13. Customer Outreach and Education - Large Customers

According to PG&E, there are currently approximately 10,000 large C&I customers and approximately 1,250 large agricultural customers. Approximately 20% of these large C&I customers are in DR programs and, under PG&E's proposal, would not be subject to PDP default. While almost all of the rest are currently subject to mandatory TOU rates, few have significant experience with CPP rates. Thus, according to PG&E, most of these large customers will need assistance with PDP rate selection in time for the May 1, 2010 (large C&I customers) and February 1, 2011 (large agricultural customers) default dates if they are to avoid unexpected bill volatility and dissatisfaction.

13.1. PG&E's Proposal

PG&E proposes incremental costs specific to large C&I and agricultural customers that consist of account services staffing for Person-to-Person outreach, and various activities related to Awareness and Education, for a total incremental cost estimate of $5.92 million.

Person-to-Person Outreach

PG&E proposes to deploy existing Account Managers and incremental personnel to work directly with large customers to analyze new rate structures. The incremental account services personnel will consist of 25 Dynamic Pricing Specialists to augment the existing Account Manager staff and work with customers individually on PDP issues such as rate selection. PG&E will also hire one incremental Account Manager. The Account Manager will work with large customers in the Business Customer Center helping existing Account Managers involved in dynamic pricing-related work. Under PG&E's proposal, these personnel will later shift to assisting small and medium commercial and agricultural customers. PG&E estimates these additional labor costs to be $3.30 million through 2010, with $2.93 million being considered incremental for purposes of determining this proceeding's rate increase.

Awareness and Education

PG&E indicates that it will augment its Person-to-Person outreach with a direct mail and e-mail campaign to alert large customers who will default to new rates that a significant change is coming that requires their attention. The campaign will include an industry-specific component aimed at industries that may face the most severe impacts from PDP. There will also be outreach to large customers enrolled in DR programs and not eligible for default to PDP, to make sure they do not stop participating in DR programs due to confusion over messaging.

The specific Awareness and Education activities proposed by PG&E are:

· direct outreach (e-mail, direct mail, bill inserts, graphic design and printing);

· educational materials and collateral, on-line content development (writing the educational content and designing the graphic design for the web);

· staffing (two and one/third incremental employees to oversee development and implementation of customer outreach); and

· customer recognition (to acknowledge customers who participate in successful energy management strategies and adopt demand shifting behavior).

PG&E estimates these additional labor costs to be $3.29 million through 2010, with $2.99 million being considered incremental for purposes of determining this proceeding's rate increase.

13.2. Discussion

The activities proposed by PG&E and the associated costs are unopposed and reasonable. Since large C&I customers will default to PDP rates beginning May 2010, the Commission expects PG&E to notify the Energy Division and Business & Community Outreach group as to how many customers were reached through each type of proposed outreach, and whether all the large C&I customers were reached through person-to-person contact. 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 cost for large customer outreach and education which amounts to $5.92 million is adopted. Contingencies related to these adopted costs are discussed further on in this decision.