1 ______ ___ ____ ___ _____ _______ Seattle City Light Rate Design Outreach November 1, 2013 Summary of Online Survey Results 11/1 Review Panel Discussion.

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Seattle City LightRate Design Outreach

November 1, 2013

Summary of Online Survey Results11/1 Review Panel Discussion

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Outreach Objectives

• Better understand customer knowledge and perspectives re: rate design

• Gather feedback for Seattle City Light and the Review Panel

• Identify issues or concerns • Inform communications

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Methodology

• Online survey (SurveyMonkey)• Administered by City Light• Fielded Oct. 18-29 (Data analysis period: Oct. 18-25)

• Emailed to random list of business and residential customers

• 1177 respondents• Number of respondents (n) noted on slides

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Survey Limitations

• Not appropriate to make statistical inferences

• Non-blind, may be biased towards those with a stronger relationships/opinions

• Businesses underrepresented – important to conduct additional outreach

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Background

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More than 9 in 10 respondents represented the residential perspective.

8%

91%

1%

Would you like to answer this survey from the perspective of…? (All, n=1,116)

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Business Respondents: Geography

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Real estate and manufacturing companies were among the top business respondents.

Real estate, rental and leasing

Manufacturing

Other

Educational services

Health care and social assistance

Accomodation and food services

Transportation and warehousing

Professional, scientific and technical services

Public administration

Arts, entertainment and recreation

Utilities

Retail trade

24%18%

12%8%8%

7%7%

5%5%

4%2%

1%

Which of the following categories best describes your company’s primary business? (Business, n=85)

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62% of business respondents reported 100 or more employees.

12%

4%

19%17%

45%

5%

Size of business (Business, n=85)

62%

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92% of business respondents are involved in business decisions that affect electrical use.

Yes92%

No8%

Are you involved in business decisions that affect elec-trical use at your workplace? (Business, n=85)

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Residential Respondents: Geography

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53% of residential respondents report paying electric bills between $50 and $150.

Less than $50 Between $50 and $150

More than $150 Don't know

24%

53%

21%

2%

On average, how much is your home's electric bill? (Your Seattle City Light bill covers two months.)

(Residential, n=985)

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Key Findings

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A majority of customers feel their City Light electric bill is a fair price.

A high price for the service you receive

A fair price for the service you receive

A low price for the service you receive

Don't know/something else

24%

64%

6%

6%

23%

59%

7%

11%

9. When it comes to the value of your Seattle City Light electric bill, would you say your electric bill is…?

(Business, n=85; Residential, n=1001)

RESIDENTIAL BUSINESS

15Not a problem Somewhat a

problemA problem A big problem Don't know

22%

35%

15%

6%

21%

57% of business customers do not see rate design as much of a problem.Currently, non-residential customer bills are mostly based on how much electricity is used-- there is no fixed charge for basic services. As a result, some customers may not be paying for their full cost of being connected to the electrical grid, while other customers may be paying more than their true cost. How much of a problem do you think this is for Seattle City Light customers? (Business, n=85)

57%

16

Not a problem Somewhat a problem

A problem A big problem Don't know

41%

25%

11%5%

18%

Most residential customers (66%) don’t see rate design as much of a problem.

Currently, residential customers have a low fixed charge of $4.71 per month, and then the rest of the bill is based on how much electricity is used. The fixed charge is designed to be very low. As a result, some customers may not be paying for their full cost of being connected to the electrical grid, while other customers may be paying more than their true cost. How much of a problem do you think this is for City Light customers? (Residential, n=985)

66%

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Prices are a stronger factor in motivating conservation for businesses than for residential customers. City Light is committed to encouraging energy conservation, and is concerned that reducing the price of energy might send the wrong price signal to customers. Do you feel that the price that City Light charges you for electricity is a factor in motivating you to conserve energy? (All, n=1050; Residential, n=965, Business, n=85)

Yes, the price is a strong factor in whether I choose to conserve energy

Somewhat, I do consider price, but other things influence me too

No, price is not a factor. I conserve energy because it is good for the environment

Energy conservation is not something I think about

25%

52%

21%

2%

19%

45%

36%

1%

19%

45%

34%

1%

TOTAL RESIDENTIAL BUSINESS

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Across all respondents, continued conservation and environmental programs is a top priority.

Ensuring continued innovative energy conservation and environmental programs

Improving rate transparency and simplicity

Ensuring that all customers pay their fair share of costs

Providing a price signal for customers to reduce energy consumption and invest in energy efficiency measures

Improving rate predictability for customers

Improving financial security for the utility

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

How do you think Seattle City Light should prioritize among the following rate design objectives? Rate the objectives below, with 1 being the highest priority and 6 being

the lowest. (Ranked Objective as #1/Highest Priority. All, n=1050)

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However, businesses and residential customers differ in their top priorities.

Ensuring continued innovative energy conservation and environmental programs

Ensuring that all customers pay their fair share of costs

Improving rate transparency and simplicity

Improving rate predictability for customers

Providing a price signal for customers to reduce energy consumption and invest in energy efficiency measures

Improving financial security for the utility

0% 5% 10%15%20%25%30%35%40%45%

How do you think Seattle City Light should prioritize among the following rate design objectives? Rate the objectives below, with 1 being the high-

est priority and 6 being the lowest. (Ranked Objective as #1/Highest Prior-ity. All, n=1050; Business, n=85;

TOTALResidentialBusiness

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Businesses prioritize predictability over conservation and environmental programs.

BUSINESS CUSTOMERS RESIDENTIAL CUSTOMERS1. Improving rate predictability for customers

2. Ensuring continued innovative energy conservation and environmental programs

3. Ensuring that all customers pay their fair share of costs

1. Ensuring continued innovative energy conservation and environmental programs

2. Improving rate transparency and simplicity

3. Improving rate predictability for customers

PRIORITY RATINGS, BASED ON AVERAGE SCORE, TOP 3

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232 respondents shared suggestions about rate design.

Open-ended comment themes:

• Concerns/fears about rate increases and economic hardship

• Both concerns and compliments about policies (concern: social engineering. compliment: incentives)

• Many mentions of “fairness”

• Confusion and questions about “rate design” and “pricing signals”

• Several specific suggestions re: design and messaging

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Overall Themes/Implications

• Most don’t believe there’s a rate design problem.• Rate design is viewed as code for rate increases.• City Light is seen as offering a fair price for

services.• Messages that describe fixed costs as “too low”

are not likely to be believed.• Environmental and conservation initiatives are

highly valued – particularly by residential customers. Rate design shouldn’t undercut these achievements.

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Seattle City LightRate Design Outreach

Summary of Online Survey Results