Resolution E-4882 DRAFT November 30, 2017

PG&E AL 4949-E/-A/WR1

PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Agenda ID 16019

ENERGY DIVISION RESOLUTION E-4882

November 30, 2017

RESOLUTION

Resolution E-4882. Pacific Gas and Electric Company’s (PG&E) Marketing, Education and Outreach Plan in Compliance with the December 17, 2015 Assigned Commissioner and Administrative Law Judge’s Ruling and Decision 15-07-001 on Residential Default Time of Use Rates.

PROPOSED OUTCOME:

·  Approves, with modifications, PG&E’s TOU marketing, education and outreach plan for 2017-2019.

SAFETY CONSIDERATIONS:

·  There is no impact on safety.

ESTIMATED COST:

·  The cost of PG&E’s plan is estimated to be $46.7 million over
3 years. This amount will be reviewed on an ongoing basis through annual reports.

By Advice Letter 4949-E, filed on November 1, 2016, and 4949-E-A, filed on March 15, 2017.

______

Summary

This Resolution approves Pacific Gas and Electric Company’s
(PG&E’s) Marketing, Education and Outreach Plan (ME&O Plan) with modifications.

On November 1, 2016, PG&E filed its ME&O Plan in accordance with Decision (D.) 15-07-001 and an Assigned Commissioner and Administrative Law Judge Ruling issued on December 17, 2015 (December 17 Ruling) in Rulemaking
(R.)12-06-013. This advice letter describes PG&E’s time-of-use (TOU) customer engagement strategy for 2017-2019 leading up to the rolling default of up to four million PG&E residential customers[1] onto a default TOU rate in 2019.

This plan was created in alignment with the Greenberg Blueprint commissioned by the Marketing Education and Outreach Working Group (Working Group) in R.12-06-013, as well as with Commission direction and Working Group discussion and direction. PG&E requests adoption of the proposed plan and proposed budget expenditures to be collected and tracked through the Residential Rate Reform Memorandum Account (RRRMA) as authorized in
D.15-07-001.

PG&E’s ME&O Plan includes three phases:

·  Phase 1 in 2017 lays the foundation for engagement with customers and deploys a test and learn approach with multiple outreach tactics.[2]

·  Phase 2 in 2018 will optimize the outreach based on the lessons from 2017.

·  Phase 3 in 2019 will continue education and engagement efforts to prepare customers for default rollout.

In its advice letter PG&E provides detail on how they will segment their customers and the tactics they will employ to reach those specific customers. A timeline which shows when each tactic will be deployed and a set of customer profiles showing when customers will be receiving specific messages were also provided.

D.15-07-001 emphasized the importance of including a plan for measurement based on metrics. The ME&O Plan includes a plan for measurement based on the metrics agreed upon by the Working Group and validated by the consultant hired by the Working Group. It also contains a budget estimate of $46.7 million dollars for all the activities described.

Background

Decision 15-07-001 directed the three investor-owned utilities (PG&E, Southern California Edison Company (SCE) and San Diego Gas Electric Company (SDG&E), collectively the IOUs) to begin the process of defaulting residential customers to TOU rates in 2019 and to undertake a series of opt-in TOU pilots in 2016 and default TOU pilots in 2018. In D.15-07-001, the Commission discussed the importance of providing adequate marketing, education and outreach to customers and directed the IOUs to work with other parties to create a working group[3] to examine ME&O for the transition to default TOU rates as well as for the changes to the tiered rate structure, for revisions to the minimum bill and bill comparison tools.[4] D.15-07-001 asked the Working Group to consider long term outreach to customers and to develop specific strategies to increase customer awareness and understanding of their rates, the changes to the tiered rate structure, and the transition to default TOU rates.

In late 2015 and early 2016 the Working Group met and created a set of draft metrics for ME&O activities and designed a baseline ME&O study to ascertain awareness and understanding of rates among ratepayers.[5]

PG&E's initial baseline study found that 49% of PG&E's residential customers were not sure which rate plan they were on. 11% of surveyed residential customers thought they were on a TOU rate, but only 4% of residential customers are actually enrolled on TOU rates.55% of customers said they had heard of TOU rates, but 62% of customers were unaware that they even had rate choices.[6]

