12. Customer Outreach and Education - Foundational Activities and Costs Common to All Classes

12.1. PG&E's Proposal

PG&E proposes foundational work that includes customer research, educational materials design, training program development and facilitation, staffing, and database operations enhancement. PG&E estimates the related incremental cost to be $5.90 million for the 2008-2010 time period. PG&E considers all foundational costs to be incremental.

Customer Research

PG&E will employ focus groups, interviews, and quantitative-based telephone and on-line interviews to identify segment-specific business needs and communication preferences. Efforts will include determining customers' baseline understanding of PDP and TOU rates, researching how best to reach out to them according to their industry and size, determining the optimal communication channels by customer segment, testing outreach materials for clarity and effectiveness, testing usability of decision and energy analysis tools, deciding the most effective notification methodologies, testing prototype notification devices, conducting customer satisfaction surveys, and conducting ongoing tracking studies to drive improvements in outreach.

With this information, PG&E will be able to take a targeted approach to assisting customers in making their rate decisions, and states that it will incorporate research results with customer feedback so that outreach efforts over time will increasingly reflect actual customer experiences and preferences. Using cost estimates from previous research projects, PG&E estimates these incremental research costs to be $1.70 million.

Educational Materials Design

PG&E will use input from customer research to design, test and refine educational materials, indicating that the materials will become more sector-specific over time as PG&E gains additional customer insights. PG&E estimates these incremental materials design costs to be $0.30 million.

Training Program Development and Facilitation

Using the information in the educational materials, PG&E will develop internal training materials, design training modules and deliver training to Account Managers, Customer Service Representatives (CSR), and Dynamic Pricing Specialists so they will be able to assist customers with the new rates. Training will vary according to the needs of the employee audience. PG&E estimates these incremental training development and facilitation costs to be $0.55 million.

Staffing

PG&E plans to hire three incremental Research Managers (two in 2010) to implement the customer research efforts described above, and one incremental dynamic pricing program Outreach Supervisor, who will spend two-thirds of his or her time managing overall implementation of customer outreach. Based on the average cost per internal employee, PG&E estimates these incremental labor costs to be $0.95 million.

Database Operations

In order effectively to implement customer outreach, PG&E indicates that it needs to expand and enhance its business customer database to include new fields to collect information on meter status and customer default eligibility, rate impacts based on usage patterns, outreach efforts, responses and rate decisions for each customer. These enhancements will allow PG&E to segment customers with like usage patterns, identify customers most in need of education on the PDP implications for their businesses, select role models in various industry sectors who have learned to manage their energy usage more effectively, and tailor customer messaging. Costs include database management; database enhancements to allow for notification and response tracking, loading data to the database, pulling data from the database, and building incremental customer reports; and ongoing database maintenance. These costs are specific to enabling targeted customer outreach and are separate from the incremental IT work discussed later in this decision. PG&E estimates these incremental costs to be $2.40 million.

12.2. Discussion

DRA has indicated that it does not dispute these costs. No other party addressed this issue. The activities proposed by PG&E and the associated costs are reasonable. The Commission expects that PG&E will report the results of the employment of focus groups, interviews, and quantitative-based telephone and on-line interviews that identify segment-specific business needs and communication preferences in its first semi-annual report (see Section 19.1). This semi-annual report should include information on the specific needs of minority, ethnic, and traditionally "hard to reach" business customers. Additionally, the Commission's Business & Community Outreach group shall be notified in advance about focus group sessions and be invited to attend.

In addition, as discussed above, PG&E's analysis of the incremental nature of these costs is also reasonable. Therefore, PG&E's estimate of the incremental foundational costs common to all customers, which amounts to $5.90 million, is adopted. Contingencies related to these adopted costs are discussed further on in this decision.