Application No.: Exhibit No.: SCE-04, Vol. 3 Witnesses: L. Cagnolatti K. Devore J. Lim C. Prescott T. Walker (U 338-E) Customer Service Volume 3 - Customer Service and Information Delivery Before the Public Utilities Commission of the State of California Rosemead, California November 2013
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Application No.: Exhibit No.: SCE-04, Vol. 3 Witnesses: L. Cagnolatti
K. Devore J. Lim C. Prescott T. Walker
(U 338-E)
Customer Service Volume 3 - Customer Service and Information Delivery
Before the
Public Utilities Commission of the State of California
Rosemead, CaliforniaNovember 2013
SCE-04: Customer Service Volume 03 - Customer Service and Information Delivery
Table Of Contents
Section Page Witness
-i-
I. OVERVIEW OF BUSINESS CUSTOMER SERVICES..................................1 L. Cagnolatti
A. Overview of Business Customer Services .............................................1
1. Business Customer Division ......................................................1
2. Customer Programs and Services ..............................................2
3. Operating Unit Management and Support .................................2
B. Impact of a Fully Deployed Edison SmartConnect® System ....................................................................................................2
C. Customer Engagement for Non-Residential Customers ........................3
2. Customer Engagement Requires Energy Information and Tools ................................................................5
3. Engaging Customers Is Crucial to the Implementation of Dynamic Pricing ..........................................5
D. Productivity and Operational Excellence ...............................................5
II. SUMMARY OF REQUEST FOR BUSINESS CUSTOMER SERVICES .........................................................................................................7
III. BUSINESS CUSTOMER DIVISION ...............................................................8 K. Devore
A. Description of Business Customer Division Activities .........................8
2. Structures and Improvements – Energy Education Centers (CCS-00-SI-BC-CT-00001 and CCS-00-SI-BC-AT-00001) .........................................................................49
a) Energy Education Center – Irwindale ..........................50
b) Energy Education Center – Tulare ...............................50
3. Specialized Equipment (CCS-00-SE-BC-PT-00001 and CCS-00-SE-BC-TS-00001)...............................................50
a) Engineering Tools and Equipment ...............................51
E. Business Customer Division Other Operating Revenues (OOR) ..................................................................................................51
IV. CUSTOMER PROGRAMS AND SERVICES ...............................................57 J. Lim
SCE-04: Customer Service Volume 03 - Customer Service and Information Delivery
Table Of Contents (Continued)
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A. Consumer Affairs, Customer Satisfaction, Marketing, Communications and Digital Delivery of Customer Services ................................................................................................57
B. Customer Programs ..............................................................................58 T. Walker
1. Description of Customer Programs ..........................................58
a) Energy Information and Management Programs ......................................................................58
b) Dynamic Pricing Programs ..........................................59
c) Other Customer Service Related Programs .................60
2. Base Year (2012) Operating Results ........................................61
a) Energy Management and Information Programs ......................................................................61
(1) Web Presentment of Interval Data ...................61
(2) Web Presentment of Cost Information ......................................................61
2. Business Planning ....................................................................80
a) Description of the Business Planning Function .......................................................................80
SCE-04: Customer Service Volume 03 - Customer Service and Information Delivery
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3. Customer Service Regulatory and Tariff Program Support .....................................................................................81
a) Description of the Regulatory and Tariff Support Function ..........................................................81
B. Operating Unit Management and Support Base Year Operating Results .................................................................................81
1. Summary of Recorded Costs (FERC Account 907.600) ...................................................................................81
2. Analysis of Historical Data (FERC Account 907.600) ...................................................................................81
C. Operating Unit Management and Support Test Year Expectations (FERC Account 907.600) ..............................................82
1. Determination of Test Year Estimating Methodology ............................................................................83
2. Test Year Adjustments .............................................................83
Appendix A Witness Qualifications ................................................................................
SCE-04: Customer Service Volume 03 - Customer Service and Information Delivery
List Of Figures
Figure Page
-ix-
Figure I-1 SCE’s New Customer Service Model .........................................................................................4
Figure III-2 Business Customer Division Recorded And Adjusted 2008-2012/Forecast
1 Business Customer Division 908.600 20,219 19,660 19,268 18,879 2 Customer Programs 908.640 5,584 5,637 5,891 6,655 3 Operating Unit Management and Support 907.600 6,809 6,375 6,198 6,156 4 Total Operating Expense 32,612 31,672 31,357 31,690
Line No.
Forecast
8
III. 1
BUSINESS CUSTOMER DIVISION 2
SCE’s Business Customer Division (BCD) has an important role in SCE’s efforts to engage and 3
serve our business customers. For most of SCE’s 4.4 million customers corresponding to 5.0 million 4
service accounts, helpful interaction and communication is provided through a variety of channels, 5
including monthly bills, SCE.com, mobile applications, the toll-free, 24-hour-a-day Customer Contact 6
Center, and in-person services. Using these channels, SCE can address most service-related issues, 7
billing inquiries, and other routine customer service inquiries as described in Volume 2 of this Exhibit. 8
BCD serves the needs of the non-residential customers, many of whom have more complex energy 9
issues, more complex billing, rate, and other customer care issues, and are very active in implementing 10
integrated demand side management (IDSM) measures. In order to meet these needs, BCD is staffed 11
with experienced professionals who are knowledgeable of the needs of non-residential customers; 12
familiar with the wide array of rates, products, and services designed for these customers; and maintain 13
and leverage strategic relationships with many of our larger customers. Engaging these customers is 14
essential to meeting state and federal energy policy goals as described above and in Volume 1 of this 15
Exhibit because non-residential customers—while comprising only about 294,000 customers 16
representing 683,000 service accounts—account for approximately 66 percent of the electricity 17
delivered over SCE’s distribution system. 18
In this Chapter, we describe the functions performed by BCD, describe the Base Year activities, 19
analyze the historical O&M expenses, and forecast the Test Year O&M expenses. As described in 20
Chapter I, beginning in the Base Year, we have reviewed and, where possible, optimized the way in 21
which we deliver our services to non-residential customers. In this Chapter, we describe the impact of 22
these actions on our Test Year forecast. We also present forecast capital expenditures for our Energy 23
Education Centers and specialized equipment used by BCD engineers and test personnel. Finally, the 24
forecast of Other Operating Revenues managed by BCD is described in this Chapter. 25
A. Description of Business Customer Division Activities 26
Business Customer Division Activities comprise an array of activities performed by SCE’s 27
Business Customer Division, including Account Management Services, Technical Services, Energy 28
Education Centers, Economic Development Services, Consumer Choice Services, and related support 29
9
activities. These activities are described in additional detail below. Costs associated with these 1
activities are recorded in FERC Account 908.600.4 2
1. Account Management Services 3
Account Management Services provides service and information to the 294,000 non-4
residential customers associated with 683,000 non-residential service accounts. The information 5
provided involves utility and energy-related matters that have financial and/or operational impacts on 6
our customers’ businesses. Approximately 3,600 customers representing 158,000 service accounts are 7
assigned a senior account manager or account manager because they are highly engaged in demand-side 8
management activities and encounter a higher degree of rate, metering, and billing complexities. These 9
assigned account managers are segmented according to industry, and where feasible, are located in SCE 10
facilities near the majority of their customers. These assigned customers account for approximately 44 11
percent of the electricity delivered over the SCE distribution system.5 The services and information 12
provided by the Account Management Services function are described in more detail below. 13
a) Descriptions of Account Management Services Activities 14
Account Management Services Activities consist of providing information and 15
account services to about 294,000 non-residential customers representing 683,000 service accounts, 16
including day-to-day responses to customer service needs on billing, tariffs, outages, distribution service 17
requirements, and other issues. Account managers also provide marketplace education, promotion and 18
delivery of demand response programs, and assistance in understanding and assessing the feasibility of 19
distributed generation. The Account Management Services function also assists customers with 20
identifying and implementing energy efficiency measures. The costs of these activities are charged to 21
energy efficiency programs and collected through the Public Goods Charge and are not included in this 22
General Rate Case request. 23
Account Management Services assigns resources as shown in Table III-3 below. 24
For medium and large customers, account managers are assigned to a designated group of customers and 25
4 In prior rate cases, activities described in the Business Customer Care section were presented separately in FERC
Accounts 903.700 (Customer Choice Services), 908.600 (Account Management), 906.610 (Energy Centers), 908.620 (Technical Services), and 908.630 (Economic Development Services). In this rate case, SCE has combined these activities into a single FERC account, consistent with how these activities are managed, in order to reduce the volume of O&M workpapers. Detailed descriptions are presented in this Volume consistent with our practice in prior General Rate Cases.
