Capital O&M. Customer Operations. Work Description: Project/Program Title Digital Customer Experience Project Manager

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EXHIBIT___(CO-1) PAGE 1 OF 7 1

X Capital

O&M

Customer Operations

Project/Program Title Digital Customer Experience

Project Manager Michael Murphy

Hyperion Project Number PR.21088410

Status of Project Ongoing

Estimated Start Date January 2015

Estimated Completion Date December 2020

Work Plan Category Strategic

Work Description:

The Digital Customer Experience (DCX) program will deliver an improved online experience for customers, through a redesign that covers the www.coned.com external website, the mobile website, the “My Account” portal and the mobile app. The Company seeks to provide a best in class customer experience, by providing customers with better and more coordinated information across multiple channels. This will be achieved through a transformation of current digital offerings, new technology, improved analytics, and a new digital operating model. The DCX program will also enable efforts such as the Public Service Commission’s Reforming the Energy Vision (REV) proceeding and the Company’s Automated Meter Infrastructure (AMI) initiative, contributing to customer engagement opportunities. The program includes the purchase and implementation of new technology supporting enhanced digital interactions, development of a new web and mobile customer experience, and implementation of tools to support multi-channel communication such as chat, text and email.

The goals and objectives for the future state of the digital customer experience are as follows:

 Effectively meet the current and future expectations of a diverse customer base in an increasingly digital world.

 Provide customers a simple personalized experience (intuitive, engaging, and differentiated) across all digital touch points (web, mobile, apps).

 Deepen engagement with customers through improved customer usage analytics, behavioral segmentation, and engagement tools.

 Offer customer preference options to communicate on the customer’s terms via their preferred channel.

 Enable expansion of energy efficiency, demand response, and distributed energy resources, supporting REV goals and objectives.

 Improve storm response and outage communications.

 Improve customer satisfaction.

 Implement a robust, adaptable technology solution capable of supporting the future state customer needs.

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 Maintain customer data security across all device platforms and conform to all corporate cyber security and Personally Identifiable Information (PII) guidelines.

 Enable migration of customers to lower cost channels while maintaining operational excellence through the development and optimization of self-service functionality across all platforms (pay bill, start/stop service, enter meter readings, etc.)

In 2015, a program team was formed, and a Phase 0 analysis (planning phase) was completed. Output from the Phase 0 analysis included the following:

 Detailed assessment of the current www.coned.com website.

 Detailed assessment of current and future state digital capabilities.

 A future state technology blueprint.

 Selection of the core technology component, a Web Experience Management Platform.

 Development of a comprehensive roadmap, detailing the plan for development and roll out of customer functionality.

 A business case, which identifies the value levers and costs associated with the program.

 A recommended operating model, including governance and organizational design for proper management of digital channels.

For the period 2016-2019, the detailed DCX roadmap includes the following:

2016

 Implement a Web Experience Management (WEM) platform, which will enable a best in class web / mobile experience.

 Implement an Identify Access Management (IAM) product, which will enable a more secure, streamlined customer authentication (log in, set password, etc.) process, and single sign-on for all services.

 Re-design and re-platform of all non-authenticated web pages (i.e., public pages that do not require log-in), providing consumers with an updated, engaging experience, with more simple, intuitive navigation, social media integration, and enhanced information on topics such as career opportunities and distributed generation. The re-design will incorporate best practices in web design and usability, and focus on customer research and feedback during the development process.

 Implement customer feedback survey tools integrated with webpages, allowing customers the ability to provide comments and feedback on all pages, and after completing transactions.

2017

 Re-design and re-platform all authenticated web pages which are part of the My Account portal, providing customers streamlined and intuitive self-service options, such as pay bill, start / stop service, and report an outage. The re-design will incorporate best practices in web design and usability, and focus on customer research and feedback during the development process.

 Redesign the mobile web and mobile app experience, to make key information and transactions more simple and intuitive.

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EXHIBIT___(CO-1) PAGE 3 OF 7

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 Implement usage analysis tools, including visualization of energy usage with graphs, neighbor comparisons, overlay of weather and price information on usage graphs, and the ability to receive high bill alerts and customized energy savings tips.

 Implement a Live Chat functionality.

 Implement a “Preference Center,” allowing customers to establish their communications preference related to bill alerts, outage, and energy efficiency communications.

 Redesign web services related to large commercial and industrial and multi-account customers. This includes the ability to manage multiple accounts, download usage information for multiple accounts, manage summary bills, and view and download interval-metered usage.

 Develop analytics capabilities to track customer web and mobile activity, identification of key pain points, and development of enhancements to address these pain points.

2018

 Redesign of web services related to energy efficiency and demand response programs, including program enrollment and administration.