On December 17, 2015, the Assigned Commissioner and Administrative Law Judge (ALJ) issued a ruling (December 17 Ruling) which described the Commission’s desire for greater integration of marketing activities between rate reform, demand-side management (DSM) and other IOU programs, as well as a more systematic approach to planning for default TOU ME&O. This ruling directed the IOUs to hire an expert consultant to advise the Working Group on appropriate ME&O metrics, goals, and strategies to meet those goals, including a plan for statewide ME&O program coordination. The ruling also directed the IOUs to prepare a comprehensive ME&O plan by September 1, 2016.[7] This plan was required to include:

·  Specific timelines for rate-reform related ME&O activities;

·  Budgets for such activities;

·  Descriptions of segmented ME&O for certain customer groups;

·  Surveying methodologies and questions to evaluate the metrics;

·  Coordination between the IOU’s’ ME&O activities and the statewide ME&O program (Energy Upgrade California or EUC), including how messaging content, campaigns and communication plans will be aligned. [8]

A Request for Proposal process was conducted during the first quarter of 2016 and the Working Group selected Greenberg, Inc. (Greenberg) as the ME&O consultant.[9] Through their research, Greenberg confirmed the findings of the baseline study that customers are unengaged with energy. A set of focus groups and in-depth-interviews with customers in the three IOU-territories found that customers did not connect their personal actions with demand on the electric grid and overall did not adequately understand how they were billed for energy.[10] To overcome this, Greenberg recommends that the ME&O Plan must include steps to engage customers on an emotional level as well as an intellectual level in order to affect change in behavior.

After significant consultation with Working Group members, Commission and IOU staff, Greenberg delivered the Rate Reform ME&O Blueprint (Blueprint), on August 20, 2016.[11] The Blueprint included a strategic action plan for statewide and local utility marketing as well as a proposed vision, proposed metrics, and proposed timeline and budgets for 2017 through 2019.

The Blueprint is a comprehensive document which includes many elements. Chief among these:

·  Greenberg provided an impact-based segmentation strategy which emphasized spending the most time and money on customers who would be the most negatively impacted by default TOU rates, then applying psychographics to those segments to further refine the message.

·  A go-to market plan which increases the amount of messaging closer to default on a 90/60/30 day timeline.

·  A strategy based on emotional quotient (EQ) and intellectual quotient (IQ) where a general, EQ focused statewide message would provide a reason for customers to care while the IOUs would provide a more IQ focused message( i.e. details on rate plans, rate comparisons, tips on how to adapt and conserve).

·  A mass media strategy which aimed to reach all Californians 13 and older.

·  A measurement strategy with metrics and proposed studies.

On September 12, 2016, a workshop was held by the Commission to discuss how best to incorporate the Greenberg Blueprint into the utility plans. Participants were asked to place things in several categories:

1.  things that seem reasonable and should inform the IOU plans,

2.  things that are necessary to the plans but not included in the Blueprint,

3.  things that can be done by Commission action outside this proceeding,

4.  things that cannot be included in the plans,

5.  and things that raise concerns.[12]

Parties expressed skepticism on some portions of the Blueprint at the workshop, including the budgets proposed by Greenberg. Other parts of the Blueprint, such as establishing formal alignment and management processes between ME&O in different proceedings and programs, were considered internally by Commission staff. Agreement was reached on the strategic foundation, segmentation and measurement strategies described in the Blueprint. This resulted in a common outline that was provided to the IOUs by ALJ ruling on September 30, 2016 (September 30 Ruling).[13]

On November 1, 2016, PG&E, SCE, and SDG&E submitted advice letters setting forth their respective ME&O plans detailing their strategy, tactics and timeline for customer engagement in accordance with the December 17 Ruling and Blueprint.[14] In response to direction provided by ALJ McKinney at the
February 6, 2017 prehearing conference, the IOUs submitted supplements to their ME&O plans on March 15, 2017.[15] These supplements included additional information on the IOUs’ public relations plans, segmentation strategies and budgets, as well as detailed profiles of how customers would be contacted over the default period.

PG&E’s ME&O Plan includes three phases:

·  Phase 1 in 2017 lays the foundation for engagement with customers and deploys a test and learn approach with multiple outreach tactics.

·  Phase 2 in 2018 will optimize the outreach based on the lessons from 2017.

·  Phase 3 in 2019 will continue education and engagement efforts to prepare customers for default rollout.

In the market and situation overview section required by the
September 30 Ruling, PG&E cites its own research showing that its customers have a low engagement with energy and that they view their relationship with energy and the utility as transactional in nature. They also provide an overview of their customers’ media consumption habits by segment.