5 See workpaper entitled “SCE Customers, Accounts, Usage, and Revenue Summary By Account Description.”
10
serve as the first point of contact for customer communications and information. This communication is 1
made through educational mailings, faxes, e-mail, and in-person meetings and presentations. 2
These assigned customers are medium or large commercial and industrial 3
businesses or government and institutional entities. These customers include large retailers, property 4
owners and managers of office buildings, regional cold storage facilities, pharmaceutical firms, cement 5
companies, aerospace manufacturers, hospitals, schools, colleges and universities, and local, state and 6
federal governments, among others. These 3,600 assigned customers representing 158,000 service 7
accounts represent approximately 44 percent of the electricity delivered by SCE annually. 8
Customers are assigned to account managers based on several factors, including 9
IDSM activity and potential, complexity of rates, service arrangements involving customer substations 10
or advanced metering or interconnection requirements, geographical location, and type of industry. 11
Within market segments, the assignment of specific customers to account 12
managers is based on business and electric service complexity, with the most complex customers being 13
assigned to more experienced account managers. SCE’s practice is for newly hired account managers to 14
undergo four to six months of training before being assigned to specific customers. This training period 15
includes both classroom instruction and opportunities to work side-by-side with experienced account 16
managers and field engineers. This allows the knowledge transfer with existing personnel on customer-17
specific information and has resulted in providing customers with more knowledgeable and proficient 18
account managers who are then able to provide better service and more accurate and timely information. 19
To effectively match service delivery to customer needs, SCE established a mid-20
market account management team to provide service to medium and large customers who do not 21
extensively participate in IDSM activities but continue to have complex customer service needs. For 22
example, medium and large customers with service accounts with demand of 200 kW or greater are 23
required to default to Critical Peak Pricing (CPP) or select another rate and may have additional needs 24
for information and assistance as a result of the transition to mandatory Time-of-Use (TOU) rates. 25
These customers want to better understand how the CPP rate works and want to determine if it meets 26
their needs or if there are other rate options that might better meet their needs. Many demand response 27
programs and rates are targeted to these customers, such as the Base Interruptible Program (BIP), 28
Capacity Bidding Program (CBP), and Demand Bidding Program (DBP). 29
The mid-market account management team combines certain aspects of the 30
existing account management structure for larger customers with optimized delivery methods to cost-31
11
effectively meet the needs of their customers. The mid-market account managers provide customer care 1
to mid-market customers through SCE.com and targeted marketing materials and then engage these 2
customers by phone, e-mail, and mail whenever possible, using targeted face-to-face interactions based 3
on customer needs. 4
SCE also established the Business Solutions organization to provide service to 5
small to medium customers. These customers typically require limited customer care engagement and 6
have less complex rates and lower complexity in terms of business operations and energy needs. 7
Business Solutions account managers contact these customers by phone, e-mail, mail, and fax to 8
communicate rate changes, discuss the availability of optional rates and demand response programs, and 9
assist these customers with other questions or concerns. Business Solutions leverages customer specific 10
mailings and e-mail to introduce customers to their new account manager and to help them better 11
understand the programs and services available for their participation. 12
To support the activities of the account managers in the mid-market team within 13
Business Solutions, SCE established the Integrated Demand Side Management (IDSM) specialist team, 14
a group of technical experts assigned to provide customer care for specific IDSM opportunities. These 15
specialists do not have assigned customers in the traditional sense, but, when customers need assistance 16
with energy audits or specific energy efficiency projects, these specialists provide technical assistance, 17
while the mid-market and Business Solutions account managers continue to handle other customer care 18
needs. 19
BCD also has a group of account managers that use mass-market customer 20
outreach through ethnic, faith-based and community forums, special business events, energy walks, 21
strategic business organizations, and organized signature events in order to effectively reach our 22
Basis of AssignmentTypical Account Manager Assignment
Examples Typical Issues
(~ 1,000 customers / ~ 55,000 service accounts)
2(~ 2,000 customers / ~ 110,000 service accounts)
3
(~ 2,400 customers / ~ 18,700 service accounts)
4
(~ 6,500 customers / ~ 26,700 service accounts)
5
(~ 285,000 customers / ~ 492,000 service accounts)
Commercial customers and small to medium industrial customers
Bills, rates, power quality, economic development, outage communications, and demand response programs
Small to medium businesses that require limited customer care engagement through virtual channels
600-1,000 customers, 2,500 - 3,000 service accounts
Small and medium commercial and industrial customers
Bills, rates, economic development, outage communications, and demand response programs
Self-generation, Rule 18 sub-metering issues, requests for sub-transmission service, interruptible rates, service reliability, economic development, outage communications, power quality, environmental compliance, and demand response programs
Mid-Market Account Manager
Business Solutions Account Manager
Business Solutions Account Managers
Account Manager Large and medium businesses highly engaged in IDSM activities, complex business operations, but with less complex customer care issues, and less complex billing and metering requirements
40-110 customers, 250-3,000 service accounts
Fabricated metals, school districts, agricultural water agencies, large office buildings, medium retail chains, medium manufacturers, and regional cold storage facilities
Bills, rates, power quality, economic development, outage communications, and demand response programs
Medium and large businesses with less complex operations and fewer service accounts that require moderate customer care engagement through virtual or telephone-based interactions
Senior Account Manager
Unassigned small customers whose customer service needs can be met primarily through the Customer Contact Center
Unassigned Small and many medium businesses
Bills and rates, with much of the focus on reducing bills
200-275 customers, 800-1,000 service accounts
Resource
1 Large and medium businesses highly engaged in IDSM activities, complex business operations, significant customer care, and complex billing and metering requirements
10-100 customers, 100-3,000 service accounts
Federal, state, counties, and, cities, national retail chains, large manufacturers (including steel and cement), large hospitals and colleges
13
(1) Rate Analysis Information and Education 1
Approximately 135, or nearly 70 percent, of SCE’s electric rates apply to 2
the non-residential customers served by BCD, so these customers have a wide range of rate and billing 3
options from which to choose to best meet their business needs.6 Most demand response programs and 4
rates currently apply only to non-residential customers, with particular emphasis on agricultural 5
accounts and other non-residential service accounts with over 200 kW in energy demand. It is important 6
to assist these customers in understanding the impact that various rate options may have on their 7
operations and to help them make informed decisions about their energy usage, costs, and rate choices. 8
Although many commercial and industrial customers receive electric service on general service or basic 9
agricultural rates, customers who have accounts with demand of 200 kW and above are required to be 10
served on TOU rates. These customers also have a greater number of rate options and variations. With 11
the installation of ESC meters and the availability of 15-minute interval data, all non-residential 12
customers with at least 12 months of billing history after their ESC meter was installed will be required 13
to be served on TOU rates beginning in 2014. These customers will also be able to participate in a 14
wider range of demand response programs. SCE expects these non-residential customers with demands 15
under 200 kW will have questions and many of the same needs as those customers with demands 16
between 200-499 kW in 2009, when interval meters were deployed and TOU rates first became 17
mandatory for those customers. The numerous rate options, rate complexities, and changing rate 18
structures require SCE’s account managers to provide timely, ongoing communications, and rate 19
analysis information to meet the needs of our non-residential customers. 20
TOU rate options are designed to provide more accurate price signals to 21
enable customers to reduce or shift energy usage to lower-demand times of day. As a result of 22
implementing these time-differentiated rates and because of related billing factors such as facility-23
related and time-related demand charges, customers increasingly request assistance from their account 24
managers to better understand time-related energy usage concepts and how applicable rate schedules 25
may work within their operations. For example, customers with over 200 kW of demand may choose to 26
participate in demand response programs or rate options such as Real Time Pricing (RTP), Summer 27
Advantage Incentive (also known as Critical Peak Pricing or CPP), the Base Interruptible Program, the 28
Demand Bidding Program, or the Capacity Bidding Program, as well as various TOU seasonal options. 29
6 See workpapers for a list of SCE tariff schedules organized by customer sector.
14
With the full deployment of ESC meters, customers with service accounts with demands below 200 kW 1
now have access to the same demand response programs and rate options as larger customers. 2
Customers continually and increasingly rely on their account managers to 3
provide consultation and detailed rate analysis information, so they have the necessary information to 4
select the rate and program options optimally suited to their operations, and so they can better 5
understand the differences in rate and program benefits based on their energy usage. In most cases, 6
account managers are able to help customers make decisions by conducting account energy usage 7
reviews and by explaining tariff requirements and other factors, such as firm service levels and voltage 8
levels. In other cases, more complex rate analyses are performed as part of the Technical Services 9
function to give customers a more detailed, unbiased view of their rate options for business decision-10
making purposes. BCD’s Technical Services function is described below in Section III.A.2. 11
(2) Billing and Metering Inquiries 12
Billing and metering questions frequently arise for midsize and larger 13
customers. These questions are due in part to the variety of available metering, billing, rate options, and 14
programs for these customers. Most issues concerning metering options are generally identified in the 15
billing process. When billing and metering issues arise for non-residential customers, the process of 16
investigating and resolving issues is often time- and labor-intensive and cannot be effectively conducted 17
by a Customer Contact Center or field service representative. SCE account managers assist customers 18
with issues involving energy charges, usage calculations, billing factors, metering operations and 19
accuracy, and meter reads by initiating investigations and coordinating issue resolution. 20
Midsized and larger customers are generally more knowledable about 21
energy issues and are readily able to identify the impact of rate changes and increases on their 22
businesses. For example, one of SCE’s larger customers has over 20,000 service accounts. Due in part 23
to the proactive steps taken by BCD’s account management team, this customer has aggressively 24
pursued cost-effective rates, adopted energy efficiency measures, and participated in demand response 25
opportunities. In addition, most of this customer’s service accounts use electronic data interchange for 26
easier bill management and payment. 27
(3) Credit Issue Information 28
When credit issues emerge for non-residential customers, SCE’s credit 29
administrators and financial analysts depend on account managers to facilitate communications with 30
customer decision makers and provide specific knowledge of the customer to help make determinations 31
15
on credit issues and the appropriate actions to be employed. Account managers also serve as key 1
contacts for educating customers on the rules surrounding credit policies and the need to keep accounts 2
in good standing, negotiating deposits and financial security arrangements with financial decision 3
makers, and helping customers understand payment terms in order to ensure their business operations 4
are not adversely impacted. 5
SCE’s credit administrators may request assistance from account 6
managers in resolving credit issues, such as communicating changes in customer account status, 7
resulting in security deposit or collateral requirements, or assisting with negotiations to recover amounts 8
in arrears. Because of their ongoing relationships with customers, account managers have proven 9
effective in interacting with our customers’ senior financial officers to explain late payment charges, 10
security deposits, and other issues related to financial risk, and with assisting in developing solutions in 11
these situations. For example, in 2012, an account manager worked closely with SCE’s credit 12
organization in negotiating payment terms with a local medical facility to resolve an arrears balance in 13
excess of $200,000. Because of the strong working relationship between the account manager and the 14
customer, the hospital offered payment arrangements to pay off the arrears within 180 days. 15
Additionally, the hospital agreed to pay its electricity bills from SCE on a weekly basis going forward. 16
(4) Power Quality Information 17
In today’s digital age, it is increasingly important for customers to receive 18
dependable, reliable electricity service. Computerized controls are more sensitive than conventional 19
electro-mechanically controlled equipment. Generally, power quality problems tend to occur on the 20
customer side of the meter. Nevertheless, the customer often looks to SCE first to determine whether 21
the problem resides in SCE’s distribution system. The account manager can initiate and coordinate an 22
analysis of the power quality delivered to the customer and can help solve any problems discovered 23
from that analysis, whether the problem lies with SCE’s equipment or the customer’s equipment. 24
For example, in 2012, a circuit board manufacturer contacted its BCD 25
account manager about slight variations in electric service impacting its operations due to its production 26
equipment’s extreme sensitivity to power and voltage disturbances. Whenever a disturbance occurred, 27
the customer would incur significant quantities of damaged and unusable product. Frustrated by the 28
issue, the customer engaged the account manager, who partnered with the appropriate engineers and 29
transmission and distribution experts to help identify the problem. After performing a series of tests and 30
monitoring the production equipment, the team determined the disturbances were occurring sporadically 31
16
for microsecond durations and could not be eliminated from SCE’s distribution system. The engineers 1
recommended solutions to mitigate the problem, and the account manager worked with the customer to 2
help the customer understand the results of the tests and the potential options. 3
(5) Energy Advisor / Marketplace Communication 4
Account Management Activities focus on providing important and timely 5
information on a wide range of energy-related issues to assist customers in making informed energy-6
related business decisions. Larger customers with assigned account managers often employ “in-house” 7
energy managers or skilled personnel specifically designated to address energy-related issues. These 8
customers tend to be more knowledgeable about energy usage, require more frequent updates on the 9
energy marketplace, and want detailed information about energy supply-and-demand issues, forecast 10
reserve margins, and the impacts of regulatory proceedings and decisions. For these customers, as well 11
as those without in-house energy managers, SCE develops and delivers information at regular intervals 12
to address these concerns. These types of services will become increasingly important as all smaller 13
non-residential customers transition to mandatory TOU rates and begin to experience different rate 14
options. These publications and informational materials are produced within BCD’s Technical Services 15
organization and are discussed further in Section III.A.2. 16
(6) Demand Response Information 17
As outlined in the state’s Energy Action Plan II adopted by the California 18
Public Utilities Commission and the California Energy Commission, energy efficiency and demand 19
response have the highest priority in the loading order to meet increased electrical demands, ahead of 20
traditional generation or supply resources. 21
SCE’s demand response programs have undergone significant changes in 22
the past few years, including the Critical Peak Pricing program, Summer Discount Plan, Capacity 23
Table III-7 Description of SCE’s Energy Education Center – Irwindale Facilities
Line No.
