AABE Annual Conference

Energy Assistance

Presented by David L. Johnson, DirectorRevenue Management and Protection

May 19, 2010

2

Current Economic Challenges

Official unemployment rate for Detroit is 25.3%, but estimates on real unemployment approach 50%!

Source: Michigan Bureau of Labor and Statistics – March 2010

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Current Economic Challenges

87,000106,000

118,000

45,730

0

40,000

80,000

120,000

160,000

2007 2008 2009 2010

Source: RealtyTrac.com – through March 2010

Michigan Foreclosure Filings

13.2% 13.5%14.0% 14.4% 14.4%

10.0%

12.0%

14.0%

16.0%

18.0%

2005 2006 2007 2008 2009

Michigan Detroit

Source: US Census Bureau

% People Below Poverty Level 33%

YTD

25456585

105125145165185205225

2006 2007 2008 2009 2010 Proj

LI Customers Identified State & Federal Funding Total LI Households in DTE Service Territory

As the number of Low-Income customers increases, State and Federal funding levels decline

DHS statistics show DTE may have as many as 450,000 Low-Income customers in its service territory

Current Economic Challenges

198K

236K

$73M

$88M $119M

255K

Allowing arrears to grow makes it very difficult for customers to restore service once disconnected

280K

$112M

356K*425K* 450K*

*Estimated based on DHS Statistics

PRIVILEGED AND CONFIDENTIAL

4

Mortgage

Car Payment

Credit Cards

Cable/Direct TV

5

Customer Payment Hierarchy

Cell Phones

Utilities!!

6

Evidence of Customers in Need is Apparent Everywhere

7

Customers in Need

• Eligible for energy assistance up to 200% FPL• Eligible for payment plans with special down-payment features• Low-income rates available• Most programs were designed to assist low-income customers

Low-Income in Arrears

• Not eligible for assistance• Payment plans available but without special rates• Energy efficiency programs available but at a cost

Non Low-Income in Arrears

• May or may not be in arrears• Sometimes pay late but always pay before disconnect notice is sent• Existing payment plans of little help • Primary concern is high rates and difficulty paying bills• Developing new programs to better assist this customer in reducing his/her bill

Slow Payers (Working Poor)

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DTE Energy Community Assistance

State Government Partnerships

Non-Profit Assistance Agency Partnerships

Faith-Based Partnerships

Community Energy Forums

Customer Assistance Day

Community Organization Relationships

“Need Help?”

DTE Energy Assistance to Customers in

Need

• Partnering with four local churches to provide on-site low-income energy assistance via experienced DTE Case Management staff

• Increase to full staffing in CES Churches

• Expanded hours for greater customer convenience

• Add a church on the West Side of the state – Grand Rapids or Muskegon

• Expanding CES-like services into the Detroit Recovery Project

• Education and communications with Faith-Based and Community leaders

– Host an Energy Assistance Resource Conference– Implement a quarterly Energy Assistance Newsletter– Partner with leaders to streamline energy assistance messages thru

existing channels: church events, bulletins, etc.

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Faith-Based and Community InitiativesCommunity Energy Solutions (CES)

Detroit

Second Ebenezer ChurchPastor Dr. Edgar Vann

Fellowship ChapelRev. Wendell Anthony III

New Galilee Baptist ChurchRev. Horace Sheffield

St. Cecilia’s Catholic ChurchFr. Theodore Parker

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Customer Forums and Customer Assistance Day Event

• Holding 35 Customer Forums in 2010 vs. 14 in 2009

• Provide on-site assistance to low-income customers

• Assist customers filing HHCs and SER

• Customer Assistance Day 2009 event provided over $500,000 in support to over 10,000 customers

• Assembled over 25 Community Agencies

• Hosting two Customer Assistance Day events in 2010

PRIVILEGED AND CONFIDENTIAL

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ArrearsCollection Process

Posting Day5-10 Days Prior to

Disconnect

Disconnect Day

Legal – Notify appropriate entities of disconnect; coordinate last minute actions necessary

UW211/DHS – Provide on-site support to tenants

Corp Comm – Additional media support if needed

Regional Relations – Notify appropriate legislative entities

ECAC – Response Team

Southwest Solutions – Provide housing solutions

Corp. Comm. – Prepare media announcement

Legal – Insure proper noticing; inform City of posting

Notify of Pending Disconnect:• Legal• Corp Communications• Regional Relations• Customer Service• Agencies• Legal Aide• Southwest Solutions

Visual documentation of posting

Sept. 11, 2009

Move Tenants Out

• Apartment in Landlord name• Tenants pay utility as part of

rent• Tenants primarily seniors

and low-income

Mo

ve

Ten

an

ts O

ut

Apartment Disconnect Communication Plan

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“Need Help?”

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Looking Ahead…

For Internal DTE Energy Use Only

• Developing new incentive-based payment plans tied to energy reduction to help customers reduce their utility burden – especially Slow Payers

• Establishing a Case Management One-Stop-Shop to help low-income customers all the way through the energy assistance process

• Working with state agencies to streamline access to assistance funding for customers

• Modifying collection strategy based on more refined customer behavior segmentation

• Enhancing customer office facilities and processes to reduce customer wait times and improve their overall experience

• Partnered with social agencies to apply to participate in Low-Income Rate Pilot sponsored by the Michigan Public Service Commission

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What More Can We Do?

For Internal DTE Energy Use Only

• While existing programs have proven successful, much more can be done to support the communities we serve

• We must be even more attentive to our customers’ needs during these difficult economic times

• We need to be more resourceful and innovative in developing new assistance programs

Energy Assistance Arrears

2008 YE $74M $503M

2009 YE $119M $436M

2010 Target $112M $389M