SCE program connects with the hard-to-reach

Michael McGrath, EEI

Southern California Edison (SCE) took a rather ordinary load management program and gave it an anything-but-ordinary marketing approach to sign up its hard-to-reach rural and ethnic business customers. The result was over 7500 requests for program participation, with 4,000 thermostats installed as of the end of October.

The SCE Energy$mart Thermostat program also earned SCE a share of the Peak Load Management Alliance’s 2002 Demand Response Award Program of the Year and the recognition of the Association of Energy Services Professional’s award for Innovative Marketing for 2002.

Following the electricity crisis in the summer of 2000, the state of California mandated that SCE find a new means for implementing demand responsiveness for small business customers. SCE has over 4.3 million service accounts, of which nearly 400, 000 fall in the small business category. This market is concentrated in the coastal and inland valleys (L.A. basin) of southern California, with 20 percent of the market in outlying rural areas.

Defined as “hard to reach,” this small business segment is made up of unassigned SCE accounts that are included in mass-market outreach efforts and are usually not very responsive to traditional program marketing activities. The following are typical characteristics of these “hard to reach” customers:

“- the business is less than 10 employees,
“- English is a second language,
“- outside the Los Angeles/Orange County Basin.

The SCE demand response pilot enables the utility to control the customers’ thermostats using the Internet. Through the SCE Energy$mart Thermostat program, the equipment is installed free and at the end of each year, the customer receives up to $300 for program participation and keeps the thermostat.

SCE can adjust the set point for 2 to 4 hours up to 4 degrees above the existing set point. Customers have the flexibility to override the thermostat control action, but can lose a portion of their annual incentive for each override.

To develop key messages about the SCE Energy$mart Thermostat program for its target audiences, SCE applied a two-phase market research effort to collect customer feedback to the program. The first was conducting focus groups with small business owners and operators in the outlying areas surrounding Los Angeles and Orange County.

Second was a follow-up telephone survey combined with a conjoint analysis conducted with a sample of 500 small business customers. Varying incentive levels, temperature set points, test duration periods, and an examination of the program value propositions were examined with customers to determine their acceptance levels. These data were analyzed and used to enhance program design and develop both the program direct mail brochures and fact sheets.

Both the PLMA and the AESP viewed the SCE Energy$mart Thermostat program as an excellent example of outreach to the area’s critically important, but hard to target and multi-ethnic small business population. The program was promoted in Spanish, Chinese, Vietnamese and Korean, as well as English.

Among the non-traditional tactics used by Edison to reach these customers were:

“- working with ethnic-owned advertising agencies to develop content for ethnic newspapers and radio stations that would convey the flavor and idiomatic expressions of each audiences’ particular language;
“- meeting with rural Chambers of Commerce, with business organizations, and with Pacific-rim business associations;
“- garnering the support of rural town business managers, who promoted the program using their town’s letterhead along with SCE’s materials;
“- door-to-door sign-ups using “feet on the street.”

To date, test curtailments have shown coincident demand reductions of at least 1.5 kW per thermostat for moderate to high temperatures. The SCE Energy$mart Thermostat pilot program will run through 2004.

Michael McGrath is EEI’s executive director of retail energy services.

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