Facility Description of Facility Customer Segment
1. Innovation Center
Compressed air, industrial lighting and daylighting technologies, cool roofs, energy management systems, demand response, window glazing, electric motors and drives, fans and HVAC systems
2. Sustainability CenterSustainable building design and operations, chilled water systems, daylighting, energy-efficient lighting, daylight harvesting
3. Programs and ServicesDisplays on lighting technologies, integrated demand side management, program literature and information
4. Daylight CenterDaylighting and solar responsive lighting/dimming controls, lighting technologies
5.Electro-Magnetic Fields (EMF)/Power Quality
An interactive educational center featuring EMF exhibits and power quality mitigation exhibits
6. Lighting ClassroomDisplays on various energy-efficient lighting technologies and applications, daylight simulator, color booths
7. Computer Lab
Provides computer-based training on SCE’s computer-based energy services such as SCE EnergyManager, demand bidding, and software that supports the Savings By Design program, and building codes and standards
8. Irwindale Conference Center
103-seat capacity, theater-style conference center for events and seminars that showcases state-of-the-art audio-visual equipment and energy-efficient lighting technologies
9. Smart Energy ExperienceInteractive exhibit for smart grid technologies, residential demand response, energy efficiency, sustainable design
Residential and small business
10. Foodservice TechnologyEfficient and environmentally friendly electric cooking and food preparation equipment
Commercial and institutional food service
11. Wet Cleaning DemonstrationEnergy-efficient and environmentally friendly alternatives to the standard method of dry cleaning garments with perchloroethylene (PERC)
Small and medium commercial and industry
trade groups
12.
Solar Photovoltaic Demonstration and Plug-In Electric Vehicle (PEV) Charging Area
Over 2,000 square-foot structure to demonstrate photovoltaic technology. Demonstration also includes the latest PEV charging technology. PEV charging is available to the public. Supports the statewide and SCE solar and EV programs and initiatives
13. Outdoor Demonstrations
Outdoor demonstrations showcase drought tolerant landscaping, outdoor lighting technologies, street lighting, renewable generation (solar, wind), sustainability, and conservation applications
Small, medium, and large commercial and industrial
Residential, small, medium, and large commercial and
industrial
Small, medium, and large commercial and industrial, residential, and agricultural
31
Table III-8 Description of SCE’s Energy Education Center – Tulare Facilities
Line No.
Facility Description of Facility Customer Segment
1. Outdoor Demonstration Area
3.5 acre outdoor demonstration area showcasing pumping and irrigation technologies, outdoor lighting technologies, street lighting, renewable generation (solar, wind), and sustainability and conservation applications
2.Main Exhibit Hall and Information Center
General exhibit area that can host up to 250 customers for energy efficiency seminars and events. Numerous hands on displays and exhibits that support seminars in HVAC, lighting, building codes and standards, programmable logic controls, pumping, motors, and food service. Customer brochures, program calendars, and other collateral material in support of the educational objectives of the EECs
3. Business CenterNine-station computer lab with a technology information library on a variety of energy-related subjects
4. Learning Center A, B, and C
Classrooms equipped with audio-visual capabilities to create an effective learning environment for customers, providing opportunities to share educational materials with offsite locations via video conferencing
5. Professional Lighting Lab
Center for classroom and meeting activities featuring informational lighting exhibits on energy conservation and power outage preparedness. Showcase of cost-effective commercial and retail lighting technologies and demonstration of the value of a lighting management system
6. Annex Building5,000 square-foot facility for classroom and meeting activities with video conferencing capabilities
7. Sustainability Building3,200 square-foot facility for showcase and demonstration of various industrial and commercial technologies and for seminar activities
8.Solar Photovoltaic Demonstration Area
Demonstration of solar photovoltaic (PV) technology. PV demonstration display featuring three different technologies of PV panels to support statewide and SCE solar programs and initiatives
9. Technology Training Center4,880 square-foot building constructed with energy-efficient structural insulated panels (SIP) to serve as a training and exhibit area for HVAC professionals
Small, medium, and large commercial and industrial, and
agricultural
Small, medium, and large commercial and industrial, residential, and agricultural
b) Energy Education Centers Base Year Operating Results 1
In 2012, the EECs conducted multiple sessions of 35 unique O&M funded 2
customer classes on such topics as power quality fundamentals, electrical safety, industrial maintenance, 3
and electrical system analysis. In addition, both EECs conducted 1,284 O&M-funded events attended 4
by a total of 14,251 customers. An additional 404 class sessions were presented on energy efficiency 5
32
topics and were funded through the Public Goods Charge (PGC). These PGC-funded classes are not 1
included in this GRC request. 2
The demand for educational programs and events continues for both EEC-3
Irwindale and EEC-Tulare, particularly for seminars and training on HVAC, programmable logic 4
controllers (PLC), and building envelope technology. To meet this continued demand, SCE constructed 5
an additional 4,800 square-foot facility at EEC-Tulare to support hands-on training, workshops, and 6
working displays for HVAC technicians and upstream market participants, such as engineers, architects, 7
and developers. 8
The EECs evaluate and adjust operations as needed to maintain technological 9
relevance in course offerings, displays, and facilities to keep pace with ongoing market and technology 10
advancements. In 2012, EEC-Irwindale completed upgrades and additions, including the installation of 11
new videoconference equipment and infrastructure improvements in essential customer areas, the 12
installation of a 22 kW solar photovoltaic array/carport parking area along with eight level-2 electric 13
vehicle charging units, and the completion of the buildout of the interactive exhibit showcasing smart 14
grid technologies, demand response, energy efficiency and distributed generation technologies, 15
programs, and services. In 2012, EEC-Tulare completed upgrades and additions, including the 16
installation of 70 kW of solar photovoltaic generation. While these upgrades and additions were capital-17
funded, they support the overall mission of the EECs. 18
c) Analysis of Historical Data 19
The recorded/adjusted costs for the EECs shown in Table III-9 were derived after 20
analyzing recorded costs for these activities and adjusting them to reflect ongoing business operations. 21
In 2010, labor increased by $233,000 due to personnel added in late 2009 to 22
perform schedule planning, display, and design-related activities. In 2011, labor decreased by $388,000 23
33
because of vacancies that were not filled and employees on temporary work assignments. In 2009, non-1
labor expenses increased $180,000 because of video conferencing costs, demolition expenses related to 2
the customer demonstration center, new products and services, and display and furniture replacement. 3
Non-labor costs decreased in 2011 through 2012 because of the implementation of operations 4
optimization efforts that included an overall reduction in events and supporting expenses and a reduction 5
in employee-related expenses. Part of this reduction in non-labor is a result of the implementation of the 6
EEC’s Event Business Management System (EBMS). This new technology-based customer 7
management interface enables easier online registration for seminars and workshops. It streamlines 8
access to key offerings and enables the integration of web-enabled, on-demand training, resulting in 9
greater efficiencies in event scheduling and training delivery. 10
d) Energy Education Center Test Year Operating Expectations 11
In the 2015 Test Year, SCE expects to continue EEC activities at the same level 12
as the Base Year. As in the Base Year, these activities will include promoting energy conservation, 13
environmental solutions, power quality, sustainable building design, renewable generation, greenhouse 14
gas reduction, and marketplace education through seminars, workshops, displays, demonstrations, and 15
collateral materials. As a result, SCE is not forecasting a change in the O&M expenses for this activity 16
in the Test Year. 17
4. Customer Choice Services 18
The Customer Choice Services (CCS) organization facilitates Energy Service Provider 19
(ESP) and Community Choice Aggregator (CCA) participation in the Direct Access (DA) and potential 20
Community Choice Aggregation markets in the SCE service territory and provides appropriate oversight 21
of ESPs’ and CCAs’ day-to-day interactions with SCE. Both ESPs and CCAs are primarily responsible 22
for procuring and providing for the electric power needs (including ancillary services) of their 23
customers, ensuring resource adequacy and renewable portfolio requirements are met for those 24
customers, and scheduling and settling with the California Independent System Operator (CAISO). 25
Although the Commission suspended DA for new customer enrollment in September 26
2001, Senate Bill (SB) 695 partially re-opened DA in 2009 on a limited basis to retail non-residential 27
customers. In 2010, the Commission issued D.10-03-022 to revise the new rules in accordance with SB 28
695. 29
Community Choice Aggregation was enabled by Assembly Bill (AB) 117, which was 30
signed into law in September 2002, allowing cities, counties, and Joint Power Authorities (JPAs) 31
34
comprised of cities and/or counties, to act as CCAs to purchase and sell electricity on behalf of utility 1
customers within their service area(s). In 2004 and 2005, the Commission issued D.04-12-046 and 2
D.05-12-041, respectively, to implement the rules for the CCA program. 3
a) Description of the Customer Choice Services 4
CCS maintains ongoing business-to-business relationships with ESPs that serve 5
customers in our service territory and with potential CCAs. This SCE-ESP and SCE-CCA business 6
relationship is achieved through an account management approach, similar to our relationships with 7
medium and large non-residential customers who have more complex needs, rates, and service 8
arrangements, whereby a CCS account manager is assigned to each ESP and CCA. These account 9
managers act as a single point of contact and have access to other SCE personnel to resolve service-10
related issues. Because communication and operational issues with ESPs and CCAs differ significantly 11
from those of SCE’s end-use customers, this approach provides services and information tailored to their 12
