Choose When You

Use

How to Think About Utility Customers

The Nevada Dynamic Pricing Trial (NDPT)

Craig Boice, Director

ADS Town Meeting Washington, D.C. July 11, 2013

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Official Disclaimer“This presentation was prepared and delivered by Craig Boice of the Boice Dunham Group, Inc., and represents only his opinion. This presentation in whole or in part has neither been endorsed, nor reviewed, nor authorized by the U.S. Department of Energy, Lawrence Berkeley National Laboratories, or NV Energy.”

However, if you have questions:

Craig Boice 212-924-2200

bdgbusdevl@msn.com

• A Smart Grid AMI project to benefit 2.4 MM Nevadans• 1.3 MM electric meters, 150k

gas modules over 46k square miles• Nevada PUC approved July 30,

2010• Sensus, Itron, Alstom

technologies• $35MM in annual operating

benefits • $303 MM in total project costs• $139 MM of federal SGIG

funding

• NDPT to test dynamic rates, education & technology

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NV Energize is a SGIG Project

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• NDPT Data spans usage, surveys, and interviews:• Meter, HVAC, education, and customer service data

collected, analyzed

• Surveys for demographics, premise, & customer attitudes/acceptance – baseline and completion conducted, analyzed

• On-premises interviews, longitudinal focus groups conducted, analyzed

• EPP, low-income attitudes and price response effects documented

• The NDPT Design spans Nevada:• Randomly-assigned treatments from a stratified sample

with opt-in acceptance

• Two separate trials (North & South) across a two-year span (3/1/2013- 2/28/2015)

• May opt-out after year one: best-bill guarantee for the first year only

• TOU/CPP rates, EcoFactor technology and Vergence Entertainment education treatments

The NDPT is Statewide

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The NDPT Design is Formal

Treatment Cell Participants: North(#)

Participants: South (#)

Total Participants

(#)

Education Only* --- 248 248

Rate Only (TOU-E)

248 248 496

Rate Only (CPP) 248 496 744

TOU-E + Education

248 248 496

CPP + Education

248 496 744

TOU-E + Education + Technology

248 248 496

CPP + Education + Technology

248 496 744

Total 1,488 2,480 3,968

*Education-Only treatment cell a special case

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NDPT Rates Are Complex

Rate Flat Core Summer

CPP

Shoulder

Summer CPP

Core Summer On-Peak

Core Summer Off-Peak

Shoulder Summer On-Peak

ShoulderSumme

r Off-Peak

Winter Off-Peak

TOU-E .11442

NA NA .44896 .07243 .14267 .07243 .07243

CPP .11442

.75830 .43872 .37991 .07243 .12580 .07243 .07243

Rate Flat Summer CPP

Summer On-Peak

Summer Mid-Peak

Summer Off-Peak

Winter On-Peak

Winter Off-Peak

TOU-E .09964

NA .39602 .21242 .06831 .10152 .06831

CPP .09964

.58026 .34368 .21242 .06831 .10152 .06831

NDPT Rates – North (Schedule D-1 Total Rate, $/kWh)

NDPT Rates – South (Schedule RS Total Rate, $/kWh)

Source: Statement of Rates, effective 04-01-2013 (10J & 63K(1))

Summer Peak Period: June-September, 2-7 PMSummer Shoulder Months: June and SeptemberSummer Core Months: July and AugustOff-Peak Period: all other June-September hours, October-May all hoursCPP an overlay to TOU-E, with 18 3-7 pm non-holiday weekday events (14 Core, 4 Shoulder)

Summer On-Peak Period: July-September, 1-6 PM weekdaysSummer Mid-Peak Period: July-September, 10 am-1 PM and 6-9 pm weekdaysSummer Off-Peak Period: July-September, all other hoursWinter On-Peak Period: October-June, 5-9 pm, all daysWinter Off-Peak Period: October-June, 9 pm – 5 am, all daysCPP an overlay to TOU-E, with 16 2-6 pm non-holiday weekday events (14 July-August, 2 September)

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The NDPT Targeted Single-Family HouseholdsSingle-family households screened for

eligibilitySmart meter installation dateService classMedical codes, employee/contractor, 12 other

criteria

Pools were randomly ordered, and then randomly assigned

Control group, or one of the six treatment pools by energy use strata

‘noncompliers’

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The NDPT Solicitation was Classic Direct Marketing• Heads-up postcard sent to eligible customers

that an important offer was on the way

• Two days later, customers received a recruitment packet:• Personalized letter• Treatment ‘Savings Guide for Applicants”

brochure• Return postcard and envelope• Rate information card• Disclosure agreement

• Reminder letter sent six weeks later followed by outbound calling to non-respondents in open cells

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First, a Postcard Alert…

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Then, a Solicitation Packet

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Recruitment Was A Success• Despite research constraints, recruited and

installed 5,279 Nevada households as NDPT participants

• From a single staged mailing of postcards and recruitment packets:

• Immediately filled more than half of all cells, with overenrollment due to simultaneous submissions

• Later in the first month, had to turn away hundreds of customers due to cells being filled prior to their responses

• 5% overall enrollment (3.7 - 7.9% across cells) achieved before brakes applied

• BUT large-usage, multi-treatment strata below statistical preferences, despite more mailings and calls

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NDPT Current Enrollment

Treatment Cell Participants: North(#)

Participants: South (#)

Total Participants

(#)

Education Only* --- 26 26

Rate Only (TOU-E)

435 430 865

Rate Only (CPP) 334 917 1,251

TOU-E + Education

299 323 622

CPP + Education

304 734 1,038

TOU-E + Education + Technology

151 315 466

CPP + Education + Technology

323 714 1,037

Total 1,846 3,433 5,305

*Education-Only treatment cell a special case

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NDPT Enrollment Was Easy, But Not for Everyone• Customers could enroll via telephone,

dedicated website, return mail

• Automatic phone and web confirmation/denial provided

• letters sent to all those who tried to enroll via mail

• Education and technology treatments required installs

• Education recipients had welcome emails, mail packets, and instructions (80% installed application, 65% the game)

• Technology recipients had installation scheduling invitations (many didn’t respond or changed their minds)

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Early NDPT Lessons1. Customers are key components of the

Smart Grid, whose role is to own their energy usage

2. Customers come preconfigured (e.g., many believe they are already on time-based rates, or find them obvious)

3. Almost all customer engagement is casual and fast (not decisive and analytic)

4. Technology installation is a bigger job than many customers want to do, or even understand

5. Marketing works: motivation and trial guided by light, enjoyable, repetitive, and continual reinforcement