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March 25, 2015
Customer Centricity & Growing Consumer
Imperatives that Drive Innovation
Jose Antonio T. Valdez
Vice President & Head,
Marketing, Customer Solutions & Product Development
MANILA ELECTRIC COMPANY
A presentation for the 2nd Southeast Asia Utilities Innovation Forum
OUR COMPANY2
We are part of a bigger group…
OUR COMPANY2 33
The franchise area of MERALCO is the seat ofeconomic, political and social activity in thecountry.
25%
112
50%60%
3%
years in service
of Philippine land areaof total Philippine populationof Philippine GDPof Philippine manufacturing output
55% of Philippine electricity sales
OUR COMPANY2 44
MERALCO is the largest distribution utility in the country.
114 substations
855 circuits
10 sector offices
213 power transformers
160,621 distribution transformers
50+ customer touchpoints
Primary Distribution
Secondary Distribution
Sub-Transmission
Transmission
Generation
USD($) 7.2 B Market Capitalization*As of Feb. 28, 2015
OUR CUSTOMERS2 55
MERALCO segmented customers to answer their unique needs
CORPORATEBUSINESS
HOME & MICROBUSINESS
BUSINESS (small & medium enterprise)
5.5M customers35.2% of total energy sales
80.3K customers17.7% of total energy sales
16.4K customers47.1% of total energy sales
14,6791,571 + 285 conglomerate
= 1,856 Corporate accounts
1,756National Government
Units
5.1 M Households
18,366LGU Accounts
367,260 Microbusinesses
59,950Small
20,343Medium
5
OUR CUSTOMERS2 66
MERALCO utilizes various research studies to better understand customers
Accelerate
your digital
business
Embrace the
mobile shift
Transform the
customer
experience
Turn big data into
business insights…
possibly monetize
7Source: The CIO's And CMO's Blueprint For Strategy In The Age Of The Customer, Forrester Research, Inc.
Why do we want to do this?
“Meralco will be an internet company with a power business” -Manuel V. Pangilinan (MVP), Meralco Chairman
“This is our future…” - Gavin Barfield,
Chief Technology Officer
“We want to be a customer-centric company…”
- Al Panlilio, Customer Retail Services & Corporate Communications Head
“ We have the fiduciary right to help our customers save…” - Oscar Reyes, President & CEO
7
TOP CONCERNS2 88
What are the top concerns of our customers, our country and our people
Affordable Rates Continuous Supply
Estimated Timeof Restoration (ETR)
2 912
Price, efficient service and product qualityARE PART OF AN EQUATION.
VALUE FOR MONEY
DENOMINATOR: PRICE =VFMPRICE
(Reasonable Payment)
NUMERATOR: BENEFITS
Interaction with Personnel
Programs, Solutions,
Communication
Bill Transparency
Good Service & Product Quality
Value For Money
Source: 2014 Customer Satisfaction Index, October 2013, Synergy Business Consultancy
21014
Major Drivers of Customer Satisfaction
VALUE FOR MONEY
Affordable Rate Continuous Supply
Estimated Timeof Restoration (ETR)
21115
INTELLIGENT GRID
Value:
1 + 1 < 2
1 + 1 > 2
Cost:
Intelligent Grid is an integrated solution to
deliver VFM
PREPAID ELECTRICITY SERVICE
Offers customers the ability to monitor
and manage their daily consumption and
the flexibility to pay their electric bill by
loading in smaller denominations
Empowering customers to consume
energy efficiently and within their
budget.