needs. Responding to information requests and questions from ESPs requires specific knowledge and 13
experience to handle tasks, such as registration of new ESPs, the DA lottery enrollment process, 14
relocations, assignments, switching allowed under the DA suspension rules, and the implementation of 15
processes arising from the ongoing regulatory decisions related to direct access. 16
CCAs have many of the same processes for enrolling and returning individual 17
customers to the utility for bundled service, but they also have a number of different processes due to the 18
“opt-out” nature of a CCA. To facilitate this market, SCE expects to provide services to CCAs similar 19
to those provided to ESPs, serving as the single point of contact for CCA inquiries and day-to-day 20
requests with SCE, maintaining the ongoing business-to-business relationships with prospective and 21
current CCAs, providing customer-related reports to the CCAs, and responding to billing and credit-22
related inquiries once a CCA is in operation. 23
The key functions performed by the CCS organization are Contract Management, 24
Account Management, and Service and Support, as described below. 25
(1) Contract Management 26
The contract management function includes developing and providing 27
information for ESPs and CCAs on how to do business with SCE, facilitating the ESP and CCA 28
enrollment processes, completing the necessary documents and agreements, establishing ESP and CCA 29
contracts and accounts in the SCE system, and providing ongoing administration and contract 30
management. This function also includes compliance testing, data transmission, internal and external 31
35
communications, managing and maintaining the CCS website and internal DA and CCA intranet sites, 1
and updating information provided to ESPs and CCAs in SCE’s territory. CCS’s website is an essential 2
component of daily operations and provides information to these providers. The site contains 3
information such as load factors, distribution loss factors, data exchange guides and tools, and the most 4
current SCE or market business process updates that are required for the daily functions performed by 5
ESPs and CCAs. CCS also provides updated DA information for the ESPs and for customers on the 6
status of the annual lottery customer enrollment process.12 CCS further verifies that ESPs and CCAs are 7
adhering to DA and CCA tariff requirements.13 8
(2) Account Management 9
The account management team builds and maintains business relationships 10
with ESPs and CCAs in order to facilitate the market and business-to-business transactions with SCE. 11
The majority of the questions involve DA customers switching to and from DA service, relocating 12
accounts, or assigning DA eligibility to other customers. CCS DA activity increased as a result of the 13
partial reopening of DA. CCS account managers educate ESPs on the requirements of the decisions and 14
the processes that SCE employs during the enrollment period. Account managers also provide updates 15
and address regular inquiries from current and potential ESPs regarding SCE process changes stemming 16
from new Commission direct access rulings and decisions, such as the partial re-opening of DA and the 17
process improvements for administering enrollments of direct access rights authorized in D.10-03-022 18
and D.12-12-026, respectively. 19
CCS account management responds to inquiries from current and potential 20
CCAs and helps ensure that SCE meets its obligations with the CCA during start-up, the establishment 21
of service for individual service accounts, and throughout the implementation process. 22
Daily contact is made with ESPs and CCAs through a variety of methods, 23
including telephone, e-mail, direct mail, and in-person meetings. 24
(3) Service and Support 25
The service and support function provides ongoing, daily operational 26
assistance to ESPs and CCAs. This function serves as a single point of contact to handle the day-to-day 27
12 The modification of the DA enrollment process to a Random Number List Switching and Enrollment “Annual Lottery”
process was specified in D.12-12-026.
13 General Obligations of ESPs are prescribed in Rule 22. CCA tariff requirements are contained in Rule 23 – Community Choice Aggregation and Rule 23.2 – Community Choice Aggregation (CCA) Open Season.
36
requests from ESPs and is expected to fulfill the same role for CCAs. The service and support group 1
receives ESP and CCA inquiries through inbound calls and e-mails and typically handles less complex 2
but higher volume inquiries requiring analysis and research, such as DA service request status, DA 3
eligibility status, billing concerns, credit concerns, and payment inquiries. The service and support 4
group interacts with the DA support groups in the Customer Contact Center, the Revenue Services 5
Organization, and the Meter Services Organization (Engineering, Meter Shop, and Field Services). 6
Additionally, the service and support group coordinates and manages electronic data exchanges with 7
ESPs. 8
b) Customer Choice Services Base Year Operating Results 9
In 2012, CCS continued to perform the contract management, account 10
management, and customer service and support activities described above. 11
(1) Electric Service Provider and Direct Access Activities 12
As of December 31, 2012, there were 16 active ESPs operating in SCE’s 13
service territory, serving about 29,000 DA service accounts, accounting for 10.9 billion kWh annually or 14
12 percent of SCE’s total distribution load. In comparison, on December 31, 2009, there were 15 active 15
ESPs and 19,000 DA service accounts, accounting for 7.8 billion kWh annually or nine percent of 16
SCE’s total distribution load. 17
The highest volume activity in CCS relates to transactions involving DA 18
customers returning to bundled service or DA-eligible accounts switching to DA from bundled service. 19
DA customers also have various options to switch between ESPs, relocate service accounts, and add 20
new facilities. As a result, many ESPs continue to request assistance to facilitate these transactions and 21
resolve issues raised by market participants with respect to how these transactions are to be completed 22
within the DA rules. In 2012, the CCS account management and the service and support groups handled 23
an estimated 100 calls and more than 1,400 e-mail communications and requests, which required 24
analysis and/or research to complete. SCE continues to receive Customer Information Service Requests 25
(CISRs) from ESPs. CCS provides the requested information for these service accounts, including 26
meter number, billing cycle, and load profile. In addition, CCS provides training to existing and new 27
ESPs that currently, or will soon, conduct business with SCE. In 2012, CCS worked with 13 new ESPs 28
to review the regulations, tariffs, and procedures to operate in California, and SCE expects continued 29
interest in the DA market. 30
37
In 2012, CCS also began preparing to implement the Random Number 1
List Switching and Enrollment “Annual Lottery” process, which replaced the previous first-come, first-2
served DA enrollment process, as specified in D.12-12-026.14 3
(2) Customer Choice Aggregation Activities 4
During the past several years, many cities and counties in SCE’s service 5
territory have explored the formation of a CCA. Through 2012, only the San Joaquin Valley Power 6
Authority had filed an implementation plan with the Commission.15 The CCS team continues to work 7
with interested cities, counties, and JPAs to respond to questions, provide information about CCA, and 8
provide aggregated and customer-specific information to municipalities that are exploring or considering 9
formation of a CCA. When requested, customer information is provided in accordance with the CCA-10
INFO tariff adopted by D.04-12-046. 11
c) Analysis of Historical Data 12
The recorded/adjusted costs for Customer Choice Services as shown in Table III-13
10 were derived after analyzing recorded costs for this activity and adjusting them to reflect ongoing 14
For the period 2008-2012, Customer Choice Services operating expenses 16
remained relatively stable, with the labor and non-labor expenses fluctuating in 2010-2011 due to the 17
temporary use of contract employees to support this activity due to employees who were on leave of 18
absence. In 2011, labor and non-labor expenses returned to historical levels as temporary contract 19
14 The Random Number List Switching and Enrollment “Annual Lottery” process was implemented in April 2013.
15 In September 2012, the San Joaquin Valley Power Authority was dissolved.
38
employees were converted to SCE employees. In 2012, non-labor decreased due to a reduction in 1
temporary contract employees and employee-related expenses. 2
d) Customer Choice Services Test Year Expectations 3
SCE does not expect DA activity to significantly increase costs for CSS. If future 4
laws or Commission decisions related to DA or CCA have a significant impact on CCS activities, SCE 5
expects that any additional costs associated with the outcomes of these regulatory proceedings would be 6
addressed in the appropriate regulatory forum as directed by the Commission. 7
SCE plans to continue to respond to public entities who are contemplating the 8
formation of a CCA, although the likelihood of CCA formation in SCE’s service territory in 2015-2017 9
continues to be uncertain.16 10
In the 2015 Test Year, SCE expects to continue Customer Choice Services 11
activities at the same level as the Base Year. As a result, SCE is not forecasting a change in the O&M 12
expenses for this activity in the Test Year. 13
5. Economic Development Services 14
SCE’s Economic Development Services (EDS) supports the regional economy and 15
benefits SCE’s ratepayers by helping to retain, grow, and attract commercial and industrial customers. 16
Since 1992, as demonstrated through the application of the Ratepayer Impact Mechanism (RIM) test, 17
EDS has provided a direct benefit to all SCE customers by helping to reduce rates by minimizing 18
stranded investment in assets and increasing recovery of fixed revenue requirements. SCE’s EDS 19
activities yield economic and fiscal benefits to California, as well as to the counties and cities served by 20
SCE, by helping to keep jobs in the state. 21
a) Descriptions of the Economic Development Services Function 22
SCE’s EDS group benefits ratepayers by retaining and expanding at-risk 23
businesses, attracting businesses in growth industries through various activities, including administering 24
SCE’s Economic Development Rate (EDR), providing leadership on initiatives that strengthen 25
California’s business infrastructure, and working with state and local economic development 26
16 Other Operating Revenue (OOR) derived from DA service fees is discussed in SCE-04, Volume 2. Due to the
uncertainty surrounding the formation of CCAs in the future, SCE has not included either the costs that would be incurred to provide services to CCAs and CCA customers or the associated OOR derived from CCA service fees. Should a CCA form, SCE expects that the OOR derived from CCA Service Fees would offset the majority of the costs associated with providing services to the CCA and impacted customers.
