BGE Limited Income Pilot Programs - Evaluation ACI Home Performance Conference March 2012

Presentation Overview Pilot Summary Evaluation Research CAMP/GRAD Credits Participant Survey Pilot Impacts –Usage Impacts –Arrearage Impacts –Collections Impacts Cost Effectiveness Recommendations 2

BGE LIMITED INCOME PILOTS 3

Pilot Motivation Existing limited-income discount program –Incentive for on-time bill payment –But only 27% receive credit for timely bill payment. New pilots –Attempt to cost-effectively increase on-time payment –Test different programs and benefits –Determine impacts on payments and usage –Determine cost-effectiveness 4

Pilot Programs CAMP 1-Double bill credit 2-Existing credits and payment counseling 3-Double bill credit and payment counseling GRAD 1-Graduated credits 2-Graduated credits and Quick Home Energy Check-up 3-Graduated credits and payment counseling 5

EVALUATION RESEARCH 6

Evaluation Questions Did the programs… –Reduce usage? –Improve on-time bill payment? –Reduce collections and non-payment expenses? Could the program… –Be modified to improve cost-effectiveness? –Be scaled up for all BGE limited-income customers? What would be the costs of such a program? What other changes are recommended for full scale implementation? 7

Evaluation Research 1.Program Database Analysis – program participation and services delivered 2.BGE Interviews – program parameters, customer selection, collection strategies and implementation, and potential improvement. 3.Dollar Energy – implementation barriers, customers’ interest and concerns, customer response to payment counseling 8

Evaluation Research 4.Participant Survey – program understanding, impacts, and satisfaction 5.Billing, Usage, and Collection Data Retrieval and Analysis – impact analysis 6.Cost-Effectiveness Analysis – pilot and full scale cost-effectiveness 9

CAMP/GRAD CREDITS RECEIVED 10

Pre Pilot CAMP Statistics The average monthly credit is $ percent of the customers received at least one credit In the average month, only about 27% of these customers received a credit for timely bill payment. Average annual credit is $7.09*12 months*.27 = $23 11

CAMP Pilot Credits 12 # Mean Credits NumberTotal Average Credit All CAMP8244.5$51 $11 1 – Double Credits2914.5$59 $13 2 – Payment Counseling2334.7$32 $7 3 – Credits & Counseling3004.3$58 $13

GRAD Pilot Credits 13 # Mean Credits NumberTotal Average Credit ALL GRAD8228.5$239 $28 1 – Graduated Discount3048.7$243 $28 2 – Discount & Audit2618.2$228 $28 3 – Discount & Counseling2578.7$244 $28

CUSTOMER SURVEY 14

Survey Goals Customer understanding of pilot benefits and services. Customer perception of pilot impacts on bill payment, energy consumption, and program participation. Potential impacts of payment counseling and energy audits. Customer satisfaction with pilot benefits and services. 15

Pilot Enrollment 16 How difficult or easy was the process to sign up for the CAMP/ GRAD program – would you say it was very difficult, somewhat difficult, somewhat easy, or very easy? CAMPGRAD ALL Double Credit Payment Counseling Credit & Counseling Discount Discount & Audit Discount & Counseling Very Easy 67%79%56%66%73%79%69% Somewhat Easy 26%18%37%23%21%19%21%29% Somewhat Difficult 5%1%6%8%4%3%7%0% Very Difficult 2%1%2%3%2%0%3%

Previous Program Credits 17 Prior to your participation in the CAMP/GRAD program over the past year, were you receiving any CAMP program credits on your monthly BGE bill? CAMPGRAD ALL Double Credit Payment Counseling Credit & Counseling Discount Discount & Audit Discount & Counseling Yes41%47%37%38%37% 39%32% No41%37%40%47%50%53%41%60% Don’t Know 18%16%23%16%13%9%20%8%

Pilot Benefits 18 Which did you receive… CAMPGRAD ALL Double Credit Payment Counseling Credit & Counseling Discount Discount & Audit Discount & Counseling Discount larger than CAMP 19%25%15%16%33%31%36%32% Discount based on energy used 41%43%45%34%65% Payment counseling 10%13%9%8%9%7%13%5%

Bill Payment 19 Since you have been participating in this program, would you say you have been paying your BGE bill on time more often, you have been paying your BGE bill on-time less often, or there has been no change in when you pay your BGE bill? CAMPGRAD ALL Double Credit Payment Counseling Credit & Counseling Discount Discount & Audit Discount & Counseling More Often 44%48%40%44%49% 48%49% Less Often 6%7%4%8%6%4%8%5% No Change 50%45%56%48%46%47%44%46%

Energy Usage 20 Since you have been participating in this program, would you say you have been using less energy, you have been using more energy, or there has been no change in your use of energy? CAMPGRAD ALL Double Credit Payment Counseling Credit & Counseling Discount Discount & Audit Discount & Counseling Less Energy 32%33%35%27%51%45%56%51% More Energy 12%15%13%9%10%9%11%8% No Change 49%44%47%56%33%41%27% Don’t Know 7%8%5%8%7%4%7%14%

