A New “Twist” on a CFL Program How One Utility Capitalized on a Unique Approach Presented September 2, 2008 EPA Webinar: “Energy Efficiency Best Practices Programs” Anne Ducey

2 Seattle City Light (SCL) Public utility 340,000 residential customers 6.4 cents/kWh 131 sq. miles 90% hydro

3 SCL Sees the “Light” Neighboring utilities running CFL programs since SCL gets go-ahead in 2006 – we needed to catch up. Lots of potential!

4 CFL Potential in SCL Area 29% of SCL customers have NO CFLs installed. Complements 67% of customers who already had CFLs.

5 CFL Potential in SCL Area Average # sockets per home = 33.4 Total sockets = 10.5 m Total sockets w/o CFLs = 8.8 m Total specialty sockets = 4.2 m Total regular sockets w/o CFLs = 4.6 m

6 What’s the Best Approach? Two models used successfully in Puget Sound region: 1.Retail coupons 2.Manufacturer (mfr.) buy-down

7 Retail Coupon Program 1.Utility prints in various $ values. 2.Utility distributes coupons. 3.Customer buys CFL with coupon. 4.Retailers send to fulfillment house. 5.Utility reimburses retailers.

8 Mfr. Buy-down Program 1.Agreement with CFL mfrs. to reduce wholesale price to retailers. 2.Retailer applies regular % mark-up but discount is passed on to customer. 3.Customer buys discounted CFLs. 4.Utility reimburses CFL mfg. based on verified shipping information.

9 Mfr. Buy-down Program Retail price of regular CFL: $4 + $1 (25%) = $5 Buy-down price of CFL: $2 + $.50 (25%) = $2.50

10 Benefits of Coupon Approach 1.Coupon infrastructure already established in Puget Sound region. 2.Actual sales are tracked rather than just shipping data. 3.Retailers understand coupons. 4.Buy-down CFLs not usually in Stock Keeping Unit (SKU) system.

11 An Unexpected “Twist” SCL chooses coupon approach and advertises through Request for Proposal (RFP). Responses received from well-qualified contractors. A third option was presented – Retail Mark-down Program.

12 Retail Mark-down Program 1.Agreements with retailers to sell CFLs at lower price. 2.Point of Sale (POS) signage shows reduced price and sponsoring utility. 3.Retailer provide sales data to utility. 4.Utility reimburses retailers. 5.Regular field visits to check CFL stock, pricing and POS material.

13 Retail Mark-down Program Advantages: 1.Discounts on regular stock. 2.Extremely accurate sales data. 3.Prices can be easily corrected. 4.Flexible discounts. 5.No coupons or rebate forms.

14 Retail Mark-down Program Challenges: 1.Longer start-up. 2.Regular field visits critical. 3.Retailer reporting requirements.

15 Branding Strong brand important. “Twist” part of the vernacular. “Twist & Save” = Fun!

16 Advertising Costs 6/07 – 6/08 Radio + Print ads$ 73,000 Video + Jingle$ 51,000 Print + Swag$ 56,000 PR$ 6,000 Total $186,000 $/unit$ 0.186

17 “Twisty” with the Seattle Mariners Moose Mascot

18 Magnets Post-it-notes Stickers Pens Balloons Employee T-shirts Give-aways

19 Stand-up sign  Brochures Banners Store posters Post cards Store lists Print Material

20 Store Signs

21 Home Depot Display

22 Costco Display

23 Lowe’s Display

24 Media Highlights “Twisty” catches 1 st pitch at Mariners game Kids carve Halloween pumpkins lit with Twist & Save CFLs 2-minute interview on CNN T&S featured on 3 local TV news shows T&S Video run as PSA’s on TV T&S Video runs during Seahawks and Mariners games

25 Media Highlights Mayor Nickels announces 1 million CFLs sold via Twist & Save program

26 Successes 21 retailers, 90 retail locations Average SCL incentive = $ admin. and marketing = $1.74 ROI = $14.61 over CFL life (8.4*$1.74). One million CFLs sold since 6/07 Video won a Communicator Award from International Academy of Visual Arts Easy-to-remember web site- (It could have been:

27 Summary 1.Listen to the experts 2.Make it easy for customers 3.Consensus by committee kills creativity 4.Good PR is vital 5.Make it fun!

28 Thank you for your attention! Anne Ducey Seattle City Light