39
organizations. EDS activities are separated into two primary activities: Project Management and 1
Business Development. 2
(1) Project Management 3
EDS project managers work in conjunction with BCD’s account 4
management organization, as well as local, regional, and state representatives to identify and assist in the 5
retention and expansion of “at-risk businesses.” Project managers also assist in the attraction of new 6
businesses in growth industries to replace the recorded net losses of manufacturing facilities due to 7
either closure or migration out of SCE’s service area. 8
(2) Business Development 9
The business development team enhances project management efforts 10
through specific activities, such as providing marketing and collateral materials and communications to 11
Prior Year Total 517$ 191$ 191$ Change (326)$ -$ -$
Recorded Forecast
-
200
400
600
800
1,000
1,200
2008 2009 2010 2011 2012 2013 2014 2015
57
IV. 1
CUSTOMER PROGRAMS AND SERVICES 2
SCE’s Customer Programs and Services (CP&S) Division leads SCE’s efforts to engage and 3
serve its customers through three distinct functions. First, the Consumer Affairs and Customer 4
Satisfaction function gathers and receives feedback from SCE’s customers to answer customer inquiries, 5
resolve consumer complaints, and improve our programs and services. Second, the Marketing, 6
Communications and Digital Delivery of Customer Services function educates and helps SCE’s 7
residential and non-residential customers make informed decisions about rates, programs, and services 8
that benefit them. Third, the Customer Programs function develops, implements, and manages many of 9
SCE’s programs and services. The Consumer Affairs and Customer Satisfaction function and the 10
Marketing, Communications and Digital Delivery of Customer Services function are presented in 11
Volume 2 of this exhibit. Their applicability to non-residential customers is described briefly below. 12
The Customer Programs function, along with an analysis of its recorded and forecast O&M costs, is 13
described below. 14
A. Consumer Affairs, Customer Satisfaction, Marketing, Communications and Digital 15
Delivery of Customer Services 16
SCE’s Consumer Affairs and Customer Satisfaction function is described in Volume 2, Chapter 17
VII, of this Exhibit. Although the majority of activities undertaken in this function address the needs 18
and concerns of our 4.1 million residential customers, non-residential customers also benefit from these 19
activities. For example, approximately 15% of the inquiries and complaints handled by Consumer 20
Affairs originated from non-residential customers, primarily small businesses. The Customer 21
Satisfaction function’s effort to identify and implement improvements to SCE’s services also benefits 22
non-residential customers. For example, SCE’s efforts to improve outage management communications, 23
led by the Customer Satisfaction function and described in detail in Volume 2, Section VII.B.2, benefit 24
all non-residential customers who may be impacted by planned or unplanned outages. As a result of the 25
efforts undertaken by the Customer Satisfaction function in the Base Year, non-residential customers 26
now receive automated messages for both planned and unplanned outages, greatly expanding the 27
proactive communications about outages affecting them. 28
SCE’s Marketing, Communications and Digital Delivery of Customer Services function is 29
described in Volume 2, Chapter VIII, of this Exhibit. Like the Consumer Affairs and Customer 30
Satisfaction function, many of the activities undertaken by the Marketing, Communications and Digital 31
58
Delivery of Customer Services function benefit SCE’s non-residential customers. For example, as part 1
of SCE’s comprehensive annual summer conservation campaign, SCE conducted outreach to small 2
businesses through print ads, digital, and outreach communication materials supplied for sponsored 3
community events to help small businesses prepare for the high temperatures of the summer months. 4
These efforts are described in more detail in Section VIII.A.2 of Volume 2 of this exhibit. 5
SCE’s Digital Delivery of Customer Services function manages SCE’s digital presence through 6
SCE.com, including many self-service tools that allow residential and non-residential customers to 7
conduct business with SCE online, including checking their account balances and paying their bills. In 8
2012, SCE improved the accessibility of SCE.com so that 80 percent of its content is now available in 9
Spanish, Chinese, Vietnamese, and Korean, which is expected to benefit small business owners who are 10
more comfortable conducting business in these languages. These efforts are described in more detail in 11
Section VIII.B.2 of Volume 2 of this exhibit. 12
B. Customer Programs 13
The Customer Programs function develops, implements, and manages many of SCE’s programs 14
and services. These activities, performed by SCE’s Customer Programs and Services (CP&S) 15
organization, are described in detail below and costs related to these activities are recorded in FERC 16
Account 908.640. 17
1. Description of Customer Programs 18
The Customer Programs function combines activities related to developing and delivering 19
SCE’s portfolio of programs. Currently, this portfolio consists of energy information and management 20
programs, such as Budget Assistant and SCE EnergyManager. The Customer Programs function is also 21
responsible for managing SCE’s dynamic pricing programs and portfolio of Energy Efficiency (EE) and 22
Demand Response (DR) programs, which are funded through the Public Goods Charge or Demand 23
Response Balancing Account and are not included in the O&M forecast in this Application except as 24
noted below in Section 1b. Finally, this function also leads the development of new customer service 25
related programs and services, e.g., SCE’s Pre-Payment program (described in Volume 2 of this Exhibit) 26
and pilots/programs that help customers adopt new technology (like HAN and energy management). 27
a) Energy Information and Management Programs 28
Deployment of ESC meters was completed in the Base Year for residential and 29
commercial customers with demands less than 200 kW. ESC provides SCE the ability to more actively 30
engage customers in managing their energy use and expense. Central to engaging customers with the 31
59
information and services to better manage their energy usage is providing them with a suite of tools that 1
serve to enhance their understanding of the correlation between energy usage and their electric bill. 2
These tools include daily usage and cost calculations, projected cost and usage calculations, and Budget 3
Assistant, which offers proactive outbound cost information to help customers more actively manage 4
their energy budget. 5
For customers with demands greater than 200 kW, SCE continues to offer the 6
SCE EnergyManager program. This program is a web-based application that participating customers 7
can use to access their energy and demand data, as well as usage, cost, and billing reporting tools. 8
In addition to SCE’s energy information and management programs and services, 9
we will enable certain third-party services and facilitate customer access to services offered by other 10
market participants. For example, through our proposed ESPI platform, we will enable customers to 11
authorize us to provide a customer’s usage data to a third-party energy management service provider in 12
an automated fashion.20 13
b) Dynamic Pricing Programs 14
Dynamic pricing (or time-differentiated) programs and rates include Time-of-Use 15
(TOU) Rates, Critical Peak Pricing (CPP, also known as the Summer Advantage Incentive program), 16
and Real-Time Pricing (RTP) options. The primary purpose of these programs and rates is to provide 17
appropriate pricing signals to customers, prompting them to reduce their energy consumption during on-18
peak periods or shift their consumption to off-peak periods. Prior to the deployment of the ESC meters, 19
a meter change was required in order to accommodate customers with demands less than 200 kW 20
choosing to take service under a time-differentiated rate plan. With SCE’s ESC meters fully deployed, 21
these rate options are now immediately available to the vast majority of residential and business 22
customers. 23
In D.09-08-028, SCE was directed to file a proposal to implement additional 24
default or optional dynamic pricing rates and mandatory TOU rates for certain non-residential and 25
residential customers, which the Commission ordered to be effective in January 2012. The 26
implementation of dynamic pricing rates was delayed in SCE’s 2012 GRC Phase 2 proceeding, and, in 27
D.13-03-031, the Commission directed SCE to begin the transition of eligible non-residential customers 28
20 SCE’s proposed ESPI platform is described in Application for Approval of Proposal to Enable Automated Access of
Customer Usage Data to Authorized Third Parties and Approval of Cost Recovery Mechanism (A.12-03-004). As of May 31, 2013, no Decision has been issued in this proceeding.
60
with demands less than 200 kW to mandatory TOU rates beginning in January 2014 and to default CPP 1
in 2016. Furthermore, in D.12-04-045, the Commission found that dynamic pricing rates should be 2
included in the utilities’ General Rate Cases, and, although it approved funding for CPP <200kW, CPP 3
≥200kW and RTP for the 2014-2014 Demand Response budget period, the Commission ordered those 4
programs not be included in future Demand Response applications. Accordingly, SCE includes those 5
program costs in this application.21 6
c) Other Customer Service Related Programs 7
In addition to energy information and management and dynamic pricing 8
programs, the Customer Programs function also develops, pilots, and manages other customer service 9
related programs. A primary program that this function manages is the Renewable Tariff and 10
Interconnection Program, which is designed for customers who are interested in renewable generation, 11
particularly solar energy. In terms of program development activity, this function actively assesses the 12
portfolio of programs and services that SCE offers its customers and looks for opportunities to enhance 13
existing or add new programs to address evolving customer needs. An example of the type of 14
opportunities this function assesses is the expansion of billing and payment programs. Additionally, 15
with the emergence of new technologies, this function is responsible for testing and piloting new 16
technologies and identifying opportunities to integrate these technologies into existing program 17
offerings or to develop new programs that encourage customer adoption of new technologies. Emerging 18
technology areas of focus include HAN, solar, and PEV. 19
As part of the program development, implementation, and management activities, 20
the Customer Programs function coordinates with Customer Service operating organizations (e.g., the 21
Revenue Services Organization described in Volume 2 of this Exhibit), Regulatory, Legal, and Financial 22
organizations throughout SCE to ensure the successful development and implementation of new 23
customer programs. The function also partners with the Marketing and Communications function to 24
21 In SCE’s 2012 GRC Decision (D.12-11-051), the Commission directed SCE to track Dynamic Pricing expenses
recovered through the GRC and report them in this GRC. See D.12-11-051, Ordering Paragraph 25, p. 885. In 2012, Dynamic Pricing expenses were recorded in the ESC Balancing Account (ESCBA), consistent with the Commission’s direction. See D.12-11-051, p. 350. Therefore, no Dynamic Pricing expenses were recorded and recovered through the GRC in 2012. As of the filing of this Application, Dynamic Pricing expenses to be recovered through the GRC have not yet been fully recorded. Capital expenditures associated with the Dynamic Pricing capitalized software project that was first described in SCE’s 2012 GRC (A.10-11-015) are discussed in Exhibit SCE-05, Vol. 2, Part 1.
