Customer Segmentation:“Whole Neighborhood Approach”

LIEE/CARE IOU Budget Applications WorkshopCPUC Energy DivisionJuly 17, 2008

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Objective for today’s workshop

Discuss “Whole Neighborhood Approach” model to program delivery Based on Commission directives and “best practices” in

IOU budget applications Pursues more efficient and less expensive ways to deliver

LIEE program

Determine what additional categories for customer segmentation should be pursued

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KEMA Needs Assessment

“In the spirit of trying to establish an optimal LIEEProgram design - which presumably would be toprovide immediate energy savings benefits to asmany low income households as possible at thelowest possible cost - the Commission mustencourage the utilities to find better, more efficientand less expensive ways to deliver energy savingmeasures…”

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KEMA Needs Assessment

“Only a small portion of low income households are in needof comprehensive, energy efficiency upgrades and most, infact, on average, all low income households have animmediate need for relatively low-cost (low impactmeasures)…

Essentially, the process used to identify households whoonly have a need for a few of these low cost items is thesame as that which is used to identify and qualifyhouseholds who have much more significant needs.”

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Staff Proposed Delivery ModelALJ Ruling Requested Comments on September 27, 2007

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Commission Guidance in Decision 07-12-51

Directives for LIEE Program:Emphasize opportunities to save energy

Customer segmentation by energy usage will be included in new model

Pursue cost-effective means of program delivery

Take advantage of other resources and programs

Provide customers with ways to reduce their bills and improve their quality of life

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Strategic Plan for Energy Efficiency (Draft issued July 14, 2008)

Goal 1: Improve Customer Outreach Strategy: Improve Program Delivery

Near Term Strategy: Use information from segmentation analysis to achieve efficiencies in program delivery

Goal 2: LIEE is an Energy Resource Strategy: Increase delivery of efficiency programs by

identifying segmented concentrations of customers Near Term Strategy: Identify and develop segmented approach

to deliver services and improve use of CBOs in delivering services

Segmentation approach “will improve the efficiency of delivery by identifying geographic and social concentrations of customers to achieve economies in delivery, material purchasing and resources.”

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Step 1: Identify Low Income Neighborhood (Locate concentration of low income customers in

specific geographic area to target)

Actor Strategy Objective

Utility

Locate pockets of low income customers using demographic information (ex. Zip7)

Locate pockets of low income customers using CARE lists

Locate pockets of low income customers with high energy usage

Locate neighborhoods in need of revitalization

Low income customers in

specific geographic

area identified

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Step 2: Target Low Income Neighborhood(Conduct outreach to low income customers in specific geographic

area)

Actor Strategy Objective

Utility

CBOs

Contractors

Submit press releases to local media

Leverage and partner with local entities

Deploy “mobile energy units” to area

Door-to-door outreach and canvassing

Utilize CARE outreach and marketing

Outreach at community events

Low income customers in

urban and rural neighborhoods

targeted

Low incomecustomers in urban

neighborhoods targeted

Low income customers in rural

neighborhoods targeted Direct mailing to customers in area

Send email blasts to customers in area

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Step 3: Assess Homes in Low Income Neighborhood, Install Measures and Inspect

Actor Strategy Objective

Assess climatezone

Assess energy usage

Assess energy burden

CBOs

Contractors Conduct energy audits in specific

geographic area,

household by household

Assesshousehold

type

(1)Determinemeasuresto install

(2)Install

Measures

(3)Conduct

Inspections

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Whole Neighborhood Approach Encourages involvement by local organizations and

entities, in turn promoting “leveraging” opportunities Achieves a more cost-effective approach to program

delivery Outreach and marketing Assessment, measure installation, and inspections

Reduces transportation costs, in turn reducing “carbon footprint” of LIEE program

Maintains programmatic focus on installation of measures Utilizes social networks and makes program delivery a

community event

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Customer Segmentation in Program Delivery

Energy Usage Energy Burden Energy Insecurity Climate zones Housing type Renters v. owners Master metered Head of household disabled/medical baseline Late payment history Language Family size Seniors Near homeless

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