In its advice letter PG&E provides detail on how they will segment their customers, and the tactics they will employ and channels they will use to reach those specific customers. This includes a 2017-2018 opt-in TOU campaign that will seek to enroll customers who will benefit the most on TOU. A timeline which shows when each tactic will be deployed and a set of customer profiles showing when and how customers will be receiving specific messages were also provided.[16]

The PG&E ME&O Plan includes a plan for measurement of education and engagement based on the metrics agreed upon by the Working Group and validated by Greenberg. The ME&O Plan also contains a budget estimate of
$46.7 million dollars total for all the activities described in the plan. This plan may be supplemented in the future based on input from the Working Group.

Notice

Notice of AL 4949-E and 4949-E-A was made by publication in the Commission’s Daily Calendar. PG&E states that a copy of the Advice Letter was mailed and distributed in accordance with Section 4 of General Order 96-B.

Protests

Advice Letter AL 4949-E was protested.

PG&E’s Advice Letter AL 4949-E was timely protested by the Office of Ratepayer Advocates (ORA), the Utility Reform Network (TURN) and the Center for Accessible for Technology (CforAT) with the Greenlining Institute on
December 6, 2016.

ORA

In its protest, ORA asks that PG&E provide budgets with more granular detail. ORA acknowledges that the budgets included are high level estimates, but believes more detailed information could serve as a baseline by which to evaluate future changes to the budget. They support PG&E’s plans to leverage budgets from other proceedings to co-fund integrated outreach efforts. They also suggest that PG&E be required to include any internal and external audits[17] of the RROIR Memorandum Account (RRRMA) in future Progress on Residential Rate Reform (PRRR) Quarterly Reports. Lastly, they ask that PG&E provide additional analysis on metrics tracking and goals.

CforAT / Greenlining Institute

CforAT and the Greenlining Institute ask for the development of consistent and effective ME&O plans and budgets through coordination between the various programs that are involved in demand-side management messaging, including the California Alternate Rates for Energy (CARE) / Energy Savings Assistance Progam (ESAP) proceeding (A.14-11-007) and the Statewide ME&O proceeding (A.12-08-007). They believe that rather than continuing with two overlapping plans, the ME&O effort in the Rate Reform proceeding should coordinate and potentially consolidate with the Statewide ME&O effort and its associated brand, Energy Upgrade California (EUC). They agree with PG&E that expert assistance should be engaged to help with these efforts.

While CforAT and the Greenlining Institute agree that comprehensive ME&O is necessary, they point out the many unknowns in the default TOU process, such as whether the transition will be big bang or rolling[18], the categories of customer that might be excluded from default[19], the actual default rates and the results of the pilots, could hinder a coordinated ME&O process. They ask that the Commission defer the expansive plans submitted by PG&E until after the integration with the Statewide ME&O effort, and only authorize the more targeted areas of the plan such as the opt-in TOU and high usage surcharge campaigns.

TURN

In their protest, TURN contends that the Commission should reject PG&E’s plan and require them to re-file a more modest plan for 2017 and wait for any further expenditures until after the default TOU rate is known. In lieu of that, TURN asks that the $10.5 million budgeted for the ‘overall plan’ in 2017 be reduced as the ‘overall plan’ as described is designed to provide the same general messaging and education that is performed by existing budgets and programs. TURN believes that most of the plan as described will reiterate current behavioral messaging on energy efficiency and is not additive. TURN reiterates many of the unknowns in the default TOU process as described by CforAT/Greenlining above and asserts that the lack of details surrounding default TOU make ME&O planning premature and that the Commission should instead rely on statewide education efforts in A.12-08-007 through at least 2017.

Lastly, TURN describes the current outreach and educational messages for residential rate reform and suggests that TOU messaging could confuse and dilute the messages on things like Tier 1 and Tier 2 outreach on tier collapse, the minimum bill, the super-user electric (SUE) surcharge, and pilot communications.

PG&E’s Response to Protests

PG&E responded to the protests on December 30, 2016. PG&E agreed with ORA and as a result will provide supplemental analysis on metrics through the Working Group and more details on marketing dollars leveraged from other programs. PG&E also agreed that any audits of the RRRMA will be reported in the quarterly PRRRs. ORA and PG&E were unable to agree on the level of budget detail to be provided in the plans. PG&E states that they offered to provide detailed reporting on the 12 categories of their original budget in their PRRR filings but that ORA did not agree to this.