61
integrate programs and services into Lifestyle Packages, pre-defined bundles of programs and services, 1
which allow customers to more easily enroll in SCE’s various offerings. 2
2. Base Year (2012) Operating Results 3
a) Energy Management and Information Programs 4
In 2012, as the deployment of the ESC infrastructure was completed, residential 5
and commercial customers with demands less than 200 kW were able to take advantage of a suite of new 6
tools and services. These new tools leverage the interval data available from the ESC meter and provide 7
this information to customers so that they can better understand the correlation between energy usage 8
and cost. Additionally, customers with demands greater than 200 kW were still able to take advantage 9
of SCE’s EnergyManager offering. 10
(1) Web Presentment of Interval Data 11
Web presentment of hourly or 15-minute interval usage data is updated 12
daily and available to ESC-metered customers through My Account on SCE’s website. Customers can 13
access the website to view their account information and many other charts and reports depicting their 14
recent and historical electricity usage. This includes information such as the previous day’s data, all 15
usage data within the current (not yet billed) billing period, historical monthly consumption, and 16
historical monthly with a three-year comparison of recorded usage for the most recent month. Detailed 17
usage information will remain available for a rolling 36-month timeframe. Current and projected usage 18
information is also included to help customers better understand their usage patterns and behaviors and 19
the relationship between their usage and rate plan. Additionally, SCE incorporated hourly and daily 20
high temperature information to help customers understand the relationship between warm weather and 21
energy usage. Included with the hourly and daily usage display is a cursor roll-over feature that displays 22
the high temperature for the hour and for the day, specific to each customer’s climate zone based on the 23
applicable U.S. postal zip codes. By the end of 2012, there were approximately one million active My 24
Account users who were able to leverage this granular usage information.22 25
(2) Web Presentment of Cost Information 26
The ESC system also leverages the availability of granular usage data to 27
perform daily cost calculations and end of bill period cost projections based on actual and forecast 28
22 Active My Account users are defined as ESC-metered customers with unique user ID log-ins to My Account within the
last 90 days.
62
electricity usage across many different individual rate plans. These cost tools collectively leverage the 1
interval usage data and translate it to relevant customer-specific electricity costs to help customers better 2
manage their electricity use. These cost tools have helped transform the customer’s experience beyond 3
the basic value of having access to hourly interval data alone, by infusing dynamic projections and rate-4
specific information to provide near real-time billing data and forecasts of potential bill impacts based 5
on each customer’s actual usage behavior. With these newly enabled features, customers can always 6
know how much they’ve spent within the current billing period and how much they are expected to 7
spend in advance of actually receiving their next monthly bill. As demonstrated by adoption rates and 8
positive consumer feedback, these tools have been well received and are serving to enforce the value 9
proposition for smart meters. In 2012, on My Account on SCE’s website informational pages, a 10
prominent four quadrant display of “Balance Due,” “Projected Next Bill,” “Billed Usage,” and “Daily 11
Usage” data provided a wealth of information at the summary level with more detailed supporting 12
information just a click or two away. Additionally, SCE developed a visual depiction for residential 13
customers of their actual and projected usage into the tiered rate pricing structure. This dynamic display 14
is referred to as “Tier Position” and provides customers with their specific daily cost for electricity as 15
calculated using the standard four-tier rate plan structure. The chart also provides the kWh price for 16
each of the four tiers, the allocation of kWh for each tier, and the customer’s projected tier landing point 17
at the end of the current billing period. Additionally, each of the first three pricing tiers displayed in this 18
chart is relative in length to the kWh allocation to that tier, and a reference is provided to indicate the 19
customer’s current position within the tiered pricing structure. This report facilitates customers’ ability 20
to quickly determine not only the price they are paying for electricity but also what they can expect to 21
pay by the end of the current billing period. The Tier Position report was developed to assist customers 22
to better understand the underlying structure of the basic residential rate plan and the relationship 23
between usage and costs. It also may serve to help reduce or prevent any end-of-month bill surprises. 24
SCE’s website presents multiple elements of dynamic data that are updated daily and accessible 24/7. 25
SCE continues to work to help ensure the accuracy and availability of these tools and will continue with 26
its customer engagement efforts in an attempt to maximize customer awareness and increase 27
participation. 28
(3) Budget Assistant 29
Budget Assistant (BA) is a cost management tool for residential and small 30
business customers that leverages the “projected next bill” information to provide customers with 31
63
advance notification of how their energy costs are aligning with an established spending target. 1
Customers enroll in the program by (1) setting a desired monthly spending goal; (2) choosing the 2
frequency of when they will receive updates from SCE, either weekly or only when their projected costs 3
are expected to exceed their spending goal; and (3) selecting how they want to receive their updates 4
from SCE, either via text message, e-mail or a phone call. 5
SCE supports customer enrollment in the program through multiple 6
channels. For those customers who choose to enroll online, the enrollment page for BA includes a 7
calculation of customers’ specific average monthly summer and winter bill amounts to assist customers 8
with establishing a relevant spending target. SCE also provides enrollment options for those customers 9
who do not have internet access and/or prefer to call SCE or mail in their enrollment. Once enrolled, 10
customers receive routine updates as to how they are performing against their spending target to avoid 11
future high bill surprises. 12
In 2012, SCE sent out more than seven million messages containing intra-13
bill cycle cost information to enrolled participants. It is reasonable to expect that customers who have 14
enrolled to receive weekly updates may be more inclined to pursue conservation efforts and active bill 15
management, as compared to customers who have selected threshold or “only-when-over” updates that 16
are triggered when the projected next bill is forecast to exceed the spending goal. Because the BA tool 17
provides a forecast of the next bill amount and all future bills as they may relate to the established 18
spending goals, the BA tool adeptly serves as an early warning system to avoid any higher-than-19
expected bills, expanding the value proposition to achieve universal appeal across all customer 20
segments. 21
SCE’s back office systems are maintained to perform the necessary 22
calculations and notifications. As of December 30, 2012, more than 350,000 customers were enrolled to 23
use the BA tool. Of these customers, 44 percent were enrolled in SCE’s income-qualified programs. 24
Other BA program statistics are summarized in Table IV-18 below. 25
64
Table IV-18 Budget Assistant Program Statistics
Line No.
Description 2011 2012
1 New Program Enrollments (Gross) 123,603 274,166 2 Notification Preferences - Over Budget Updates 49% 48%3 Notification Preferences - Weekly Updates 51% 52%4 Notification Channel Preference - Email 64% 66%5 Notification Channel Preference - Text 24% 23%6 Notification Channel Preference - Voice 12% 11%7 Income Qualified Enrollments to Total Enrolled n.a. 44%
In 2012, SCE surveyed BA customers about their experience with the tool 1
and asked if it helped them to save energy and money. Survey respondents were highly positive about 2
how aware the BA tool has made them about their energy consumption. Many expressed how they had 3
altered their behavior to try to save energy, and thus money, on their monthly bills. Respondents also 4
highly rated the ease of use and understanding of the information they received from the BA alerts. A 5
summary of this survey is presented in Table IV-19 below. 6
65
Table IV-19 Summary of 2012 Budget Assistant User Survey
Line No.
DescriptionScored4 or 5*
1 Signing up was easy 95%
2Since enrolling, I am more aware of my electricity usage
87%
3 Helps me save money 67%
4The "bill-to-date" feature provides me with useful information
87%
5The "projected next bill" feature provides me with accurate information
87%
6 The Budget Assistant alerts are easy to understand 92%
7Since I enrolled, I have gone to SCE.com more frequently to view my usage reports
54%
8 I would recommend Budget Assistant to a friend 85%
* A score of 5 = strongly agree, 1 = strongly disagree.
The survey also included an open-ended question asking how the BA tool 1
helps customers to save money, and the responses received generally fit within seven different 2
opportunity to engage family, no more bill surprises, and encourages online access to view usage data. 4
A small sample of verbatim responses follows: 5
“It has kept me aware of how much electricity I am using so I can try 6 to use less when I am going to go over budget.” 7
“For once in 14 years, I’m knowing how close how far I am stretching 8 my dollars, it was always a wonder waiting for my next bill price tag, 9 love the budget assistant, hardly come to sce online to even check the 10 budget, simple, smart, great idea thanks.” 11
“Extremely helpful when budgeting monthly, retirement income and 12 knowing where we are using the most electricity, so we can change 13 our living habits.” 14
“It has almost become a personal goal for me to see how much I can 15 get below my budget each month. I enjoy the challenge.” 16
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“We are fixed income, and this has really kept me on budget!” 1
SCE will continue to educate customers and promote the use of the tool to 2
better raise awareness of energy costs and enable behavioral changes that can have positive impacts on 3
their next monthly bill. 4
(4) SCE EnergyManager 5
SCE EnergyManager is a web-based application that displays energy and 6
demand data, and provides usage, cost, and billing reporting tools. SCE EnergyManager is offered to 7
customers with demands greater than 200 kW. In our 2012 General Rate Case (A.10-11-015), SCE 8
proposed to offer the suite of tools (daily and monthly data updates) to SCE’s large business customers 9
(>200kW) at no charge and to reduce fees for hourly and quarter-hourly usage data updates. This 10
proposal was adopted in D.12-11-051 and took effect on January 1, 2013. Features and benefits of SCE 11
EnergyManager are shown in Table IV-20. 12
Table IV-20 Features and Benefits Available to Customers through the SCE EnergyManager
Features Benefits • Energy Demand/ Usage (kW, kWh,
kVAR, kVARh, Excess kW/kWh)
• Energy data at 15-minute intervals in the form of charts, graphs, and table formats
• 48 months of historical kWh data in 15 minute intervals
• Service account groupings, such as by region, type of business, etc.
• What-if analysis to estimate the cost of hypothetical changes usage or rates
• Customized frequently used reports
• Printable electronic copies of bills
• Export or print reports, graphs and table
• Track, analyze, and estimate energy cost
and usage
• Identify high and low usage through trend data
• Analyze energy data and determine ways to control and reduce energy usage and costs
• Compare and benchmark cost and usage
• Access billed data before bill arrives
Table IV-21 below summarizes SCE’s EnergyManager usage statistics for 13
the period of 2009-2012. In 2012, the SCE EnergyManager Basic customer base was approximately 14
6,500, which was a two percent decline compared to the 2009 customer base. This decline was due to 15
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service account closures and meters replaced with ESC Meters. As shown in Table IV-21, compared to 1
2011, in 2012, the average number of users per month is up 237 percent, and average number of 2
monthly website hits has increased 43 percent. This significant increase is due to a concerted effort by 3
our Business Customer Division to promote the SCE EnergyManager suite of tools. 4
Table IV-21 SCE EnergyManager Usage Statistics
LineNo. 2009 2010 2011 2012
3 Yr Growth 2009-2012
1 Yr Growth 2011-2012
1 SCE EnergyManager Basic (Free)2 Customer Base (Free Access) 1 6,668 6,571 6,581 6,544 -2% -1%3 Customer Users Per Month 2 331 464 703 2,368 615% 237%4 Average Monthly # of Website Hits 7,925 8,085 13,705 19,598 147% 43%56 Customer Base (Paid Access) 1 1,619 1,521 1,464 1,416 -13% -3%7 Customer Users Per Month 2 306 291 318 421 38% 32%8 Average Monthly # of Website Hits 1,464 1,150 2,615 4,008 174% 53%
Explanatory Notes:
1.
