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
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
2
NV Energize is a SGIG Project
• 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
3
The NDPT is Statewide
• 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 (3/1/20132/28/2015)
•
May opt-out after year one: best-bill guarantee for the first year only
•
TOU/CPP rates, EcoFactor technology and Vergence Entertainment
education treatments
• 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
4
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
1,488
2,480
3,968
Total
*Education-Only treatment cell a special case
5
NDPT Rates Are
Complex
NDPT Rates – South (Schedule RS Total Rate, $/kWh)
Rate
Flat
Core
Summer
CPP
Shoulder
Summer
CPP
Core
Summer
On-Peak
Core
Summer
Off-Peak
Shoulder
Summer
On-Peak
Shoulder
Summer
Off-Peak
Winter
Off-Peak
TOU-E
.11442
NA
NA
.44896
.07243
.14267
.07243
.07243
CPP
.11442
.75830
.43872
.37991
.07243
.12580
.07243
.07243
Summer Peak Period: June-September, 2-7 PM
Summer Shoulder Months: June and September
Summer Core Months: July and August
Off-Peak Period: all other June-September hours, October-May all hours
CPP an overlay to TOU-E, with 18 3-7 pm non-holiday weekday events (14 Core, 4 Shoulder)
NDPT Rates – North (Schedule D-1 Total Rate, $/kWh)
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
Summer On-Peak Period: July-September, 1-6 PM weekdays
Summer Mid-Peak Period: July-September, 10 am-1 PM and 6-9 pm weekdays
Summer Off-Peak Period: July-September, all other hours
Winter On-Peak Period: October-June, 5-9 pm, all days
Winter Off-Peak Period: October-June, 9 pm – 5 am, all days
CPP an overlay to TOU-E, with 16 2-6 pm non-holiday weekday events (14 July-August, 2 September)
Source: Statement of Rates, effective 04-01-2013 (10J & 63K(1))
6
The NDPT Targeted
Single-Family Households
 Single-family households screened for eligibility
 Smart meter installation date
 Service class
 Medical 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’
7
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
8
First, a Postcard Alert…
9
Then, a Solicitation Packet
10
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
11
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
1,846
3,433
5,305
Total
*Education-Only treatment cell a special case
12
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)
13
Early NDPT Lessons
1.
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
14