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SRP M-Power ®A Customer Preference
For Pre-Paid Electric Service
Michael LoweCustomer Services Executive
Salt River Project
Customer Services’ Vision
We generate customer and community satisfaction with SRP through innovative and cost-effective customer services delivered in a consistent and timely manner. Customers find doing business with us to be rewarding, easy, and pleasant.
Credit Activity Consumes Substantial Resources in
Customer Services
• Out of 867,000 customers in August 2005:• 74,000 called regarding credit issues• 66,000 made face-to-face payments
(typically last minute)• 164,000 were billed late fees• 17,000 received field notices or were
disconnected
Prepay Case Study – Mr. MarshallDate of Purchase
Amount of Purchase
Amount to Card
Amount to Arrearage
Arrearage
Beg. Bal.=$595.60
6/9/05 $20.00 $12.00 $8.00 $587.60
6/13/05 $20.00 $12.00 $8.00 $579.60
6/15/05 $ 3.00 $ 1.80 $1.20 $578.40
6/16/05 $20.00 $12.00 $8.00 $570.40
6/18/05 $ 5.00 $ 3.00 $2.00 $568.40
6/19/05 $ 3.00 $ 1.80 $1.20 $567.20
6/20/05 $ 9.00 $ 5.40 $ 3.60 $563.60
6/21/05 $ 5.00 $ 3.00 $2.00 $561.60
6/22/05 $12.00 $ 7.20 $4.80 $556.80
6/23/05 $ 5.00 $ 3.00 $2.00 $554.80
6/24/05 $ 3.00 $ 1.80 $1.20 $553.60
6/25/05 $ 6.00 $ 3.60 $2.40 $551.20
6/26/05 $ 7.00 $ 4.20 $2.80 $548.40
6/27/05 $ 3.00 $ 1.80 $1.20 $547.20
6/28/05 $ 6.00 $ 3.60 $2.40 $544.80
6/30/05 $ 9.00 $ 5.40 $3.60 $541.20
Prepay Case Study – Mr. Marshall(cont.)
Date of Purchase Amount of Purchase
Amount to Card
Amount to Arrearage
Arrearage
Beg. Bal = $595.60
7/05 – 24 purchases $286.00 $171.60 $114.40 $426.80
8/05 – 24 purchases $222.00 $133.20 $ 88.80 $338.00
9/05 – 24 purchases $157.00 $ 94.20 $ 62.80 $275.20
11/05 – 24 purchases $ 74.00 $ 44.40 $ 29.60 $202.80
10/05 – 25 purchases $107.00 $ 64.20 $ 42.80 $232.40
12/05 – 21 purchases as of 12/19/05
$ 70.00 $ 42.00 $ 28.00 $174.80
M-Power is AboutCustomer Satisfaction
…A better way to keep customers in power
Our Customers Speak
“The M-Power program has brought a comfort level that I’ll not get a bill I can’t pay.” Leah
Leah
“There were times when I got turned off and would have had to pay a deposit of $150. I couldn’t do it…I wouldn’t trade M-Power for anything in the world.”David
David
Our Customers Speak
“What I like most is the display box. It’s like a car. You put gas in and you know how much you’ve usedand how much you have left. Youfind out what appliance wastes themost energy.” Rebecca Rebecca
“If I had a choice today, betweenM-Power and the standard plan withbills every month, it’d be a no-brainer.I’d take the M-Power program everytime.” Johnny RayJohnny Ray
Community Based Organizations Speak
“If a customer is out for disconnection, he can apply his deposit money to his bill and get started on M-Power. This opportunity lets a percent go to the old bill and the rest for usage. This option is a useful tool to help the client become stable.”Marcie
Marcie WidmerCase WorkerCity of Phoenix
Community Based Organizations Speak
“In the M-Power environment, we can help with one or two weeks of power vs. a two or three month delinquent bill. It’s hard to come up with funds to do that.” Ray
Ray Heifley, VolunteerSt. Vincent de Paul Society
Community Based Organizations Speak
“We’re a non-profit with HUDas a funding source. BeforeM-Power, it was not a good experience because Save theFamily is required to pay the electric bill. It was difficult toget clients to not stand with therefrigerator door open, or the outside door that lets in heat. Now we give clients a smart card and they monitor their usage and make the power last. M-Power changes our clients behavior.” Janice
Janice ParkerExecutive DirectorSave the Family Foundation
The Issue with Traditional Service
• Electricity is intangible and is sold on credit.
• Life skills and mindset are required to manage the household electric bill.
Real-Time InformationMakes Electricity “Tangible”
•Current cost per hour is $0.xx•Rate Y charge is $x.xxxx/kWh•Cost today is $x.xx•Cost yesterday was $x.xx•Cost this month is $xx.xx•Cost last month was $xx.xx•Enough credit for xx days•Remaining credit is $xx.xx
In-Home Display Unit
How Does M-Power Work?An Integrated System
Vending Solution
Customer In-home display
(English or Spanish)
BackOfficeSystem & CIS
M-Power Growth
0100002000030000400005000060000700008000090000
100000
Sep-
99
Sep-
00
Sep-
01
Sep-
02
Sep-
03
Sep-
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Sep-
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Sep-
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Actual Forecast
40,000 Customersin December 2005
Customer Experience• Average purchase
• $17.90
• Average # of purchases per month• Summer = 7• Winter = 5
• Average # of customers who disconnect per month = 20%• Of these, average #
of disconnects per month = 2
• Savings• Summer
• 13.8% decrease
• Winter• 11.1%
decrease
• Annual• 12.8%
decrease
Customer Benefits of PrePay
Credit PrePay
Deposits $200 $99
Late Payment Fees
$4.45 or 2% of current
billing amount + tax
$0
Disconnect Fees
$57.50 $0
Utility Benefits of PrePay(Avoided Costs for One Customer for One Year)
Read meter (12 per year) $ 11.16
Prepare and send bill (12) 28.56
Send disconnect notice (8) 2.96
Calls to request extension (6) 48.78
Payment at Business Office (8) 18.00
Reconnect (1) 65.00
Write-off 25.00
Total $199.46
Summary of Benefits
• For Customer• Reduced consumption/outlays• Puts customer in control
• 95% of customers tell us they have more control over electric usage
Summary of Benefits
• For Utility• More satisfied customers
• 84% of M-Power customers are very satisfied or satisfied with the program
• Avoidance of negative interactions• Reduced write-off
Summary of Benefits
• For Both• A better way to keep customers in
power
M-Power is About Customer Satisfaction
1999 – Residential2000 – Residential2002 – Residential2003 – Residential2004 – Residential2004 – Commercial2005 – Residential2005 – Commercial