A Look at Changing

Utility Pricing Structures

March 23, 2016

Today’s Presenters

Scott WhitmireProject Manager

Southern Company

Dave ElveExecutive Vice President &

Chief Marketing Officer

PayGo

Nathan ShannonDeputy Director

Smart Grid Consumer

Collaborative

Agenda

3

Scott Whitmire, Georgia Power

Question and Answer Session

Dave Elve, PayGo Utilities

Introduction - Realizing the benefits of AMI through dynamic pricing plans

2016 State of the Consumer Report

• Theme 5: Consumer

and industry

experience indicate a

path forward for Smart

Grid-enabled pricing

programs

• Findings indicate that

consumers prefer

electricity pricing plans

that limit their financial

risk

Speaker #1

Name Background

Scott Whitmire Project Manager at Southern Company• Employed by Southern Company for 30 years and now part of

Customer Service

• Has been working on Georgia Power’s Payment Strategy for the last three years

• Has worked in many areas of the company, including Generation, Transmission and Distribution, Finance and Information Technology

• Bachelor of Applied Science (BASc), Computer/Information Technology Administration and Management from Clayton State University

Georgia Power’s Pricing Plans and PrePay

Initiative

SGCC Webinar

March 23, 2016

Agenda

7

• Georgia Power – Other Initiatives

• How did we get here?

• Why PrePay?

• Successes, Opportunities, Lessons Learned

Georgia Power

8

Smart Usage Rate (SUR)

• Georgia Power began actively marketing the

Smart Usage Rate in May 2015.

• SUR is a demand based rate with a time of use

component for residential customers.

• Customers are encouraged to keep their electric

energy charges low by shifting how and when

they use major appliance.

• To keep the demand (kW) charge low

customers space out when they use major

appliance. Customers can hit their max

demand charge 24 hours a day/7 days a

week

• Reducing kWh charge means shifting

when electricity is used to Georgia Power’s

off-peak hours. Georgia Power is on-peak

June-September, 2PM -7PM.

How Did We Get here?

9

Customer Engagement Study

• 2013 – Bain Consulting assisted us in a study of our customer base

• Result included an overview of GPC residential customer group’s key

characteristics

% of

population52% 17% 13% 7% 6% 5%

% of profit 52% 16% 18% -2% -1% 17%

Payment

historyGreat Poor Very poor Very poor Great Good

Power

usageAverage Average High Low Lowest Highest

Own/ rent Own Own or Rent Own Rent Rent Own

Age Older Middle Middle Younger Younger Older

Income Higher Middle Middle Lower Lower Higher

Marital

statusMarried Single Married Single Single Married

Mass Market Homeowners

Everyday Georgia Day to Day

Just Getting Started

Young and Mobile

Established Households

Five themes surfaced while examining pain points across the customer value chain

Customers want a

seamless transfer

service process

Customers want more

products & services

from GPC (energy

efficiency)

Customers want more

information on

outages, usage and

rate plan options

Start, Move, or

Stop Service

My Bill &

Energy Usage

Information

Payment

Options

Outages &

Service

Issues

Additional

Products &

Services

Customers want to

use their preferred

method of payment

Customers want

more flexibility and

ease with payment

options

How Did We Get here?

11

Payment Strategy Initiatives

• More Flexibility

• How about more locations that are open longer hours and on weekends

• Preferred Method of Payment

• Credit/Debit is the new preferred method

• Payment Options

• Pay when you want and how you want

Payment

Options

Customers want to

use their preferred

method of payment

Customers want

more flexibility and

ease with payment

options

Why PrePay?

12

Benefits to Customer

• No deposits, No reconnect fees

• Utilize existing deposits

• Pay off past due amount over

time

• Pay any time, pay any amount

• Control!

• Convenience

Benefits to Company

• Charge-off reduction and

collections

• A better option for some

customers (Customer

Satisfaction)

• Regulatory (GPC)

• Return on AMI investment

How Is It Going?

13

Georgia Power’s PrePay Program - Successes

• Just under 10,000 customers enrolled

• Collected over $900,000 in 2015 from 25% rule

• Over $1.5M to date

• By the end of 2015, in first full year, we had 8% of the eligible residential

population on the program

• 56% of active accounts have obtained a zero ($0) deferred balance

How Is It Going?

14

Georgia Power’s PrePay Program – Opportunities & Lessons Learned

• Experienced a couple of periods where we had more unenrollments than

enrollments

• Issue #1: Hot summer and technology issues

• Issue #2: CSR’s not following unenrollment policy

• CSR Training is vital to success of PrePay

• Set aside time for detailed training for:

• Clear understanding of how PrePay works

• How can the Customer get it if the person selling it doesn’t get

it?

• What to say and what not to say when enrolling

• Example: “You only have to pay $XX to get started…”

• Make sure the Benefits are clear

• Make sure the Process is clear

• Get that customer call to the right person(s)!

Speaker #2

Name Background

Dave Elve Executive Vice President & Chief Marketing Officer at PayGo• Numerous executive roles in the energy industry in a career which

spans over 20 years and worked with numerous utilities on their Smart Grid programs

• Active Investor and adviser to several energy industry ventures including PayGo, Verdeeco, Enspiria and Preparis

• Founder and past President of the Smart Meter Manufacturers’ Association of America (SMMAA)

• Named to the FierceEnergy “15 Most Influential people in Energy”

• Holds a B.S. in Business, a MBA in Finance and is a graduate of the Georgia Tech Management Institute’s Executive Program

PayGo Utilities 2016©

• IVR• CSR

• Web Portal• Mobile• Kiosk• Existing Utility

Payment System• Walk-up cash

Customer

CustomerPayment

Utility Funds by 9am

Bank

Utility CSR

Mesh

Customer Account Updated

CIS

16

ESB

MDMS

AMI Collection EngineSoftware

RF, PLC

Prepay: Meter to CashLeveraging Smart Grid Investment for Customer Engagement

PayGo Utilities 2016©

What is going on in the Industry…

Customers • Background

– 33% of smart phones users have prepaid mobile plans

– 20% customers are underbanked

– 20% of utility customers move annually

• Pay As You Go benefits– No deposits

– No Late Fees

– No Reconnect Fees

– Reduction in usage

• Sample Customer Use Cases

Utility• Higher customer sat scores

• Energy Efficiency (sustainability)– 7.5% - 12.7% reduction in usage

• Operational savings– Write-offs reductions

– Long term call center reductions

17

PayGo Utilities 2016©

Market Overview

• Less than ½% of electric meters are prepaid

– …..vs. 33% of smart phones

– 10 IOUs either contracted or in some stage of the prepay lifecycle

• Studies: 15-20% will enroll in prepay energy

• Customer advocates in Georgia and elsewhere starting to show support

• Millennials, environmentally focused and financially challenged are key demographics

• Global markets include gas and higher enrollment rates

18

PayGo Utilities 2016©

Lessons Learned

• Beneficial additional layer to smart grid (Day 2 benefits)

• Not just about technology….

• Business process change is crucial

• Marketing not to be overlooked

• Ubiquitous (and cheap) payment channels needed

– 3X more payments on prepay

• The Call Center is the key channel

– Increase enrollments 3X by call script redesign and comprehensive agent training

– Several other IOU are currently engaged in a similar agent

“sales agility” program

19

Thank you! You will receive a copy of todays slides to the email you

used to register

Nathan ShannonDeputy Director

Smart Grid Consumer

Collaborative

Scott WhitmireProject Manager

Southern Company

Dave ElveExecutive Vice President &

Chief Marketing Officer

PayGo