4949-E-APDF. Opens in new Window.

26 Pages·2017·3.3 MB·English

Date of Issuance: December 18, 2017
PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

ENERGY DIVISION RESOLUTION E-4882
December 14, 2017

R E S O L U T I O N

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

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

SAFETY CONSIDERATIONS:
 There is no impact on safety.

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

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

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

On November 1, 2016, PG&E filed its ME&O Plan in accordance with Decision
(D.) 15-07-001 and an Assigned Commissioner and Administrative Law Judge
Ruling issued on December 17, 2015 (December 17 Ruling) in Rulemaking
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(R.)12-06-013. This advice letter describes PG&E’s time-of-use (TOU) customer
engagement strategy for 2017-2019 leading up to the rolling default of up to
four million PG&E residential customers1 onto a default TOU rate in 2019.

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

PG&E’s ME&O Plan includes three phases:
 Phase 1 in 2017 lays the foundation for engagement with customers
and deploys a test and learn approach with multiple outreach
tactics.2
 Phase 2 in 2018 will optimize the outreach based on the lessons from
2017.
 Phase 3 in 2019 will continue education and engagement efforts to
prepare customers for default rollout.

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

1Advice Letter 4949-E, p.1
2 PG&E has completed several of the tasks associated with 2017 outreach, including bill
comparison ‘test and learns’ and customer research in consultation with the
Commission and Working Group. These costs have been tracked in the RRRMA and in
PG&E’s quarterly rate reform reports. This advice letter requires PG&E to advise the
Working Group of changes to the instant budget of greater than $250,000.
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profiles showing when customers will be receiving specific messages were also
provided.

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

BACKGROUND
Decision 15-07-001 directed the three investor-owned utilities (PG&E, Southern
California Edison Company (SCE) and San Diego Gas & Electric Company
(SDG&E), collectively the IOUs) to begin the process of defaulting residential
customers to TOU rates in 2019 and to undertake a series of opt-in TOU pilots in
2016 and default TOU pilots in 2018. In D.15-07-001, the Commission discussed
the importance of providing adequate marketing, education and outreach to
customers and directed the IOUs to work with other parties to create a working
group3 to examine ME&O for the transition to default TOU rates as well as for
the changes to the tiered rate structure, for revisions to the minimum bill and bill
comparison tools.4 D.15-07-001 asked the Working Group to consider long term
outreach to customers and to develop specific strategies to increase customer
awareness and understanding of their rates, the changes to the tiered rate
structure, and the transition to default TOU rates.

3 The Marketing Education and Outreach Working Group (ME&O WG or Working
Group) in the Residential Rate Reform Proceeding includes active members from the
CPUC’s Energy Division and Business and Community Outreach, each of the three
IOUs, the Office of Ratepayer Advocates (ORA), the Consumer Federation of California
(CFC), the Center for Accessible Technology (CforAT), the City of Lancaster, the
Environmental Defense Fund (EDF), the Greenlining Institute, Marin Clean Energy
(MCE), Oracle (formerly Opower), Siemens, Tesla (formerly SolarCity) and the Utility
Consumers’ Action Network (UCAN). The Working Group is, and continues to be,
open to all interested participants.
4 D.15-07-001, p.255-263
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In late 2015 and early 2016 the Working Group met and created a set of draft
metrics for ME&O activities and designed a baseline ME&O study to ascertain
awareness and understanding of rates among ratepayers.5

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

On December 17, 2015, the Assigned Commissioner and Administrative Law
Judge (ALJ) issued a ruling (December 17 Ruling) which described the
Commission’s desire for greater integration of marketing activities between rate
reform, demand-side management (DSM) and other IOU programs, as well as a
more systematic approach to planning for default TOU ME&O. This ruling
directed the IOUs to hire an expert consultant to advise the Working Group on
appropriate ME&O metrics, goals, and strategies to meet those goals, including a
plan for statewide ME&O program coordination. The ruling also directed the
IOUs to prepare a comprehensive ME&O plan by September 1, 2016.7 This plan
was required to include:

 Specific timelines for rate-reform related ME&O activities;
 Budgets for such activities;
 Descriptions of segmented ME&O for certain customer groups;
 Surveying methodologies and questions to evaluate the metrics;

5 The IOUs contracted with Hiner & Partners to conduct a telephone survey among a
representative sample of residential customers in each service territory on their
knowledge of basic rate concepts and time-of-use rates. This survey was run for PG&E
in March 2016 and April 2017.
6 A copy of the baseline survey results is attached to AL 4949-E
7 This was extended to November 1, 2016 by ALJ Ruling on May 26, 2016.
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 Coordination between the IOU’s’ ME&O activities and the statewide
ME&O program (Energy Upgrade California or EUC), including
how messaging content, campaigns and communication plans will
be aligned. 8

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

After significant consultation with Working Group members, Commission and
IOU staff, Greenberg delivered the Rate Reform ME&O Blueprint (Blueprint), on
August 20, 2016.11 The Blueprint included a strategic action plan for statewide
and local utility marketing as well as a proposed vision, proposed metrics, and
proposed timeline and budgets for 2017 through 2019.