Program Participation 21 Has your participation in the program over the past year led to your participation in other energy programs such as: the Weatherization Assistance Program, BGE’s Limited Income Energy Efficiency Program, or any other energy program? CAMPGRAD ALL Double Credit Payment Counseling Credit & Counseling Discount Discount & Audit Discount & Counseling WAP24% 23%26%28% 21%43% LIEEP20%16%21%23%27%31% 11% Other Energy Program 20%24%16%20%27%37%21%19%

Payment Counseling 22 Did you receive a phone call from Dollar Energy during the course of the program to discuss your BGE payments? ALL CAMPGRAD 233 Payment Counseling Credit & Counseling Discount & Counseling Yes13%11%12%19% No65%61%75%51% Don’t know22%28%13%30%

Energy Audit 23 Did you receive a BGE Quick Home Energy Check-up as part of this program? This is where someone came out to your home and made suggestions for things that could be done to help you use less energy. GRAD 2 Discount & Audit Yes69% No29% Don’t Know1%

Energy Audit Impact 24 Would you say that since the BGE Quick Home Energy Check-up, you have been using less energy, you have been using more energy, or there has been no real change in your energy usage? GRAD 2 Discount & Audit Less Energy71% More Energy0% No Change23% Don’t Know6%

Bill Payment Problems 25 How difficult or easy is it for you to come up with the money to pay your BGE bill – would you say it is very difficult, somewhat difficult, somewhat easy, or very easy? CAMPGRAD ALL Double Credit Payment Counseling Credit & Counseling Discount Discount & Audit Discount & Counseling Very Easy 20%21% 17%21% 20%22% Somewhat Easy 33%43%27%29%38%46%38%22% Somewhat Difficult 33%26%38%36%28%21%28%41% Very Difficult 14%11%14%17%14%13%14%16%

Sufficiency of Program Assistance 26 Do you feel as though the CAMP/GRAD program provides enough help for you to be able to pay your monthly BGE bill on- time? CAMPGRAD ALL Double Credit Payment Counseling Credit & Counseling Discount Discount & Audit Discount & Counseling Yes67%75%65%60%75%83%75%62% No25%19%23%34%14%9%15%24% Don’t know 8%7%12%7%10%8%11%14%

Survey Findings Many customers don’t understand program –Only 16-25% knew they received bigger credit –65% knew they received discount based on usage –13% recalled payment counseling call –69% recalled audit Reported impacts –Half say they pay bill on time more often –One third to one half say they use less energy –One quarter say they participated in another program High program satisfaction 27

USAGE IMPACTS 28

CAMP Electric Baseload Impacts 29 Treatment GroupGross SavingsNet Savings # Pre- Use Post- Use kWh % Savings kWh % Savings ALL CAMP3818,2647,996269**3%-17>-1% 1 – DOUBLE CREDIT 1408,0627, %-139-2% 2 – PAYMENT COUNSELING 1028,2717, %-2>-1% 3 – DOUBLE CREDIT & COUNSELING 1398,4638,083381**5%951% No significant CAMP pilot impacts on electric baseload usage.

CAMP Electric HEATING Impacts 30 Treatment GroupGross SavingsNet Savings # Pre- Use Post- Use kWh % Savings kWh % Savings ALL CAMP15812,48512, %3243% 1 – DOUBLE CREDIT 5911,38210, %577*5% 2 – PAYMENT COUNSELING 4712,51912,50515<1%1331% 3 – DOUBLE CREDIT & COUNSELING 5213,70613,613921%2112% Significant reduction in electric heating usage for double credit only CAMP pilot group.

CAMP Gas Impacts 31 Treatment GroupGross SavingsNet Savings # Pre- Use Post- Use ccf % Savings ccf % Savings ALL CAMP **-6%-11-1% 1 – DOUBLE CREDIT **-6%-8-1% 2 – PAYMENT COUNSELING ,014-65**-7%-22-2% 3 – DOUBLE CREDIT & COUNSELING **-6%-8-1% No significant CAMP pilot impacts on gas usage.

GRAD Electric Baseload Impacts 32 Treatment GroupGross SavingsNet Savings # Pre- Use Post- Use kWh % Savings kWh % Savings ALL GRAD3708,8738,495378**4%931% 1 – CREDITS1349,0368,599437**5%1522% 2 – CREDITS & AUDIT 1148,8528, %-129-1% 3 – CREDITS & COUNSELING 1228,7138,192521**6%2363% No significant GRAD pilot impacts on electric baseload usage.

GRAD Electric Baseload Impacts By Pre-Treatment Usage 33 Treatment GroupGross SavingsNet Savings #Pre-UsePost-UsekWh% % ALL GRAD3708,8738,495378**4%931% <716 kWh1414,8394,814251%-260-5% ,0138,605408**5%1221% > ,18314,281902**6%617**4% Significant reduction in electric baseload usage for highest pre- usage GRAD pilot group.

