

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Behavioral Intervention Progression

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Awareness • Home Energy

usage

Education • Understanding

usage • Managing energy

use • Learn ways to

save

Customer Acceptance • Energy Efficiency • Habit changing • Cross-cutting

(Participating across all IDSM programs)

Customer Persistence • Maintaining habits

Customer Analytics Customer

Analytics

Customer Analytics

Maximize Savings

Behavioral Program Qualifications (D. 10-04-029) - 2012

• Residential unit usage compared to similar residences in the subscriber’s geographic area

• Did not restrict definition to residential applications

Comparative Energy Usage

• Control vs. Treated Groups • “Gold standard” and most rigorous research design • Allows for isolation of program impact

Experimental Design

• Measurement & Evaluation post program implementation

Ex Post Measurement

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For more information on behavior intervention strategies, please refer to the behavior whitepaper, published in www.CALMAC.Org, “Paving the Way for a Richer Mix of Residential Behavior Program, Study ID SCE0334.01.

Energy Management Opportunities

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Change Behaviors Educate customers

about their energy use

Demonstrate Innovation Support development of customer facing energy management solutions • Build upon Edison SmartConnectTM

capabilities

Diversify Offerings Pursue all cost-effective

DSM opportunities to target energy savings without

impacting user experience Influence Attitudes

Identify new and impactful areas for

policy and advocacy

Two Paths Into the Home

SCE

Smart Meter

3rd Party Cloud

ZigBee Interface

Customer PCT

Customer Router

KEY POINT: Both paths enable DR and EE savings

Utility-centric: - Requires additional technology, $ - Uniform control; connection issues - Aligns with current utility programs

Interested 3rd parties: ADT Security, some PCT manufacturers

Customer-focused: - Uses home WiFi, variety of PCTs - Personalized PCT management

24/7 - Aligns with market preference

Interested 3rd parties: Cable, Telecom, HEM Platforms, Portals

“The way utilities planned for”

“The way the market is leaning”

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Smart Thermostat Study

Overview: The purpose of this study is to evaluate the capability of third parties to shed load during Save Power Days using internet-controlled thermostats in homes

Details: • Part of the SONGS Summer Readiness effort to reduce peak

energy usage • Provides guidance on efficacy of leveraging third party service

providers to reduce HVAC energy usage during Save Power Days

• Uses SCE’s new SmartConnect meters to quantify amount of energy reduced and reward customers for that reduction

• Informs future DR program design • Minimizes costs by using third party to market to their existing

connected customers • Other companies in addition to Nest are included in this

summer 2013 Study to increase diversity of learning • Study runs from June 1 through October 1 (Summer DR

Season)

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Gamification Pilot

Overview: • Partnership with Zema Good to conduct a

behavioral pilot using virtual currency from casual social games to engage, educate and reward customers for becoming more energy efficient

• Goal is to test this emerging technology and discover whether it can be successful in the marketplace

Details: • New Emerging Technology assessment pilot

planned to launch in 2013 • Residential customers will be targeted to

qualify for this pilot and randomly selected to participate in the trial

• Participants will earn digital rewards for each qualified action taken that moves the customer up the Behavior Intervention Progression lifecycle

• Energy savings will be measured over a 12-month period after the pilot launches

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Home Energy Report Pilots

Overview: • Enhance SCE HEES mail-in survey by

adding treatment messages to cover letter

• Rationale: Test message type effectiveness and test whether behavioral treatments can drive customers to other programs

• Benefits: Employs proven tools for energy savings, but tests new approaches/theories, uses existing program infrastructures and learn about program synergies and sequencing

• Theoretical approach: Loss aversion and Referencing

• Focus: High Usage Customers

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Universal Audit Tool Offerings

Overview: • Home Energy Advisor and Business

Energy Advisor provides audit information that is calibrated to customer profiles

• Integrates DSM including EE, DR, DG, Emerging Technologies, Smart Connect, Budget Assistant, Rate Analysis, New Digital Customer Experience, and Engagement Marketing

• Comparative energy usage • Ongoing interactive customer

engagement • Enhancements focused on utilizing

social media, rapid rewards and gamification tactics

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Load Disaggregation Opportunities

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Next Steps

• Continue to explore innovative energy management and behavioral offerings • Expand PCT, IHD, and other energy management solutions and

partnerships • Test new DSM measures

• Expand the scope of behavioral measures • Continue exploration within the behavioral community for measures

meeting the 2013-2014 behavioral framework • Explore opportunities to expand the definition of behavioral programs in

California

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Q&A

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Derek Okada Southern California Edison (626) 302-0790 Derek.Okada@sce.com

Home Energy Management Opportunities

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Technology Intervention Opportunities Strategies Barriers/Risks

PCT • Increase adoption of DR enabled PCTs • Develop new “cloud” to “cloud” channels

• Engage Energy Information Service Providers on DR opportunities

• Business case for Residential OpenADR not yet established

IHD/Mobile • Increase availability of IHD/Mobile customer offerings

• Pilot IHDs in homes • Evaluate apps for EE/DR

• IHDs may be short-lived • No SmartApps other than

Outage Management

HAN/HEM • Educate consumers about market availability • Test market for EE/DR savings potential • Work with retailers on customer strategies

• Field test HANs via DR Pilots • Support retailer HAN strategies • Evaluate HEMs savings potential

• Emerging product class • Savings benefit still TBD

Smart Appliances

• Work with ENERGY STAR and CEE on “connected” device standards and strategies

• Field test Smart Appliance • Evaluate EE/DR savings

potential • Test consumer behaviors

• Limited availability • Savings not yet documented • Behavior strategy not defined

Smart Plugs

• Test cost effective delivery channels • Educate customers on plug controls

• Evaluate EE savings potential • Pilot web channel opportunities • Test consumer behaviors

• Low consumer awareness • Long ROI • No energy standards

Web Tools • Develop customer centric tools to better manage energy use

• Enhance customer facing tools • Budget Assistant • Universal Audit Tool • Energy Disaggregation Pilot

• Customer engagement strategy not yet defined

Behavioral Offerings

Technology Description Customer Needs Benefits

Home Energy Advisor

• Online audit tool, offering ways to save energy including behavioral changes, EE, DR, water and solar to homeowners, renters, and landlords

• Straight forward tools to identify energy use and energy saving tips and recommendations

• Provides custom recommendations, breakdown of key energy loads, links to programs and services

Business Energy Advisor

• Online audit tool offering energy saving tips and recommendations for EE, DR, water and solar opportunities for small business owners and tenants

• Information about how to prioritize EE investments

• Provides custom recommendations, breakdown of key energy loads, links to programs and services

Home Energy Guide

• Provides a guide to home energy use including product and energy use information for building materials, heating & cooling, lighting, appliances & electronics, and pools & spas

• Straightforward resource to guide them on product features, purchase considerations and other tips on how to incorporate EE measures into their use

• Energy education

Home Energy Reports

• Proactive report sent to customers which compares their usage to similar households

• Information about energy use and how they compare to their peers (neighbors)

• Provides peer comparison of energy use, normative messaging and behavioral influence

Budget Assistant

• Allows customers to set monthly spending goals and track progress while receiving automated alerts

• Information about monthly energy usage and how it contributes to their bills

• Provides hourly interval data (from the day before) to help customers set saving targets and monitor ongoing usage

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