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NW Regional Public Utility Behavior Based Energy Efficiency Programs Conference Call September 29, 2011

“Western Mass Saves” Program Overview“Western Mass Saves” Program Overview

Tony FornutoTony FornutoResidential Program AdministratorResidential Program AdministratorWestern Massachusetts Electric Co.Western Massachusetts Electric Co.

Facilitated by Summer Goodwin, BPA

““Western Mass Saves” Western Mass Saves” Program OverviewProgram Overview

Tony FornutoTony FornutoResidential Program AdministratorResidential Program Administrator

Western Massachusetts Electric Co.Western Massachusetts Electric Co.

Service Territory and Target AreaService Territory and Target AreaService Territory

• Customers: 182,000+ residential

• Communities: 59 cities and towns

• Service area: 1,500 square miles

Target Area (initial)

• Treatment territory includes 8 communities:

• Agawam• Amherst/Pelham• Easthampton• Ludlow• Montgomery• Springfield• Sunderland• West Springfield

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More savings & less cost through deep customer engagement

Direct recruitment of customers online for ongoing engagement through personalized savings recommendations and information

Rewards given to customers based on energy saved

Aggregate and individual savings tracked on a monthly basis using best practice bill analysis with comparison control groups

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Program OverviewProgram OverviewMulti-channel approach to capture broad and deep savings

Direct mail

Targeted email communication

Advanced web experience

Local community teams, contests and prizes

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Program OverviewProgram Overview

Goal: engage 5,000 customers Online platform goes live

November 2010 25,000 customers selected to

receive reports 25,000 customer selected as

“control” (do not receive reports)

Reports designed to drive to online engagement

Using Direct Mail as a Tool for EngagementUsing Direct Mail as a Tool for Engagement

Bill Inserts-Focus on Rewards AspectBill Inserts-Focus on Rewards Aspect

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Example: Western Mass Saves Challenge

Towns compete to achieve 3% kWh savings

Local messaging, events and prizes

Online community pages and leader boards

Winning towns receive free solar panels on public building

Community Engagement: Towns and CitiesCommunity Engagement: Towns and Cities

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Example: Amherst Classroom Challenge

Students sell EE products and acquire households into program

Revenue goes back to school EE efforts

Classrooms and schools compete based on total EE delivered and number of households acquired into online program

Community Engagement: Schools and ClassroomsCommunity Engagement: Schools and Classrooms

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““Surround Sound” MarketingSurround Sound” Marketing

Local media Schools challenges

Teams Rewards merchant collateral

Press Web ads

Community events Search engine marketing

ENERGY STAR Lights Catalog Social media

Opportunistic campaigns Refer-a-friend

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Where Are They Coming From?Where Are They Coming From?

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Online ExperiencesOnline Experiences

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Monthly Rewards Emails Have A 53% Open Rate!Monthly Rewards Emails Have A 53% Open Rate!

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Online ExperiencesOnline Experiences

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Opportunistic Messaging Drives Deeper Engagement…Opportunistic Messaging Drives Deeper Engagement…

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Customer Receives Targeted MessagingCustomer Receives Targeted Messaging

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Recommendations & ExplanationsRecommendations & Explanations

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Rewards: Keeping Customer EngagedRewards: Keeping Customer Engaged

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Community/Social Engagement

Using Direct Mail as a Tool for EngagementUsing Direct Mail as a Tool for Engagement

Benchmark Mailer-“Usage Comparison”

resulting in a 0.51% conversion

rate

Using Direct Mail as a Tool for EngagementUsing Direct Mail as a Tool for Engagement

Online Rewards 6% conversion rate

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Scaling online rewards promotion in the mail…Scaling online rewards promotion in the mail…

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Points Offered/Converted CustomersPoints Offered/Converted Customers

Points Offered ConversionRate

<150 3.05%

151-300 3.39%

301-450 4.69%

451-600 4.94%

601-750 5.91%

The number of reward points offered is the largest factor in convertingcustomers from direct mail to active engagement