2.
Description
SCE Cost Manager & Bill Manager
Customer Base is defined by unique customers with access to the service (includes service accounts >200kW and some service accounts <200kW).
Customer Users is defined by website hits by unique customers in an average month.
b) Dynamic Pricing 5
In 2012, SCE offered residential and non-residential customers various dynamic 6
pricing programs as described below. 7
(1) Time-of-Use (TOU) Rates 8
SCE has long offered customers a variety of TOU rates. To date, TOU 9
participation has been primarily focused on C&I customers over 200kW who are required to be on TOU 10
rates. Other customers have elected to participate in TOU on an optional basis and were provided TOU-11
capable metering to support their participation in those plans. However, with the completion of the 12
deployment of ESC, interval meters are now installed on virtually all of SCE’s customers’ accounts and 13
enable participation in a TOU plan. 14
In January 2014, SCE will begin transitioning non-residential customers 15
(except agricultural and pumping customers) with demands of less than 200 kW to mandatory TOU 16
plans in compliance with D.13-03-031. Agricultural and pumping customers with demands of less than 17
200 kW will begin to be transitioned to mandatory TOU rates in February 2014. As noted above, the 18
implementation of the mandatory TOU transition was delayed in the 2012 GRC Phase 2 proceeding. As 19
such, in the Base Year, the activities were focused on planning for this significant transition which will 20
impact approximately 600,000 service accounts. Marketing of this program during the Base Year was 21
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limited in anticipation of the upcoming transition. Instead the execution of the marketing campaigns and 1
education and outreach efforts to support this transition will take place primarily in 2013 and 2014. 2
For residential customers, SCE initiated a proactive residential customer 3
outreach campaign in 2011 and 2012, focusing on Tier 5 customers, and those customers participating in 4
the Net Energy Metering rate. A direct mail campaign was launched to provide background and rate 5
comparison information covering the TOU-D-T rate plan (also known as the Residential Off-Peak 6
Savings Plan) and the standard residential rate plan. The direct mail piece was followed up with an 7
outbound calling campaign targeting those customers who did not respond to the mail solicitation. The 8
campaign resulted in an overall TOU-D-T adoption rate of 4.8%. SCE plans to continue its efforts to 9
promote the residential TOU rate plan by expanding the target population to include the identification of 10
customers who may benefit, or come very close to benefiting, from shifting to this rate plan based on 11
their actual electricity usage patterns as will be indicated by the available hourly interval usage data. 12
(2) Critical Peak Pricing (CPP) 13
As noted above, D.12-04-045 directed that dynamic pricing programs that 14
were funded through the DR balancing account not be included in future DR applications and instead are 15
to be included in each utility’s GRC. For SCE, this includes the Critical Peak Pricing (CPP) rates for 16
customers with demand less than 200 kW and greater than or equal to 200 kW. CPP is a tariff that 17
offers eligible participants a discount on monthly on-peak demand charges during the summer months 18
with an increase in energy charges when a CPP event is called. Design of the CPP rates is treated in the 19
GRC Phase 2 proceeding. In this Phase, SCE includes the cost of administering the program, and, in 20
preparation for the implementation of default CPP rates for commercial customers with demands less 21
than 200 kW, education and outreach efforts to inform these customers of the CPP rates. 22
Until the deployment of ESC meters, participation of customers with 23
demands less than 200 kW in CPP was very limited. Indeed, as of the end of 2012, there were only 24
approximately 800 non-residential service accounts with demands less than 200 kW on the CPP rate 25
schedule. SCE’s promotion of this rate during the Base Year was limited in anticipation of the 26
implementation of default CPP within the scope of SCE’s 2012 GRC Phase 2 proceeding. 27
As of the end of 2012, there were approximately 2,400 service accounts 28
with demands greater than or equal to 200 kW on the CPP rate schedule. Customers have the option to 29
leave and receive service under their Otherwise Applicable Tariff (OAT) if they do not wish to remain 30
on CPP. During the Base Year, SCE conducted marketing, education and outreach (ME&O) activities 31
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to (1) continue education and outreach efforts to C&I customer groups who were previously defaulted 1
and remained on CPP, (2) generate program awareness and understanding among customers that might 2
benefit from the program, and (3) develop sales support materials to promote the program and increase 3
enrollment. Funding for these efforts was included in SCE’s Demand Response Application (A.11-03-4
003) and approved in D.12-04-045. 5
(3) Real Time Pricing (RTP) 6
As noted above, D.12-04-045 directed that dynamic pricing programs that 7
were funded through the DR balancing account not be included in future DR applications and instead are 8
to be included in each utility’s GRC. For SCE, this includes the Real-Time-Pricing (RTP) rate. The 9
current RTP rate schedule is a dynamic, TOU pricing tariff for non-residential customers. This tariff 10
charges participants for the electricity they consume based on hourly prices driven by the prior day’s 11
temperature. Participants may adjust their electricity usage based on the hourly prices within different 12
temperature categories, seasons, and days of the week. Design of RTP rates is treated in Phase 2 of this 13
proceeding. In this Phase, SCE includes the cost of administering the program and conducting ME&O 14
activities. 15
As of the end of 2012, 120 customers were enrolled in RTP. During the 16
Base Year, SCE undertook efforts to develop customer awareness through ME&O efforts with the 17
purpose of making RTP easier for eligible customer classes to understand and participate effectively. 18
These ME&O efforts were integrated with SCE’s marketing efforts of other DR programs. Additionally, 19
there were efforts to provide ongoing communications with enrolled customers to help drive retention. 20
c) Customer Service Related Programs 21
In 2012, the Customer Programs function continued to manage the Renewable 22
Tariffs and Interconnection program. Additionally, there were a number of other program development 23
opportunities underway. 24
(1) Renewable Tariffs and Interconnection Programs 25
Customers are increasingly interested in renewable generation, particularly 26
solar energy, as one method of reducing their overall electric costs and reducing greenhouse gas 27
emissions associated with their energy consumption. For most customers, installation of a renewable 28
generation requires that they complete a Net Energy Metering (NEM) tariff application and 29
Interconnection application. SCE’s Distributed Generation Programs organization performs a number of 30
activities to support this process. First, this organization provides education and training by using both 31
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printed and electronic informational materials, hosting training classes for contractors, and responding to 1
direct customer inquiries. Once the customer completes an application, SCE’s Distributed Generation 2
Programs organization reviews the NEM Interconnection application to verify the eligibility of the 3
customer and proposed generating facility, secures an interconnection agreement from the customer, and 4
verifies the customer’s building permit for the generating facility prior to approving the customer’s 5
application.23 This group also processes customer applications to enroll in the Net Surplus 6
Compensation and Option R. 7
Following the successful installation of a customer’s renewable generation 8
facility, this organization also helps to respond to NEM customer questions regarding billing, energy 9
credits, and other tariff and/or interconnection related issues. This group also compiles Commission-10
mandated reporting related to the NEM tariff. 11
As shown in Table IV-22, the number of NEM applications SCE has 12
received has grown significantly since 2008. Over this period, the growth in the number of NEM 13
applications received has averaged over 50% per year. Indeed, the number of applications received 14
nearly doubled in 2012 compared to 2010. To help address this growth, SCE implemented continuous 15
improvement initiatives, including migrating to a paperless electronic submittal and filing system in 16
order to reduce application processing cycle time. 17
In addition to this growth in NEM application activity, the complexity of 18
the administration of the NEM Tariffs has grown over the past few years with the introduction of the Net 19
Surplus Compensation option in 2011. 20
Table IV-22 Net Energy Metering (NEM) Applications Received by SCE
(2008-2012)
Line No.
Description 2008 2009 2010 2011 2012
1 NEM Applications Received 3,009 4,707 7,962 14,981 15,896
23 Customers’ interconnection applications are also reviewed by SCE’s Electric System Planning group in the Transmission
and Distribution Operating Unit.
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d) Other Programs and Services 1
Base Year activities also included the assessment of additional billing and 2
payment options for customers. SCE’s Prepayment Option, described in Exhibit SCE-04, Volume 2, is 3
another example of an option developed to help customers become more proactive in managing their 4
energy consumption. The prepay option was developed to allow customers to pay for their electric 5
service in advance, thus allowing them to avoid paying a deposit in most circumstances. In addition to 6
benefits to participating customers, SCE anticipates that the program will result in a reduction in bad 7
debt expense and billing and postage savings. These benefits will be partially offset by increased 8
notification, payment processing, and call volume costs. 9
In addition, technologies enabled through the HAN became available to 10
customers. To support this availability, CP&S coordinated with the Customer Service Operations 11
Division to help ensure that the appropriate processes and procedures were in place to support customer 12
adoption of this technology.24 13
3. Analysis of Historical Data (FERC Account 908.640) 14
The recorded/adjusted costs for Customer Rates and Programs activities are shown in 15
Table IV-23 below and were derived after analyzing recorded costs for this activity and adjusted to 16
reflect ongoing business operations. The various accounting, operational, and reclassification 17
adjustments are discussed in the workpapers supporting this Volume. In addition, the ratemaking 18
adjustments are discussed in Exhibit SCE-10 Results of Operations testimony. 19
24 The costs associated with the activities described in this section were recorded in and recovered through the ESC
Balancing Account (ESCBA). In accordance with the ESC Deployment Decision, certain ESC steady state costs were recorded to the ESCBA. For the purposes of this GRC forecast, SCE has adjusted its recorded O&M costs to reflect ESC steady state costs and includes those steady state activities in its description of Base Year operating results.
