WCAI RESEARCH OPPORTUNITY...Associate Business Analyst, Economic Modeling Customer Energy Solutions Elea McDonnell Feit Executive Director, WCAI Ben Adams Research Director, WCAI Eric

KNOWLEDGE FOR ACTION

WCAI RESEARCH OPPORTUNITYLeveraging SmartMeter Data

to Increase Customer Engagement and Reduce Energy Consumption


Introductions

Karen ZelmarDirector, Pricing ProductsCustomer Energy SolutionsColin KerriganAssociate Business Analyst, Economic ModelingCustomer Energy Solutions

Elea McDonnell FeitExecutive Director, WCAI

Ben AdamsResearch Director, WCAI

Eric T. BradlowK.P. Chao Professor

Professor of Marketing, Statistics, and Education Vice-Dean and Director, Wharton Doctoral Programs

Co-Director, WCAIPeter S. Fader

Frances and Pei-Yuan Chia ProfessorProfessor of Marketing

Co-Director, WCAI


PACIFIC GAS & ELECTRIC

TRANSFORMING BUSINESS THROUGH CUSTOMER DATA3


About PG&E

• Among the largest utilities in the world

• Delivers power to 15 million people

• 70,000 sq. mile service territory

• Over 50% of electric supply from renewable and/or carbon-free sources

• Leverage big data to deliver safe, reliable, and affordable gas and electric service to our customers


Big Data and Analytics at PG&E

• Why it matters:– Sources rapidly increasing– File size matters– Optimized data structures– Innovative database analytics– Provide safe, reliable, gas, electric and generation operations

• What lies ahead:– Cleaner and sustainable energy future– Enable energy independence through Smart Grid– Install powerful new technologies to improve public safety and service

reliability– Increase use of social media for energy management


Research Questions

TRANSFORMING BUSINESS THROUGH CUSTOMER DATA 6

• Can we use the SmartMeter data to achieve greater customer engagement? – Segmentation: Can we cluster customers by usage and use this segmentation to better target

MarCom and to develop new service offerings?

– Marketing Effectiveness: Are there better ways to drive behavioral changes in how users interact

with PG&E, specifically changes in when customers use energy?

– What is the relationship between engagement and usage?

– What is the relationship between household demographics and usage?

• How does having access to SmartMeters change energy consumption?– Does installing a SmartMeter have a causal effect on energy usage? Do other interventions change

energy consumption?

– Do users who access SmartMeter information have different energy consumption patterns?

• SmartMeters enable sophisticated pricing strategies, for example, where prices vary by time-of-day.– What pricing strategies are acceptable or appealing to customers?


SmartMeters

Once upon a time…

Once every month…

Rain, shine, or snow…



SMARTMETERS


• Installation starting in 2007

• Transmit homes’ energy usage every 15 minutes, hour or day

• Creates opportunities for customers to save money and energy in various ways

Additional information available at:http://www.pge.com/myhome/customerservice/smartmeter/


CUSTOMER DATA PRIVACY


For PG&E, protecting customers’ information and privacy is a top priority. PG&E takes extensive measures to ensure the integrity of our systems and to secure and protect customers and customer data. Contractors acting on PG&E's behalf are required to comply with our privacy policy.

The data set doesn’t include customer name, identifiable customer ID, and customer address. The data set was anonymized by assigning a unique pseudo-ID to each unique ID. Every ID record in the data tables was then cross referenced and replaced with its corresponding pseudo-ID.

There is a non disclosure agreement that must be signed by each institution of successful proposals. Individual researchers cannot sign on behalf of institution.

Agreements must be signed before data can be distributed.

Copies of the agreement are available on request to: [email protected]


ABOUT THE DATA


Sample Set• 36 months: January 1, 2009 - December 31, 2011• 30,000 residential customers randomly sampled from the active customer

base at December 31, 2011

Energy Usage Data• Traditional Metering Data (Monthly)• SmartMeter Installation Date• Gas SmartMeter (Daily)• Electric SmartMeter

(15 minutes or Hourly)

Psychographic Data

Billing

Activity Data• Energy Efficiency Programs & Rebates• Call Center and Help Tickets• Pricing• Outbound Marketing

Additional• Local Climate Data• Education• Demographic


ABOUT THE DATA


Sample Set• 36 months: January 1, 2009 - December 31, 2011• 30,000 residential customers randomly sampled from active customer




Psychographic Data

Billing




SMARTMETER INSTALLATION DATES


NotInstalled

NotInstalled


THREE DISTINCT CLIMATE AREAS


Average daily temperature,humidity, rainfall are generallysimilar across climate areas

Locations




Locations





Locations





Locations

White areas may include areasnot covered by data set.


SMARTMETERS: ELECTRIC INSTALLATIONS


Variation in when and who received SmartMeters

NotInstalled

NotInstalled


SMARTMETERS: GAS INSTALLATIONS


Not all SmartMeters were installed equally

NotInstalled

NotInstalled


Average monthly energy consumption changes throughout the year and is dependent on Climate Area.

