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Engaging Customers in Challenging Times Greg Dudkin, PPL Electric Utilities MEC Conference Los Angeles, CA October 3, 2011

Engaging Customers in Challenging Times Greg Dudkin, PPL Electric Utilities MEC Conference

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Engaging Customers in Challenging Times Greg Dudkin, PPL Electric Utilities MEC Conference Los Angeles, CA October 3, 2011. Background: PPL’s Challenge of Deregulation. PA deregulated electricity marketplace effective 1999 Settlement kept PPL’s generation rates stable until Jan 1 2010 - PowerPoint PPT Presentation

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Page 1: Engaging Customers in Challenging Times Greg Dudkin, PPL Electric Utilities MEC Conference

Engaging Customers in

Challenging TimesGreg Dudkin, PPL Electric Utilities

MEC Conference

Los Angeles, CA

October 3, 2011

Page 2: Engaging Customers in Challenging Times Greg Dudkin, PPL Electric Utilities MEC Conference

Background: PPL’s Challenge of Deregulation

PA deregulated electricity marketplace effective 1999 Settlement kept PPL’s generation rates stable until Jan 1 2010

Smart meters deployed for all 1.4 million customers since 2004

Expiration of PPL EU’s generation rate cap in 2010 drove customer bills 30% higher, and gave competitive suppliers an opportunity

Generation shopping is very active: 39% Residential customers (44% of sales) 45% Small C&I customers (82% of sales) 90% Large C&I customers (99% of sales) 40% of all customers (>560,000 customers, 73% of sales)

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Page 3: Engaging Customers in Challenging Times Greg Dudkin, PPL Electric Utilities MEC Conference

Background: PPL’s Challenge of Aging Infrastructure

Now PPL’s aging infrastructure is driving need for major system investment of $3.5 billion over next 5 years Multiple rate increases needed Stable return to investors expected

So how do we accomplish this?

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Page 4: Engaging Customers in Challenging Times Greg Dudkin, PPL Electric Utilities MEC Conference

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Background: PPL’s Challenge on Wall StreetThe need to stabilize future return on equity is imperative to our credibility with investors

RO

E

HISTORIC FUTURE

Allowed ROE

Page 5: Engaging Customers in Challenging Times Greg Dudkin, PPL Electric Utilities MEC Conference

We need to gain the trust of the all stakeholders

Customers, Regulators, Legislature, and Wall Street

All have a hand in the rate making process in PA

To move forward with these stakeholders, we need to gain/maintain their trust…but how?

Past performance is huge

Position service enhancements from Smart Grid and other infrastructure improvements as beneficial to all parties

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Page 6: Engaging Customers in Challenging Times Greg Dudkin, PPL Electric Utilities MEC Conference

Improving quality of service, while keeping bills manageable -- has a

distinct payoff

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Virtuous Circle Vicious Cycle

Page 7: Engaging Customers in Challenging Times Greg Dudkin, PPL Electric Utilities MEC Conference

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Earning Trust with customers

Page 8: Engaging Customers in Challenging Times Greg Dudkin, PPL Electric Utilities MEC Conference

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The Energy Analyzer worked

The Energy Analyzer leveraged the technology (AMI) giving customers information that put them back in control….

On-line energy audit

Daily usage info

Home profile and energy-saving tips

Pie charts of home energy use

Bill comparison charts

Page 9: Engaging Customers in Challenging Times Greg Dudkin, PPL Electric Utilities MEC Conference

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Daily and hourly energy use charts gave them customized

information

With PPL EU offering Time-of-Use rates to customers in 2011, the hourly charts became more important to customers

Daily charts have become a major draw to bring customers back to the

PPL Electric website

Page 10: Engaging Customers in Challenging Times Greg Dudkin, PPL Electric Utilities MEC Conference

What we believe

Technology is not the total answer, but an enabler… Customers want control of

their energy use Information is a key

deliverable

• Customers want communication that fits their needs, delivered how they want it, when they want it

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Smart Grid needs to be positioned not as a utility driven technology but as a service enhancement that meets the customers’ needs…. shorter/fewer outages, save energy and save money.

Page 11: Engaging Customers in Challenging Times Greg Dudkin, PPL Electric Utilities MEC Conference

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PPL’s high customer satisfaction and efforts to reduce customer bills helped

weather the rate cap challengeSpring 2007, first announcement of

~35% increase to hit Jan 1 2010 (semi- annual updates followed)

Redesigned web site featuring Energy Analyzer deployed in June 2007

PPL EU adds daily & hourly usage data to web site; launches efficiency programs to

help customer save and to position as “trusted energy advisor”

Fall 2009, PPL EU launches comprehensive EE&C plan that significantly augments programs

for customers; media campaign to promote “shopping”

Jan 1 2010, rate caps expire - overall bill increases 30%

Page 12: Engaging Customers in Challenging Times Greg Dudkin, PPL Electric Utilities MEC Conference

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High Performance means….be there when they need you the

most

Page 13: Engaging Customers in Challenging Times Greg Dudkin, PPL Electric Utilities MEC Conference

Perform at a high level – it helps to be a leader Understand that high performance is earned

over years, and lost in days! Communicate with them regularly– they

don’t want to be surprised either!Share your plans and directionSeek their supportHelp them and assist them where possibleEducate them about your business

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Building Trust through Relationships with Legislators

and Regulators

Page 14: Engaging Customers in Challenging Times Greg Dudkin, PPL Electric Utilities MEC Conference

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The successful utility will ….

Page 15: Engaging Customers in Challenging Times Greg Dudkin, PPL Electric Utilities MEC Conference

Questions?

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Greg DudkinSr. VP OperationsPPL Electric Utilities

[email protected]