In 2009, the operating expenses for Customer Programs and Rates increased over 2008 1
by $487,000 in labor expenses due to increased levels of NEM enrollment activities and support for 2
ESC.25 Non-labor costs in 2009 also increased by $728,000 due to increased systems expenses 3
associated with the implementation of default CPP for customer with demands greater than or equal to 4
200 kW, the development of EnergyManager system enhancements, and increased NEM enrollment 5
activities.26 6
In 2010, labor costs increased by $737,000 due to a number of factors, including 7
increased levels of NEM enrollment activities, increased ESC steady state costs, and increased CPP and 8
RTP program management costs. Non-labor expenses in this period decreased by $207,000 due to a 9
reduction in development costs associated with CPP. 10
In 2011, labor costs remained relatively stable while non-labor costs increased by $2.022 11
million due to a number of factors, including an increase Budget Assistant marketing efforts and NEM 12
enrollment activities. 13
In 2012, labor costs decreased by $418,000 due to a reduction in EnergyManager costs 14
and unfilled vacancies. Non-labor costs increased in 2012 by $760,000 due primarily to increases in 15
marketing expenses for TOU marketing for residential and small business customers. 16
25 Although ESC costs were recovered through the ESC Balancing Account (ESCBA), certain costs have been identified as
steady state costs and included in O&M recorded costs as an adjustment.
26 As noted above, in D.12-04-045 the Commission directed that dynamic pricing programs (CPP and RTP) be included in future GRC filings. Accordingly, although the historical costs for these programs were recovered through the Demand Response balancing account, they are included in the O&M recorded costs in this proceeding as an adjustment.
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4. Customer Programs Test Year Expectations (FERC Account 908.640) 1
Figure IV-6 shows the recorded/adjusted historical and forecast expenses for the 2
Customer Programs and Rates function. Details regarding the forecast O&M expenses for this function 3
are described below. 4
Figure IV-6 Customer Programs and Rates
FERC Account 908.640 (Constant 2012 $000s)
a) Determination of Test Year Estimating Method 5
As shown in Table IV-23 above, SCE recorded $5.584 million for these activities 6
in the Base Year. Overall, labor and non-labor expenses have generally shown an increasing trend over 7
the past five years. Although labor expenses decreased in 2012 when compared to 2011 by $418,000, 8
the most recent year accurately reflects expense level associated with current activities, and, therefore, 9
the Last Recorded Year was selected as the appropriate basis for forecasting labor and non-labor O&M 10
expenses for this FERC Account. 11
b) Customer Programs Test Year Expectations 12
SCE’s Test Year forecast for FERC Account 908.640 includes non-labor 13
adjustments totaling $1.071 million. These adjustments are necessary to implement Dynamic Pricing 14
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rates as adopted by the Commission in D.13-03-031 and address the continued growth and complexity in 1
the administration of the NEM tariff. 2
(1) Implementation of Dynamic Pricing 3
During the preparation of SCE’s 2012-2014 Demand Response 4
Application, SCE expected that default CPP was going to be implemented in the 2012 timeframe. 5
Funding to support this transition was requested in A.11-03-003 and approved in D.12-04-045. 6
However, in D.13-03-031, the Commission revised the timeline for default CPP and instead ordered that 7
small (GS-1) and medium (GS-2) non-residential service accounts be defaulted to CPP rates beginning 8
on January 1, 2016. Therefore, minimal expenses were incurred for default CPP in the 2012 timeframe 9
and the funding request to support the transition is being requested in this application. 10
SCE estimates that approximately 600,000 service accounts will be 11
impacted by this default. This will be a significant transition for customers, and an extensive customer 12
education and outreach plan is needed to effectively support this transition. In order to minimize the 13
confusion around the new pricing plan and encourage behavioral change that helps customers benefit 14
from the rate, customers must be aware that they are on a new rate, how the rate works, and what actions 15
they can take to benefit from the rate/minimize its impact on them. To educate these impacted 16
customers, SCE will communicate to this highly diverse group of customers in a simple understandable 17
manner through a mix of channels and in multiple languages. 18
In 2015, prior to the default of these customers to CPP, SCE will 19
communicate key information to customers, including their options. Pre-default communications will 20
emphasize that the CPP program does include a full year of bill protection for the first year of 21
participation. To encourage participation, SCE’s communications will help them better understand the 22
cost impacts to their future bills by including a customized rate analysis. This analysis is intended to 23
reveal potential bill impacts arising from future CPP participation based on the customer’s historical 24
usage, along with information on how changes in usage behavior can help to maximize incentives. 25
Another objective of the pre-default communications will be to obtain 26
current customer contact information for day-ahead event notification purposes. Because the CPP rate 27
structure includes increased energy charges during a CPP event period, it is important that customers 28
receive notification about the event in time to decide whether to make operational adjustments on the 29
following event day. 30
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SCE’s program allows customers to enroll in event notification services, 1
which lets them select a preferred contact number/method (text messaging, voicemail, or e-mail). If a 2
customer does not provide a notification preference, SCE will rely on its existing telephone contact 3
information stored in its Customer Service System. However, this information may not be accurate for a 4
large percentage of these customers. This is because customer contact information is collected at the 5
time customers turn on electric service and is typically updated only if customers proactively contact 6
SCE and/or if customers update the information when/if they access their personal online information 7
on SCE’s website. The contact information collected at the time of turn-on for many of the business 8
accounts also may not be the appropriate contact to receive CPP event notifications. SCE anticipates 9
that multiple communications may be required to collect the appropriate contact information. After the 10
implementation, SCE plans to do follow-up communications to confirm rate changes and remind 11
customers of the actions they must take to maximize the benefits of participation in the CPP program. 12
Additionally, SCE will remind customers when their bill protection periods are about to end. Finally, 13
throughout the transition, SCE plans to perform market research. Research objectives will include 14
validating (1) program default messaging, (2) usefulness and understandability of rate analysis, and (3) 15
preferred methods of communication. 16
Second, SCE requests funding necessary to implement and execute CPP 17
event notification measures. In order to provide event notifications, SCE will leverage multiple 18
communication channels including automated voicemail, text messaging, and e-mail to inform 19
customers of CPP events on a day-ahead basis. Day-ahead notification of events is essential to provide 20
customers with ample opportunity to plan for CPP events. 21
Finally, SCE plans to increase marketing of Real Time Pricing (RTP) rate. 22
Prior to April 2013, RTP was available only for large non-residential customers with demands greater 23
than 500 kW. Beginning in April 2013, the RTP rate is available to all non-residential customers.27 24
SCE plans to increase its ME&O activities in order to develop customer awareness with the goal of 25
making the RTP easier for all customer classes to understand and participate in effectively. 26
In order to support the implementation of Dynamic Pricing as described 27
above, SCE forecasts an incremental $825,000 in the Test Year. 28
27 See D.13-03-031, Ordering Paragraph 3, Attachment C (Small Commercial and Industrial Customer Rate Design
Settlement Agreement) p. 13; Ordering Paragraph 4, Attachment D (Medium and Large Commercial Customer Rate Design Settlement Agreement) p. 17.
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(2) Renewable Tariffs and Interconnection Programs 1
As described in Section 2.c)(1) above, the number of NEM applications 2
processed by SCE has grown an average of over 50% per year since 2008. Although SCE has 3
implemented process improvement initiatives that have resulted in improved cycle times, these 4
improvements have not been able to offset the growth in the number of applications processed. In 5
addition to this growth in application activity, the administration of NEM tariffs has grown over the past 6
few years with the introduction of the Net Surplus Compensation option in 2011, Option R in 2012, and 7
the expected implementation of Solar Renewable Credits (SRECs) beginning in 2013 or 2014. 8
SCE expects that customer interest in the NEM tariff will continue to grow 9
throughout this GRC period as SCE customers continue to be interested in and install renewable energy 10
generation systems. While SCE expects that process improvements can help offset a portion of this 11
growth, SCE forecasts that the non-labor O&M expenses to accommodate this growth in NEM tariff 12
administration activities will increase by ten percent per year throughout this GRC period resulting in an 13
increase of $246,000 in the Test Year. 14
c) Summary of FERC Account 908.640 Forecast 15
The forecast adjustments necessary to support the implementation of Dynamic 16
Pricing and growth in NEM administration activities described above total $1.071 million. These 17
adjustments result in a Test Year forecast of $6.655 million for FERC Account 908.640. Figure IV-7 18
shows the Test Year forecast for FERC Account 908.640 compared to the Base Year. 19
77
Figure IV-7 Customer Programs and Rates
Comparison of 2012 Base Year to 2015 Test Year FERC Account 908.640 (Constant 2012 $000s)
$5,584
$1,071 $6,655
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
2012 Recorded Program Changes 2015 Forecast
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V. 1
OPERATING UNIT MANAGEMENT AND SUPPORT 2
A. Description of Operating Unit Management and Support 3
This Chapter describes the centralized management and support activities and generally span 4
across multiple functional areas. These costs are recorded in FERC Account 907.600 and include the 5
cost of labor and non-labor expenses associated with support activities. Generally, the Operating Unit 6
Management and Support function includes the following activities: 7
Finance Management and Administration, 8
Business Planning, and 9
Regulatory and Tariff Program Support. 10
These activities are described in the following sections. 11
1. Finance and Administration 12
a) Description of Finance and Administration Functions 13
Customer Service Finance and Administration is responsible for the Customer 14
Service Operating Unit’s budgets, accounting, financial performance reporting, financial planning and 15
analysis, internal controls, employee space planning, timekeeping, position maintenance, and payment 16
processing. These activities are described below. 17
(1) Planning and Performance Reporting 18
The Planning and Performance Reporting group is responsible for 19
providing budgeting, accounting, forecasting, reporting, financial planning, and analytical support to all 20
the operational divisions within the Customer Service organization. This group prepares, monitors, and 21
reports budgets for Other Operating Revenue (OOR), Operations and Maintenance (O&M), and Capital 22
Expenditures of the Customer Service Operating Unit. They work closely with the operating divisions, 23
providing staff support so that essential cost management processes are effective within the operational 24
divisions. They also monitor expense reporting on a routine basis through the corporate accounting 25
system and process accounting corrections as necessary. The group prepares detailed budget variance 26
reports including year-end budget forecasts. 27
The Planning and Performance Reporting group works with Customer 28
Service project managers to help ensure that proper accounting is established for all programs and 29
services that Customer Service provides to customers. In addition, they are also responsible for the 30