TIMING MATTERS



BOB'S STORY


Premise A: San Pablo

SmartMeter Read

10/3/2009 12/31/2011


BOB'S STORY



BobMoves In

BobMoves Out

10/3/2009 12/31/2011


BOB'S STORY



Premise B: Oakland

BobMoves In

BobMoves Out

BobMoves In

BobMoves Out

10/3/2009 12/31/2011


BOB'S STORY



Premise B: Oakland

BobMoves In

BobMoves Out

BobMoves In

BobMoves Out

Avg. Bill = $29.02

Avg. Bill = $20.59

10/3/2009 12/31/2011


BOB'S STORY



Premise B: Oakland

BobMoves In

BobMoves Out

BobMoves In

BobMoves Out

SmartMeter Read

SmartMeter Read

Avg. Bill = $29.02

Avg. Bill = $31.41

Avg. Bill = $22.66

Avg. Bill = $20.59

10/3/2009 12/31/2011


ABOUT THE DATA


Sample Set36 months: January 1, 2009 - December 31, 201130,000 residential customers randomly sampled from active customer base at December 31, 2011Spanning a range of different climates



Psychographic Data

Billing




PSYCHOGRAPHIC PROFILES


Customers were assigned to 11 different “persona clusters” (4 shown) based on various demographic characteristics.

Week


ABOUT THE DATA






Psychographic Data

Billing




Billing and Payments


Remember Bob?




ACCOUNT_ID_PSEUDO PREMISE_ID_PSEUDO bill_date Therms Gas_Bill_Amount kWh Electric_Bill_Amount193469 861988 10/16/2009 na na 77 $6.74193469 861988 11/17/2009 na na 321 $28.11193469 861988 12/16/2009 na na 609 $53.61193469 861988 1/15/2010 na na 560 $49.02193469 861988 2/17/2010 na na 380 $33.26193469 861988 3/19/2010 na na 335 $29.33193469 861988 4/19/2010 na na 285 $24.95193469 861988 5/18/2010 na na 300 $26.26193469 861988 6/20/2010 na na 273 $23.90193469 861988 7/20/2010 na na 220 $19.49193469 861988 8/19/2010 na na 276 $24.61193469 866023 10/5/2010 11 $10.55 121 $10.64193469 866023 11/3/2010 19 $17.76 176 $15.48193469 866023 12/6/2010 23 $19.27 229 $20.15193469 866023 1/4/2011 23 $20.22 246 $21.63193469 866023 2/3/2011 24 $21.46 240 $21.13193469 866023 3/7/2011 21 $11.79 225 $19.81193469 866023 4/6/2011 23 $20.43 197 $17.34193469 866023 5/6/2011 22 $20.45 222 $19.54193469 866023 6/6/2011 20 $18.98 222 $19.53193469 866023 7/7/2011 17 $17.80 195 $17.16193469 866023 8/5/2011 23 $24.95 233 $20.81193469 866023 9/4/2011 24 $25.28 253 $22.73193469 866023 10/5/2011 22 $21.89 355 $32.75193469 866023 11/3/2011 19 $17.79 287 $26.16193469 866023 12/4/2011 25 $21.63 273 $24.04




ACCOUNT_ID_PSEUDO PREMISE_ID_PSEUDO PAYMENT_DATE Gas_Payment Electric_Payment193469 861988 11/13/2009 na ‐$6.74193469 861988 1/22/2010 na ‐$60.00193469 861988 2/7/2010 na ‐$30.00193469 861988 2/22/2010 na ‐$35.00193469 861988 3/20/2010 na ‐$20.00193469 861988 6/18/2010 na ‐$45.00193469 861988 7/9/2010 na ‐$26.00193469 866023 9/27/2010 na ‐$25.00193469 866023 2/11/2011 ‐$37.72 ‐$10.96193469 866023 3/10/2011 ‐$21.86 ‐$23.14193469 866023 6/17/2011 ‐$32.81 ‐$35.19193469 866023 8/3/2011 ‐$111.27 ‐$109.73193469 866023 11/2/2011 ‐$25.60 ‐$22.40193469 866023 12/1/2011 ‐$24.06 ‐$35.94

Payment Method Dataincluded in data set, available after NDA.

Payment Methods include:- Check- Money Order- Cash- Electronic Funds Transfer- Payment Processing Center- Pay-by-Phone

and 23 other methods


ABOUT THE DATA






Psychographic Data

Billing




REBATES


Customers can submit applications for rebates for energy-saving purchases and investments in their homes.

5,681 applications for rebates were submitted altogether. 59% were accepted.

Most rebates were for appliances followed by heating/ac, lighting, recycling devices and water heating improvements.

