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CUSTOMER ENGAGEMENT IN RATE DESIGN Business & Financial Conference September 17, 2018 Ted Kelly, Principal & Senior Project Manager of Regulatory Services, Burns & McDonnell Michael Vigeant, Chief Executive Officer, GreatBlue Research, Inc.
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CUSTOMER ENGAGEMENT IN RATE DESIGN
Business & Financial ConferenceSeptember 17, 2018
Ted Kelly, Principal & Senior Project Manager of Regulatory Services, Burns & McDonnell
Michael Vigeant, Chief Executive Officer, GreatBlue Research, Inc.
Knowing Your Customers
Importance of Customer Engagement
Example Public Engagement Process
Questions
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Agenda
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Today’s Many Converging Challenges
► Sales are flat or declining► Growth is stalled► Many costs are fixed► Aging facilities► Demand for system upgrades► Increasing regulations► Little support for rate increases► Feels a little like a perfect storm…
► Changes in costs► Master plan and/or budgeting process► Shifts in class characteristics► Advances in technology► Proper revenue recovery► Develop rate options
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Why Do a Study Now?
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Why Include Customer Engagement?
KNOWING YOUR CUSTOMERS
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► Customer interactions have changed► Customers now have more influence► Information is everywhere, all the time► Technology can produce a more engaged and aware
customer► Utility must engage the public proactively
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Shifting Relationships
► Convenience through technology► Immediate gratification► Just the facts – harder to sell► Recognition and appreciation: rewards for time and loyalty► A deal all the time - entitlement
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What are Customers Looking For?
► Electric rates are an issue with customers► Methodical and informed approach needed to communicate► Incorporate research, education and stakeholder engagement► Know answers to some basic questions
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Research in Advance
Lessons learned workshopCustomer research
Affordability analysis
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Methods for Gathering Information
Non-retailcustomer communication
Stakeholderadvisory committee
Political considerations
Lessons learned
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Gathering Information
Customer research
Affordability analysis
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Gathering Information
Non-retailcustomer
communication
Stakeholderadvisory committee
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Gathering Information
Politicalconsiderations
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► Deliberate/targeted messaging – segment your audience accordingly
► Relevant and timely► Engaging – what’s in it for
them?
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Communication Strategies
► Relentless – multi media approach
► Simple and clear – confusion is a killer
► Ongoing – beyond the reward delivery
IMPORTANCE OF CUSTOMERENGAGEMENT
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Customer Engagement Process
Provide information to
customersObtain data
Educate customers
Create engagement opportunities
Test concepts
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Engagement Considerations
Uniqueness of region
Customer growth
Past studies
Utility structure
Gauge customer interest/acceptance
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Information Gathering/Dissemination
► Local/regional newspapers ► Online news ► Civic clubs and local meetings► Social media► Word-of-mouth
EXAMPLE PUBLIC ENGAGEMENT PROCESS
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► Gain significant customer/stakeholder input and buy-in through the process Rate classes/customer types Stakeholder groups (elected officials,
community groups, local leaders) Environmental groups
► Develop a rate structure designed in collaboration with customers/stakeholders
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Engagement Plan Goals
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Customer Engagement Process
Conduct customer/stakeholder researchGain feedback through a variety of methods -online surveys, text surveys, one-on-one interviews, public meetings - tailored to specific stakeholder
groups.
Strong communications plan to encourage engagementWeb, email, social media, direct mail, bill inserts, ads, informing
customers/stakeholders of goals and inviting participation.
Develop and test customer/stakeholder communication materialsFocus-group test content and delivery. Refine materials.
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Customer Engagement Process
Roll out new rate program to customer/stakeholders Comprehensive communication plan/rate guide.
Analyze feedback, prepare final rate design proposalFinal Board and Management review/approval
Customer/stakeholders review of proposed rate design Take additional input - surveys and public meetings.
Analyze feedback, prepare rate design proposal Present findings/propose rate design for Board/Mgmt review.4
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► Assess knowledge and acceptance of current rates and fees
► Gauge interest in new/different rate options
► Allow customers open channel to express opinions, thoughts and ideas about rates
► Feedback is meant to provide insight, non-prescriptive feedback
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Purpose of Customer Survey
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Customer Survey Topics
Affordability Conservationrates
Life line rates
Pre-paid option
Economic development
rate
Time of use rates
► Act on areas of interest and concern► Utilize guidance received► Evaluate areas for communication and education► Utilize in conjunction with additional data Business needs/revenue requirements
Best/standard utility practices
Rate Policy
Available technology
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Incorporating Customer Feedback
QUESTIONS
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Ted Kelly | [email protected] | 816.822.3208
Michael Vigeant | [email protected] | 860.740.4000
