A New “Twist” on aCFL Program

How One Utility Capitalized on a Unique Approach

Presented September 2, 2008 EPA Webinar: “Energy Efficiency Best Practices Programs”

Anne Ducey

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Seattle City Light (SCL)Seattle City Light (SCL)

• Public utility

• 340,000 residential customers

• 6.4 cents/kWh

• 131 sq. miles

• 90% hydro

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SCL Sees the “Light”SCL Sees the “Light”

• Neighboring utilities running CFL programs since 2004.

• SCL gets go-ahead in 2006 – we needed to catch up.

• Lots of potential!

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CFL Potential in SCL AreaCFL Potential in SCL Area

• 29% of SCL customers have NO CFLs installed.

• Complements 67% of customers who already had CFLs.

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CFL Potential in SCL AreaCFL Potential in SCL Area• Average # sockets per home = 33.4 • Total sockets = 10.5 m • Total sockets w/o CFLs = 8.8 m• Total specialty sockets = 4.2 m• Total regular sockets w/o CFLs = 4.6 m

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What’s the Best Approach?What’s the Best Approach?

• Two models used successfully in Puget Sound region:

1. Retail coupons

2. Manufacturer (mfr.) buy-down

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Retail Coupon ProgramRetail Coupon Program1. Utility prints in various $ values.

2. Utility distributes coupons.

3. Customer buys CFL with coupon.

4. Retailers send to fulfillment house.

5. Utility reimburses retailers.

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Mfr. Buy-down ProgramMfr. Buy-down Program1. Agreement with CFL mfrs. to

reduce wholesale price to retailers.2. Retailer applies regular % mark-up

but discount is passed on to customer.

3. Customer buys discounted CFLs.4. Utility reimburses CFL mfg. based

on verified shipping information.

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Mfr. Buy-down ProgramMfr. Buy-down Program

Retail price of regular CFL:

$4 + $1 (25%) = $5

Buy-down price of CFL:

$2 + $.50 (25%) = $2.50

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Benefits of Coupon ApproachBenefits of Coupon Approach

1. Coupon infrastructure already established in Puget Sound region.

2. Actual sales are tracked rather than just shipping data.

3. Retailers understand coupons.

4. Buy-down CFLs not usually in Stock Keeping Unit (SKU) system.

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An Unexpected “Twist”An Unexpected “Twist”

• SCL chooses coupon approach and advertises through Request for Proposal (RFP).

• Responses received from well-qualified contractors.

• A third option was presented – Retail Mark-down Program.

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Retail Mark-down ProgramRetail Mark-down Program1. Agreements with retailers to sell

CFLs at lower price.2. Point of Sale (POS) signage shows

reduced price and sponsoring utility.3. Retailer provide sales data to utility.4. Utility reimburses retailers.5. Regular field visits to check CFL

stock, pricing and POS material.

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Retail Mark-down ProgramRetail Mark-down Program

• Advantages:1. Discounts on regular stock.2. Extremely accurate sales data.3. Prices can be easily corrected.4. Flexible discounts.5. No coupons or rebate forms.

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Retail Mark-down ProgramRetail Mark-down Program

• Challenges:1. Longer start-up.

2. Regular field visits critical.

3. Retailer reporting requirements.

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BrandingBranding• Strong brand important.• “Twist” part of the

vernacular.• “Twist & Save” = Fun!

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Advertising Costs 6/07 – 6/08Advertising Costs 6/07 – 6/08• Radio + Print ads$ 73,000• Video + Jingle $ 51,000 • Print + Swag $ 56,000• PR $ 6,000 • Total $186,000• $/unit $

0.186

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“Twisty” with the Seattle

Mariners Moose

MascotMascot

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•Magnets•Post-it-notes•Stickers•Pens•Balloons•Employee T-shirts

Give-awaysGive-aways

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•Stand-up sign•Brochures•Banners•Store posters•Post cards•Store lists

Print MaterialPrint Material

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Store SignsStore Signs

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Home Depot Display

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Costco Display

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Lowe’s Display

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Media HighlightsMedia Highlights• “Twisty” catches 1st pitch at Mariners game• Kids carve Halloween pumpkins lit with

Twist & Save CFLs • 2-minute interview on CNN• T&S featured on 3 local TV news shows• T&S Video run as PSA’s on TV• T&S Video runs during Seahawks and

Mariners games

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Media HighlightsMedia Highlights

Mayor Nickels announces1 million CFLs sold via Twist & Save program

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SuccessesSuccesses• 21 retailers, 90 retail locations• Average SCL incentive = $1.38• + admin. and marketing = $1.74• ROI = $14.61 over CFL life (8.4*$1.74).• One million CFLs sold since 6/07• Video won a Communicator Award from

International Academy of Visual Arts• Easy-to-remember web site-

www.seattle.gov/twistandsave (It could have been: www.seattle.gov/light/conserve/twistandsave)

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SummarySummary1.Listen to the experts2.Make it easy for customers3.Consensus by committee kills creativity4.Good PR is vital5.Make it fun!

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Thank you for your attention!Thank you for your attention!Anne DuceySeattle City Lightanne.ducey@seattle.gov

www.seattle.gov/twistandsave