Target by Dec 2015: 40K customers
Target by June 2016: 140K customers
19
Research Background
134 March 2015
1. To understand the customer experience of PRES
a. Determine benefits and disadvantages of PRES, and if adjustments need to be made
b. Gain insights on consumption behaviors under PRES/ how households adapt to the new system
2. Fieldwork dates: June 28 to July 15, 2014
3. Conducted by an external research agency
4. Within pilot areas in Angono, Taytay, and Cainta, Rizal
5. Face-to-face interviews among 150 Meralco PRES customers with an average of three months experience under PRES
6. Customer meter data from Meralco’s Marketing Decision Support System (MDSS)
21
90% of customers are satisfied with KLoad
3%7%
32%
58%
Very satisfied
Somewhat satisfied
Somewhat not satisfied
Not satisfied at all
Overall Satisfaction with
‘Consumer goods’ hurdle rate is 40% for “very satisfied”
Social dimension of Kload
• Makes cash flow easy• No bill shock• Customers takes responsibility
for their own usage
More convenient cash flow
“hindi mabigat sa bulsa angpag load kasi mayroon
namang maliit nadenomination kung
magkanong denomination anggusto ko ay makakabili ako”
No bill shock“nakikita mo ang konsumo
mo na naisasama ko sabudget hindi katulad sa
post paid hindi mo agadalam ang babayaran mo
monthly.”
Q: On overall, how satisfied or not are you with the Kuryente Load/K-load?--Sa kabuuan, gaano kayo nasisiyahan o hindi sa Kuryente Load/K-load?
Comml Pilot Monitoring Research, June - July 2014, Synergy and TNS
90%Base: Total interviews (n=15)
14
22
Inclusive of segments previously
disenfranchised
Meralco System Control13
MERALCO GREEN AGENDA (MGA)
TO GENERATION
SUBSTATION
Meralco Green
Agenda (MGA)
Initiatives promoting
environmental sustainability
through emerging technologies
in the utility space
• Localized energy grid with the capability to
disconnect from the traditional grid and operate
autonomously
MICROGRIDS
• Programs aimed at managing the
amount or timing of a consumer’s
electricity consumption in response to
changes in electricity supply or prices
DEMAND RESPONSE
• Vehicles powered entirely or partially by
electricity
ELECTRIC VEHICLES
• Technology that directly converts light energy
into electricity using solar panels
SOLAR
25
MERALCO GREEN AGENDA (MGA)
Meralco-Net Lima EV Power Station
Initiatives for Meralco Green Agenda
Meralco EV Power Station
Renewable Energy POC
26
Ateneo eShuttle Service & Charging Station
MERALCO GREEN AGENDA (MGA)
Initiatives for Meralco Green Agenda
EV Philippine Summit
27
Meralco eBike Sharing Program
19
INTELLIGENT GRID
Value:
1 + 1 < 2
1 + 1 > 2
Cost:
Intelligent Grid is an integrated solution to
deliver VFM
28
Programs Affordable Rates Continuous SupplyEstimated Time of
Restoration
AMI
Consumption Control No Bill Shock OPEX Savings
Power Advisories Outage Map
ANA
OPEX Savings Reduction of System Loss Peak Demand Reduction
Improved Power Quality Automatic Power Outage
Detection / Isolation of disturbances(i.e. Line Faults)
Reliable delivery of Power Supply
Power Advisories Outage Map
MGA
Rate options (thru DR Programs)
Renewable energy sources Security of Power Supply Generation Diversity Minimal supply outage
20
Benefits of IG Initiatives
29
Challenges
33
1. Regulatory and Policy Frameworks• Cost Recoveries of Investments for Intelligent Grid
• Alignment of Polices and Regulatory Frameworks with Intelligent Grid Initiatives of Utilities
• Local and National Government Support (e.g. Enabling Laws, Ordinances, etc.)
• Incentives (e.g. Custom Duties, Efficiency, Commercial arrangements or contracts)
2. Strategic Direction• Shared Vision for Intelligent Technologies and Intelligent Solutions Deployment with
National Government and all power industry stakeholders (last working group meeting was Oct 2014)
3. Customer Education and Engagement
4. Harmonized Ecosystem• Interoperability between different networks (e.g. DUs, Transmission Utility)
• Data & Information Security
30
22
THANK YOU