DTE Energy
Cost and Affordability
Trevor F. Lauer
Marketing Executive Council
Cost and Affordability
Affordability
Customer
Satisfaction
Countermeasures
Conclusion
2
Over time, Detroit Edison’s rates have increased at the
same time income decreased
Electric Rates (¢/kWhr)
• Rates are growing at a faster pace then
Michigan’s Disposable Income.
Disposable Income percent changes:
 2008: 3.8%
 2009: -0.3%
 2010: 4.0%
• Drivers of Rate Increases
 Environmental Regulations
 Energy Efficiency
 Renewables
 Deskewing
• Detroit Edison’s commercial rates are in
line with the national average
Disposable Income Source: U.S. Department of
Commerce, Bureau of Economic Analysis
3
Michigan’s unemployment rate is higher than the national
average at the same time DTE Energy has increased
collection efforts causing an impact on satisfaction
Unemployment Rates
DTE Energy Uncollectible Expense
$250
$213
Millions
$200
$171
$150
$119
$100
$46
$50
$135
$87
$78
$65
$58
$126
$74
$70
2006
2007
$116
$93
$58
$23
$29
2010
2011 YTD
$0
2008
Gas
Source: Michigan Labor Market Information
Bureau of Labor Statistics
2009
$52
Electric
Customers in arrears are decreasing over time
•
•
•
•
2008: 20%
2009: 15%
2010: 14%
YTD 2011: 14%
4
Cost and Affordability
Affordability
Customer
Satisfaction
Countermeasures
Conclusion
5
DTE Energy Customer Satisfaction
Overall Satisfaction with DTE Energy
88.0%
90%
85%
85%
85%
84%
85%
79%
77%
80%
76%
76%
75%
74.0%
72%
75% 71%
71% 69.6%
69%
70%
65%
60%
YE
YE
YE
YE
YE
YE YTD Q2
2005
2006
2007
2008
2009
2010
2011
Residential
Res 1st Quartile
Business: Unassigned
Bus 1st Quartile
• Despite the focus on our
customers and defect reduction,
customer satisfaction levels have
not improved
• Leading metrics, however, are
showing increased customer
satisfaction across our key
transactions
• The current drivers impacting
customers satisfaction are
Electric Delivery and Corporate
Image
6
Cost and Affordability
Affordability
Customer
Satisfaction
Countermeasures
Conclusion
7
DTE Energy is implementing multiple countermeasures
to help customers with cost and affordability
Residential
Customer
Segmentation
Energy
Efficiency
Customer
3.5M
Business
Customer
Segmentation
Michigan
Jobs &
Energy
Coalition
Community
Outreach
8
DTE has segmented residential into seven groups to
better target customer programs and services
Volume
Affluent Greens
Greens
443K
Greens
595K
Energy
Indifferent
464K
Budget DIY
510K
Cash Flows
340K
DIY Conservers
495K
Traditionals
546K
Characteristics
Programs
• Attuned to programs with environmental
attributes
• Most likely to be conserve energy
• Tech savvy, early adopters, use Internet
• Online energy
management tools
• Green Currents
• Solar & PEV Programs
• Average knowledge with saving energy
• Tend not to be early adopters
• Higher income spend more for products
Energy efficiency programs
• Home energy audits
• ENERGY STAR products
•
•
•
•
• Bill management or budget
programs
• Payment assistance programs
• Low-cost, no-cost energy
efficiency tips
Tend to be late adopters
Budget conscious
Believe it is important to save energy
May be willing to sacrifice comfort to save
money
• Feels comfort is more important than saving energy • Lower electric rate options
• Do not feel knowledgeable about conserving energy • Bill management or budget
programs
• Find it difficult to understand the payback of energy
• Payment assistance programs
efficiency
DTE Energy has segmented business customers into
six major verticals to better understand and assist
business customers
Manufacturing
•
•
Largest energy consumers and smallest customer segment among our service territory
Primarily Automotive, Primary and Fabricated Metals Manufacturing
Education/Health
/Government
•
•
Second largest energy consumers
Primarily K-12, Universities & Community Colleges, Hospitals, Assisted Living, Medical
Centers, Federal, State, County, Municipalities and Water & Sanitary businesses
Process Related
•
•
Third largest energy consumers
Primarily process businesses such as glass, chemical, rubber & plastics, paper
•
Second largest customer segment mainly consisting of big box non-food and food chains,
restaurant chains, lodging and wholesale food distributors
•
•
Largest customer group
Includes businesses such as national and regional financial institutions, insurance and real
estate, entertainment – stadiums, casinos, and theaters, and service orientated businesses.