“Other” contains: Building Shell, Customized

Measure, Water Heating, Integrated Building,

Pumps/Motors

Rebate Data includes: date submitted, date accepted, and whether or not application was accepted. NOTE: reason for refusal not included.


CUSTOMER PROGRAMS


The majority of customers do not participate in any plan.

Customers can sign up for one or more programs:

- CARE/Other Plans

- Balanced Payment Plan

- SmartAC(remote device controlling AC)

- Direct Access(energy from another supplier)


ABOUT THE DATA






Psychographic Data

Billing




CRM Data – Call Center


• When a customer runs into trouble with their service, a “help ticket” is created as part of the CRM system.

• Of the 11,232 records in the data, ~64% were for the following categories:


CRM Data – IVR


• Interactive Voice Response is automated voicemail which can address one of many issues.

• On average electric customers placed 3 calls to IVR in 2011; with a large handful of customers heavily skewed toward a large number (30+) calls during the year.

• The most common reasons for calling were:


ABOUT THE DATA






Psychographic Data

Billing




PRICING – RATE PLANS


Energy regulation fixes electricity prices across customers within climate bands, except in some cases.

Within climate bands, prices vary for time of year (winter prices and summer prices) and plan type.

The majority had traditional plans (E1) or income-qualified plans (E1L).

Similar rate plan distribution for Gas.

We have specific rate plan data for both electric and gas.


OUTBOUND MARKETING


Direct Mail, Email, Phone used to promote programs or inform customers of other initiatives.

Reminder to use MyEnergy portal

High energy use notice

Energy use relative to neighbors notice

Data set only contains campaigns that were tracked


MYENERGY PORTAL


Customers can log in to see energy usage, pay a bill,or enroll in a program.

Reminders to use the portal are a frequent campaign subject.


MYENERGY PORTAL


We have last login date for each customer in the data, but no history. However, there is opportunity to study usage, patterns, or program participation by login recency.

Customers who Logged in x Months Ago (from now)


ABOUT THE DATA






Psychographic Data

Billing




Additional Data


• Local Climate Data– Temperature, precipitation– Daily during data window

• Education– Highest level attained– By account/household

• Demographic Data– Census blocks– Additional data available at: census.gov


DATA Q&A

TRANSFORMING BUSINESS THROUGH CUSTOMER DATA44


Why should you submit a proposal?

• Access to unique data

• Simple, efficient proposal process

– Proposals due 2-3 weeks after the webinar

– Data awarded about 4-6 weeks after the webinar

• Assistance with data cleaning and preparation

• Teleconference Q&A sessions with the corporate sponsor

• Invitation to a private symposium (typically at Wharton) to share your research findings with the corporate partner about a year from now

• Promotion of your research paper through the WCAI SSRN Research Paper Series


Proposal Format


Proposals should be no more than 2,000 words and include the following:• Title• Author(s) name, title, affiliation and e-mail address: Please designate a

corresponding author.• Abstract• Introduction: Describe expected contribution(s), covering both the academic and

practical aspects. Please keep it concise, and cite relevant work as necessary to explain your academic contribution. There is no need to include a lengthy literature review.

• Detailed Project Proposal: Describe the proposed research. Please include enough detail that we can assess the feasibility and merit of the proposed approach. For example, modeling projects should include at least a sketch of the model. Experimental projects should include an outline of the research design. Please also include a rough estimate of how long the project will take.

• Biographies: Include up to a paragraph-long biography highlighting what each team member will contribute to the project.


Proposal Submission Process


• Read more about the proposal format at http://www.wharton.upenn.edu/wcai/Proposals.cfm

• Submit proposals at http://www.wharton.upenn.edu/wcai/proposalform.cfmno later than Friday, November 9, 2012.

– Proposals will only be accepted online.

• Proposals will be evaluated both on academic contribution and potential to significantly improve the research sponsor’s marketing practice.

– Anand Bodapati (UCLA), Eric Bradlow (WCAI), Pete Fader (WCAI), Elea Feit (WCAI), and representatives from PG&E.

• Contact [email protected], if you have questions prior to submitting your proposal.


Other WCAI Opportunities for Researchers


If you registered for this webinar, you will receive regular announcements about:

• Research Opportunities like this one

– Employee and Customer Satisfaction in Repeat Transactions: December 2012

– Online Ratings across multiple channels/brands: January 2013

– General Motors: February 2013

• Grant/funding opportunities

Also find us at:

• SSRN Research Paper series: http://www.ssrn.com/link/Wharton-Cust-Analytics-Initiative-RES.html

• Announcements: http://wcai.wharton.upenn.edu

KNOWLEDGE FOR ACTION TRANSFORMING BUSINESS THROUGH CUSTOMER DATA 49

Documents

WCAI RESEARCH OPPORTUNITY...Associate Business Analyst, Economic Modeling Customer Energy Solutions Elea McDonnell Feit Executive Director, WCAI Ben Adams Research Director, WCAI Eric