Maximizing Energy Efficiency: Western Mass Saves Program

1. NW Regional Public Utility Behavior Based Energy Efficiency Programs Conference Call September 29, 2011 “Western Mass Saves” Program OverviewTony FornutoResidential Program AdministratorWestern Massachusetts Electric Co. Facilitated by Summer Goodwin, BPA

2. “Western Mass Saves” Program Overview Tony Fornuto Residential Program Administrator Western Massachusetts Electric Co.

3. Service Territory and Target Area • Service Territory • Customers: 182,000+ residential • Communities: 59 cities and towns • Service area: 1,500 square miles • Target Area (initial) • Treatment territory includes 8 communities: • Agawam • Amherst/Pelham • Easthampton • Ludlow • Montgomery • Springfield • Sunderland • West Springfield

4. Program Overview Multi-channel approach to capture broad and deep savings • Direct mail • Targeted email communication • Advanced web experience • Local community teams, contests and prizes More savings & less cost through deep customer engagement • Direct recruitment of customers online for ongoing engagement through personalized savings recommendations and information • Rewards given to customers based on energy saved Aggregate and individual savings tracked on a monthly basis using best practice bill analysis with comparison control groups 4 4

5. Program Overview • Goal: engage 5,000 customers • Online platform goes live November 2010 • 25,000 customers selected to receive reports • 25,000 customer selected as “control” (do not receive reports) • Reports designed to drive to online engagement 5 5

6. Using Direct Mail as a Tool for Engagement

7. Bill Inserts-Focus on Rewards Aspect

8. Community Engagement: Towns and Cities Example: Western Mass Saves Challenge • Towns compete to achieve 3% kWh savings • Local messaging, events and prizes • Online community pages and leader boards • Winning towns receive free solar panels on public building

9. Community Engagement: Schools and Classrooms Example: Amherst Classroom Challenge • Students sell EE products and acquire households into program • Revenue goes back to school EE efforts • Classrooms and schools compete based on total EE delivered and number of households acquired into online program

10. “Surround Sound” Marketing

11. Where Are They Coming From?

12. Online Experiences

13. Monthly Rewards Emails Have A 53% Open Rate!

14. Online Experiences

15. Opportunistic Messaging Drives Deeper Engagement…

16. Customer Receives Targeted Messaging

17. Recommendations & Explanations

18. Rewards: Keeping Customer Engaged

19. Community/Social Engagement

20. Using Direct Mail as a Tool for Engagement Benchmark Mailer- “Usage Comparison” resulting in a 0.51% conversion rate

21. Using Direct Mail as a Tool for Engagement Online Rewards 6% conversion rate

22. Scaling online rewards promotion in the mail…

23. Points Offered/Converted Customers The number of reward points offered is the largest factor in converting customers from direct mail to active engagement

24. Energy Savings: Direct Mail Impact * “Households” receiving mail at least once

25. Energy Savings: Online Participants

26. Positive Customer Reactions “The thing that I like most about Western Mass Saves is the ability to save money and even earn prizes if successful. The competitive edge in me likes those kinds of challenges. I also enjoy saving money and look at it as a challenge as well. We had Jeff come out and go through our house for the free energy audit and that was wonderful. He told us things about our home that we didn’t even know. We also were able to replace all our light bulbs with the CFL ones, so I anticipate that will show up as a reduction on future electric bills… Participating in this program makes me feel closer to WMECo and that maybe I have some control over the costs.” -Teresa B., Pittsfield, MA

27. Positive Customer Reactions “The program is a great way for the Company to interact with its customers… I think it tells me the Company is trying to work with customers to try to find ways for all of us to save.” “I like the fact the site provides ideas on ways to save electric use. Many I had already adopted but there were several that allowed me to increase my potential savings.” “I’d really like to see more options available for the customer in terms of uses for the points we earn in the savings process.” -Tom N., West Springfield, MA

28. Lessons Learned and Next Steps • Online channel seems more cost-effective and scalable than printed report channel • Rewards seem to be driving increased customer satisfaction and increased energy efficiency benefits for online participating customers • Strong engagement with customers (over 50% email open rate) but very little discernible call center impact due to vendor program support management • Third party evaluation needed to confirm savings and persistence • Expand local business, non-profit and service organization engagement with energy saving “teams”

29. Evaluation of Program Results

30. Evaluation Overview • Large-Scale Data Analysis leverages usage data and other data sources to provide accurate, timely and robust verified energy savings • Best practice Experimental and Quasi-Experimental design • “Opt-in” analysis eliminates selection bias through “rolling control” method • Data being reviewed by academics at Harvard and Stanford • Program being evaluated Opinion Dynamics, and ACEEE • Planning independent interim and final evaluations for pilot period

31. Control Group Considerations • Statistical tests determine heterogeneity in participant versus control bills • Regressions run for mean usage, geography, property characteristics, demographic characteristics, etc. to filter any biases • Temporal constraints imposed for rolling control group, with minimum of 500 control customers in each period • Bills normalized for duration through daily use values • “Passive” savings from customers who receive direct marketing, but do not sign up online executed through traditional experimental design, with random assignment

32. Resource Metrics • Gross Verified Electricity Savings: Program participants versus control group (difference of differences analysis) • Gross Deemed Savings: Total Deemed Savings from program participants • Net Deemed Savings: Total Deemed Savings minus difference of deemed savings between program participants and control group • Net Verified Electricity Savings: Gross Verified Electricity Savings minus Net Deemed Savings

33. Non-Resource (Process) Metrics • Acquisition Metrics • Website hits • Web sign-ups from Mailer and No-Mailer customers • Mailer customer opt-outs • Activation Metrics • Rewards program registration • Savings plan commitments • Engagement Metrics • Cross program referrals • Number and most common committed actions • Estimated resource savings from committed actions

34. Contact Info: Tony Fornuto Western Massachusetts Electric Co. Telephone: 413.787.9329 Email: fornuaj@nu.com