Energy Savings: Direct Mail Impact

Verified kWh savings (%) est. 0.98% as of 6/15

Projected annual kWh savings (%) est. 1-2%

Households 59,019 / 99,019*

Conversion to online 0.2 – 5.9%

Opt-out rate 0.1% (61 total)

* “Households” receiving mail at least once

Energy Savings: Online Participants Online program

Verified kWh savings (%) est. 4.2% as of 6/15

Projected annual kWh savings (%) est. 3.5 – 6.5%

Online members 6,142

Ways to save marked as “doing” or “done” 14 per member

Customer satisfaction increase 7-11%

Monthly email open rate 53%

Percent of members who say WMS has led to taking efficiency measures

94%

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Positive Customer ReactionsPositive Customer Reactions“The thing that I like most about Western Mass Saves is the ability to save money and even earn prizes if successful. The competitive edge in me likes those kinds of challenges. I also enjoy saving money and look at it as a challenge as well.

We had Jeff come out and go through our house for the free energy audit and that was wonderful. He told us things about our home that we didn’t even know.

We also were able to replace all our light bulbs with the CFL ones, so I anticipate that will show up as a reduction on future electric bills… Participating in this program makes me feel closer to WMECo and that maybe I have some control over the costs.”

-Teresa B., Pittsfield, MA

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Positive Customer ReactionsPositive Customer Reactions

“The program is a great way for the Company to interact with its customers… I think it tells me the Company is trying to work with customers to try to find ways for all of us to save.”

“I like the fact the site provides ideas on ways to save electric use. Many I had already adopted but there were several that allowed me to increase my potential savings.”

“I’d really like to see more options available for the customer in terms of uses for the points we earn in the savings process.”

-Tom N., West Springfield, MA

Online channel seems more cost-effective and scalable than printed report channel

Rewards seem to be driving increased customer satisfaction and increased energy efficiency benefits for online participating customers

Strong engagement with customers (over 50% email open rate) but very little discernible call center impact due to vendor program support management

Third party evaluation needed to confirm savings and persistence

Expand local business, non-profit and service organization engagement with energy saving “teams”

Lessons Learned and Next Steps

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Evaluation of Program ResultsEvaluation of Program Results

Large-Scale Data Analysis leverages usage data and other data sources to provide accurate, timely and robust verified energy savings

Best practice Experimental and Quasi-Experimental design

“Opt-in” analysis eliminates selection bias through “rolling control” method

Data being reviewed by academics at Harvard and Stanford

Program being evaluated Opinion Dynamics, and ACEEE

Planning independent interim and final evaluations for pilot period

Evaluation OverviewEvaluation Overview

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Statistical tests determine heterogeneity in participant versus control bills

Regressions run for mean usage, geography, property characteristics, demographic characteristics, etc. to filter any biases

Temporal constraints imposed for rolling control group, with minimum of 500 control customers in each period

Bills normalized for duration through daily use values

“Passive” savings from customers who receive direct marketing, but do not sign up online executed through traditional experimental design, with random assignment

Control Group ConsiderationsControl Group Considerations

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Gross Verified Electricity Savings: Program participants versus control group (difference of differences analysis)

Gross Deemed Savings: Total Deemed Savings from program participants

Net Deemed Savings: Total Deemed Savings minus difference of deemed savings between program participants and control group

Net Verified Electricity Savings: Gross Verified Electricity Savings minus Net Deemed Savings

Resource MetricsResource Metrics

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Acquisition Metrics

Website hits

Web sign-ups from Mailer and No-Mailer customers

Mailer customer opt-outs

Activation Metrics

Rewards program registration

Savings plan commitments

Engagement Metrics

Cross program referrals

Number and most common committed actions

Estimated resource savings from committed actions

Non-Resource (Process) Metrics

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Contact Info:Contact Info:

Tony FornutoWestern Massachusetts Electric Co.Telephone: 413.787.9329Email: fornuaj@nu.com