GRAD Electric Heating Impacts 34 Treatment GroupGross SavingsNet Savings #Pre-UsePost-UsekWh% % ALL GRAD14913,53113,125405**3%524**4% 1 – CREDITS6012,98312,477505*4%624*5% 2 – CREDITS & AUDIT4514, %5574% 3 – CREDITS & COUNSELING 4412,96512, %3533% Significant reduction in electric heating usage for all GRAD pilot and credit only group.

GRAD Electric Heating Impacts By Pre-Treatment Usage 35 Treatment GroupGross SavingsNet Savings #Pre-UsePost-UsekWh% % ALL GRAD 14913,53113,125405**3%524**4% <716 kWh 234,8665, *-11%-404-8% kWh 438,6928, %2453% >1726 kWh 8318,43917,632807**4%926**5% Significant reduction in electric heating usage for highest pre-usage GRAD pilot group.

GRAD Gas Impacts 36 Treatment GroupGross SavingsNet Savings #Pre-UsePost-Useccf% % ALL GRAD **-4%3<1% 1 – CREDITS **-5%>-1% 2 – CREDITS & AUDIT %35*4% 3 – CREDITS & COUNSELING **-7%-24-3% Significant reduction in gas usage for credit and audit GRAD pilot group.

Usage Impact Summary CAMP –Double credit only electric heaters: 5% electric usage reduction. GRAD –Highest non-electric heating users: 4% electric baseload reduction. –Electric heaters: 4% electric usage reduction. –Electric heaters, credit only: 5% electric usage reduction. –Highest electric heating users: 5% electric usage reduction. –Credits and audit group: 4% gas usage reduction. 37

ARREARAGE IMPACTS 38

CAMP Arrearage Impacts 39 Treatment Group Net Change #PrePost Gross Change All CAMP566$197$230$33**-$60** 1 – Double Credits204$181$202$21-$72** 2 – Payment Counseling160$187$216$29-$64 3 – Credits & Counseling202$220$268$48*-$45

GRAD Arrearage Impacts 40 Treatment Group Net Change #PrePost Gross Change ALL GRAD561$276$251-$26**-$119** 1 – Graduated Discount213$257$254-$3-$96** 2 – Discount &Audit170$332$289-$43*-$136** 3 – Discount & Counseling178$246$210-$36**-$129**

COLLECTIONS IMPACTS 41

CAMP Collections Impacts 42 Treatment Group Net Change #PrePost Gross Change Turn Off Notice As Most Severe Collections Action All CAMP44543%39%-5%**<1% 1 – Double Credits15844%41%-4%1% 2 – Payment Counseling12243%34%-10%**-5% 3 – Credits & Counseling16542%41%-2%3% Field Call As Most Severe Collections Action All CAMP4454% 0%-4%* 1 – Double Credits1584%1%-3%-6%* 2 – Payment Counseling1224%7%2%-1% 3 – Credits & Counseling1654%5%1%-3%

GRAD Collections Impacts 43 Treatment Group Net Change #PrePost Gross Change Turn Off Notice As Most Severe Collections Action ALL GRAD48459%49%-10%**-5%** 1 – Graduated Discount17961%50%-12%**-7%* 2 – Discount &Audit15358%51%-7%*-2% 3 – Discount & Counseling15259%47%-12%**-7% Field Call As Most Severe Collections Action ALL GRAD4844%5%1%-3% 1 – Graduated Discount1794%5%1%-3% 2 – Discount &Audit1535%6%1%-3% 3 – Discount & Counseling1523%4%1%-3%

COST EFFECTIVENESS 44

Costs and Benefits CostsBenefits EnrollmentReduction in turn-off notices Payment CounselingReduction in field calls Billing System ModificationReduced carrying costs on arrearages Printing and MailingReduced reserves for arrearages Discounts Evaluation 45 Highlighted items are included in full scale implementation costs.

Net Costs 46 Net Costs (Per Participant) CAMP 1 – Double Credit$44 CAMP 2 – Payment Counseling$71 CAMP 3 – Credit & Counseling$97 GRAD 1 – Discount$239 GRAD 2 – Discount & Audit$256 GRAD 3 – Discount & Counseling$273

RECOMMENDATIONS 47

Pilot Design Self-selection: those who responded to letters enrolled – difficult to extrapolate to all customers. Stratification: done differently for CAMP, GRAD, and comparison group – difficult to estimate and compare results –CAMP: # on-time payments, poverty level –GRAD: # on-time payments, electric usage, arrearages Enrollee tracking: difficult to examine data attrition issues. 48

Administration Data access for DEF payment counselors –Could respond to customer questions –Would not have to refer to BGE Payment timing –Social Security recipients had trouble with payments –Change bill due date to align with benefit payment at customer’s request 49

Customer Education Customers were unaware of program elements Many communication opportunities –Invitation letter –Phone enrollment –Confirmation letter Shorten and simplify written communication 50

Implementation Stratification – represent all customers to be targeted by full scale implementation Customer targeting – target those likely to have beneficial outcome Program potential – examine potential cost savings against potential costs Cost effectiveness – structure payment to be no less than what was paid prior to program 51

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