8 Assigned Commissioner and Administrative Law Judge's Ruling Requiring Utilities to
Prepare Comprehensive Marketing, Education and Outreach, Metrics, Goals and
Strategies for Residential Rate Reform, December 17, 2015, p. 7.
9 Greenberg Inc. is a communication research and strategy firm located in Emeryville,
CA. The project included Greenberg staff and a number of subcontracted subject matter
experts in advertising and program evaluation.
10 Greenberg Blueprint, Appendix G.3.
11 ALJ McKinney issued a Ruling on October 7, 2016 adding Greenberg’s Marketing,
Education & Outreach Blueprint v.2 into the record of Rulemaking (R.) 12-06-013 for
reference purposes. A copy of the Blueprint can be found at:
http://www.cpuc.ca.gov/WorkArea/DownloadAsset.aspx?id=6442451678.
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The Blueprint is a comprehensive document which includes many elements.
Chief among these:
 Greenberg provided an impact-based segmentation strategy which
emphasized spending the most time and money on customers who
would be the most negatively impacted by default TOU rates, then
applying psychographics to those segments to further refine the
message.
 A go-to market plan which increases the amount of messaging closer
to default on a 90/60/30 day timeline.
 A strategy based on emotional quotient (EQ) and intellectual
quotient (IQ) where a general, EQ focused statewide message would
provide a reason for customers to care while the IOUs would
provide a more IQ focused message( i.e. details on rate plans, rate
comparisons, tips on how to adapt and conserve).
 A mass media strategy which aimed to reach all Californians 13 and
older.
 A measurement strategy with metrics and proposed studies.

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

1. things that seem reasonable and should inform the IOU plans,
2. things that are necessary to the plans but not included in the Blueprint,
3. things that can be done by Commission action outside this proceeding,
4. things that cannot be included in the plans,
5. and things that raise concerns.12

Parties expressed skepticism on some portions of the Blueprint at the workshop,
including the budgets proposed by Greenberg. Other parts of the Blueprint, such
as establishing formal alignment and management processes between ME&O in

12 ALJ Ruling, August 29, 2016
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different proceedings and programs, were considered internally by Commission
staff. Agreement was reached on the strategic foundation, segmentation and
measurement strategies described in the Blueprint. This resulted in a common
outline that was provided to the IOUs by ALJ ruling on September 30, 2016
(September 30 Ruling).13

On November 1, 2016, PG&E, SCE, and SDG&E submitted advice letters setting
forth their respective ME&O plans detailing their strategy, tactics and timeline
for customer engagement in accordance with the December 17 Ruling and
Blueprint.14 In response to direction provided by ALJ McKinney at the
February 6, 2017 prehearing conference, the IOUs submitted supplements to
their ME&O plans on March 15, 2017.15 These supplements included additional
information on the IOUs’ public relations plans, segmentation strategies and
budgets, as well as detailed profiles of how customers would be contacted over
the default period.

PG&E’s ME&O Plan includes three phases:
 Phase 1 in 2017 lays the foundation for engagement with customers and
deploys a test and learn approach with multiple outreach tactics.
 Phase 2 in 2018 will optimize the outreach based on the lessons from
2017.
 Phase 3 in 2019 will continue education and engagement efforts to
prepare customers for default rollout.

In the market and situation overview section required by the
September 30 Ruling, PG&E cites its own research showing that its customers
have a low engagement with energy and that they view their relationship with

13 Administrative Law Judge’s Ruling inviting prehearing conference statements and
setting next steps following the September 12, 2016 Marketing, Education & Outreach
Workshop, September 30, 2016 (September 30 Ruling)
14 PG&E Advice Letter (AL) 4949-E; SCE AL 3500-E; SDG&E 2992-E.
15 PG&E AL 4949-E-A; SCE AL 3500-E-A; SDG&E 2992-E-A.
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energy and the utility as transactional in nature. They also provide an overview
of their customers’ media consumption habits by segment.

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

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

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

PROTESTS
Advice Letter AL 4949-E was protested.

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

16 PG&E 4949-E-A, Attachments 1 and 2
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ORA
In its protest, ORA asks that PG&E provide budgets with more granular detail.
ORA acknowledges that the budgets included are high level estimates, but
believes more detailed information could serve as a baseline by which to
evaluate future changes to the budget. They support PG&E’s plans to leverage
budgets from other proceedings to co-fund integrated outreach efforts. They also
suggest that PG&E be required to include any internal and external audits17 of
the RROIR Memorandum Account (RRRMA) in future Progress on Residential
Rate Reform (PRRR) Quarterly Reports. Lastly, they ask that PG&E provide
additional analysis on metrics tracking and goals.

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

While CforAT and the Greenlining Institute agree that comprehensive ME&O is
necessary, they point out the many unknowns in the default TOU process, such
as whether the transition will be big bang or rolling18, the categories of customer

17 ORA is a party to PG&E’s 2017 GRC Phase 1 settlement agreement which approves
cost recovery for the period 2017-2019 through the RRRMA. The agreement provides
that ORA may audit the RRRMA. See Settlement Agreement in A.15-01-001, p 1-8.
18 Since these comments were originally submitted, the January 23 2017 Scoping Memo
confirmed the transition to TOU will be a rolling default.
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that might be excluded from default19, the actual default rates and the results of
the pilots, could hinder a coordinated ME&O process. They ask that the
Commission defer the expansive plans submitted by PG&E until after the
integration with the Statewide ME&O effort, and only authorize the more
targeted areas of the plan such as the opt-in TOU and high usage surcharge
campaigns.

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

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

19 Assembly Bill 327 (Perea) which authorized the Commission to set default TOU rates
also required that certain customers be exempted from default, including medical
baseline customers. The Commission is currently in the process of determining if there
will be additional exemptions.
10