PG&E Case Study on Critical-peak Pricing

Association for Demand Response & Smart Grid

The Association for Demand Response & Smart Grid (ADS) released a new case study that examines engaging customers around a critical-peak pricing program based on interviews with Pacific Gas & Electric (PG&E) employees about the utility’s SmartRate program, which began in 2008 and now enrolls 100,000 customers in critical-peak pricing.

The narrative-style case study is the third in an ADS series that goes behind the scenes to examine the goals, reasoning and processes used to design and evaluate program offerings and tools.

The PG&E SmartRate program was chosen as a case study subject because of its focus on customer service and its long-range view of program design. The case study, funded by the Department of Energy’s Office of Electricity Delivery and Energy Reliability, explains that the following are among the lessons learned by PG&E in implementing the SmartRate Critical Peak Pricing Program.

    1. Start with segmentation. Success depends on customer participation, so make the most of the resources used to acquire and keep customers. Conduct thorough segmentation analysis before the program begins and choose a realistic customer target.

     2. Focus on customer satisfaction. Design a communication strategy and the rate program with a single objective: to create a clear, convenient, relevant customer experience. Even the way customers who don’t succeed on the program are treated affects market transformation.

     3. Create cross-functional delivery teams. Do not release a product until it is clear every functional team can deliver what customers say they want and need. Then create a program team that is responsive to customers all up and down the delivery chain. Every team member, from the IT team to CSRs, should have the potential to positively impact the customer experience.

     4. Put smart meter data to proper use. The ability to combine the personalized insight of interval data with management tools can create more value for consumers, but only if driven by an intention to serve customers better.

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