•
•
Smallest energy consumers
Mostly telecommunications, electric and gas utilities and transportation and freight service
companies
Retail/ Wholesale
FIREES
Communication/
Utilities/ Trans
*Segmentation verticals will be revised in November based on further market analysis.
10
A rigorous defect identification and resolution process
has been implemented across key transactions to
drive continuous improvement
Call Backs
Call Closures
Voice of the
Customer
DTE Energy Overall DPMO (2011)
I Can Help
Key Transactions
•
•
•
•
Turn Ons/ Disconnects/Transfers
Outage
Billing
Collections
11
DTE’s contact strategy focuses on three key areas to
deliver stellar experiences across channels
Know the Customer
Help the Customer
Delight the Customer
3 X 5 Approach
• Web, Call Center, IVR
• Payment, Account Inquiry,
Outage, Collection Turn On
2
Drive a Deliberate Focus on
Business Customers
•
•
•
•
3
Expand the Edges
• Mobile
• Social Media
1
Segmentation
Stellar Service
Clean Handoffs
Easy Access
12
Energy Efficiency investment will create long-term
benefits for DTE Energy’s Customers
• DTE Energy’s EE investment will reach nearly $600
million by 2015
DTE Cumulative EE Investment
($ millions)
• By 2029, program investment will provide a total of
$4.5 billion of avoided costs to customers through
avoided costs
• The energy efficiency programs impact on
satisfaction is best measured by “helps customers
save money on energy bills.” Over the past four
years, customer ratings have increased
Helps Customers Save Money on
Energy Bills
13
Community outreach and employee engagement
continues to be central to DTE’s strategy to helping
customers
Community
Outreach
• DTE has had a long standing
effort with community outreach
with a particular emphasis on
Economic Development
especially with suffering
communities
• Build long-term sustainable relationships in
the community
Scope
Improve image of
DTE Energy through
community outreach
• Increase employee understanding and
commitment to our customer satisfaction
Scope
• Driving the mindset that every
employee is an ambassador of
DTE
• Utilize On-the-Ground activities to enhance
DTE Energy image
• Build a grass-roots network of allies
Employee
Engagement
• Engaging employees helps DTE
increase the number of advocates
in communities
• Establish connections within the community
to help identify customers in need
Create a customer
centric culture and
mindset among the
workforce
• Raise employee awareness of current
initiatives
• Help employees see a clearer line of sight
between their jobs and customer
satisfaction
• Create a sense of pride in employees
14
Examples of Community Outreach and Employee
Engagement
• 700 employees and their families participated over the Christmas Holiday
Meals on
Wheels
• 6,000 seniors served
• Initiative is being expanded beyond the Metro Detroit area in 2011
• Participated in THAW's Night of Warm Hearts
• A Customer Assistance Day was held to distribute raised funds
Weekend of
Giving
• Total funds distributed were $1.3 million
• Funds were distributed to assist 4,500 customers
• Initiative is being expanded in 2011 in both scope and length
• Employee volunteerism, with special emphasis on National Volunteer Week
Other Core
Activities
• Director Outreach Program which has resulted in both building stronger community
relationship and contributions and direct issue resolution
• A large number of forums and speaking engagements aimed directly at connecting with
and informing customers in need of assistance
15
The Michigan Jobs & Energy Coalition was created in
2007 to work towards an energy policy
Members
• Members include the Michigan Chamber of Commerce, the Michigan
Manufacturers Association, the Detroit Regional Chamber, the Michigan State
Building & Construction Trades Council, Consumers Energy, DTE Energy, and
nearly 300 other Michigan businesses and business growth organizations
• Members of the coalition gathered together to influence state policy
• Assure stable and affordable rates in Michigan
Goals
• Create an environment where businesses can grow
• Ensure power plants are built in the state
• Implement Rate Deskewing
Ongoing
Discussions
• DTE Energy’s account managers and regional government affairs representatives
meet regularly with businesses to introduce them to the coalition and engage them
in grassroots advocacy for the coalition’s goals
• MJEC representatives meet regularly with businesses and consumer groups
16
Cost and Affordability
Affordability
Customer
Satisfaction
Countermeasures
Conclusion
17
Conclusion
•
Affordability continues to be a challenge in Michigan
•
DTE is committed to customer satisfaction by improving customer
experiences through channel management and defect reduction
•
Continued focus on becoming the best operating utility across North
America
18