 Implement of content personalization for various customer segments, ensuring the most relevant content is provided to customers based on their status and available program(s).

 Extend mobile app functionality to include advanced services such as use of GPS to report an outage, push notifications for alerts, and use of camera to submit meter readings.

2019 and 2020

 Technology upgrade for WEM platform.

 Expansion of multi-language tools.

 Implementation of “click to call” functionality to allow customers to request a call via web / mobile channels, and receive call back.

 Integration of web channels with Customer Relationship Management system, to facilitate customer transparency to all company programs and interactions.

 Implementation of co-browse functionality to allow a customer contact representative to lead a customer through the www.coned.com website.

 Implementation of virtual assistant for Live Chat services, allowing for effective low cost handling of customer inquiries.

Justification Summary:

The DCX program has a number of key drivers. These drivers include, but are not limited to, the current status of the www.coned.com website, changing customer expectations, and changes in the energy industry.

According to customer research and benchmarking the current www.coned.com website requires improvement in a number of areas. Specifically, customers have noted that the current site could improve

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in the areas of site navigation, overall look and feel, organization of information, and ease of use of key transactions (such as pay bill and start service). The website has expanded gradually over the years, and customers have noted that quickly finding information can be difficult. In addition to customer-facing areas needing improvement, the overall technology environment requires significant upgrades. Specifically, the site is not flexible due to the lack of an enterprise Content Management System, which enables business users to update content without complex programming. In addition, improvements are required in the areas of analytics, the ability to personalize content, and scalability for availability during high traffic. The DCX program will address these issues with a complete redesign of all content and navigation, which will enable customers to efficiently find information. The redesign will also streamline customer transactions such as bill pay and outage reporting, so that they are simple and intuitive transactions. In addition, the underlying technology will be completely replaced and upgraded as part of the DCX program, through the implementation of a leading WEM platform. The WEM platform will include content management, analytics, and personalization capabilities, and will be hosted in the cloud for scalability.

Another driver of the DCX program is changing customer expectations. The Company serves a diverse customer base in one of the largest metropolitan areas in the Nation. Customers vary in age, lifestyle and in adoption and use of digital technologies. Their interactions with companies outside of the energy industry are resetting their base level service expectations and making what was extraordinary, ordinary. Examples of these expectations include customer-focused simplicity, mobile access, personalization and real-time tracking and notifications. The DCX program will enable digital interactions that are comparable to other service providers with experiences that are reliable, fast, and intuitive across a range of devices, web browsers, and mobile operating systems. In addition, customers seek more personalized experiences. A “one size fits all” model is no longer acceptable. Residential, multi-family, small business and commercial and industrial customers have separate motivations and requirements. The DCX program will enable personalized web experiences, which are highly relevant to stakeholders including customers, prospective employees, governmental stakeholders, and third parties.

Finally, the DCX program will support the Company’s efforts to respond to changes in the energy industry. The energy industry is in a state of transformation, impacting consumers, utilities and third parties. New energy choices and technologies are changing the role the Company plays in consumers’ homes and businesses and how they use and manage energy. REV is also focused on promoting more efficient use of energy, increased use of renewables, and wider deployment of distributed energy resources. These changes will allow customers more choice in how they manage and consume energy. The Company’s digital channels will support REV, with the ability to facilitate greater customer engagement and enable adoption of demand-side management, distributed energy resources and advanced technology. Importantly, the digital assets developed under this program will have the capability to interface with a portal for energy products and services, as conceptualized by the Commission in Track 1 of the REV proceeding. This interfacing capability will be tested and refined as part of the Company’s CONnectED Homes demonstration project. The DCX program will also provide the foundation for the Company to implement a Green Button Connect My Data (“GBC”) data exchange tool, as described in the Customer Operations and Electric Infrastructure and Operations Panel testimony. This tool will allow customers to share their usage data with designated third parties, which will enable third parties to develop customized energy products and services.

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Sharing data with customers and third party providers through digital channels will also be essential in serving this new model. As access to and sharing of data becomes necessary to facilitate industry changes, cyber security and customer data privacy is increasingly becoming a key issue. The DCX program will enable improvements in the area of customer engagement (through bill alerts, usage analysis, and savings tips), data sharing, and security (through upgraded technology architecture and a more secure and robust sign-in process). The DCX program will provide important foundational elements that will enable the Company to address industry changes in the short term, and ensure agility to meet future industry and regulatory changes.

In summary, the DCX Program is a strategic initiative for the Company that will help improve the current digital channels, meet the needs of its diverse customers, and address the changes envisioned in the REV proceeding.

Supplemental Information:

 Alternatives: The only alternative would be to continue to make changes to Company websites in a piecemeal fashion, on the existing, aging technology platform. This would not provide an improved customer experience in that the websites would continue to be limited in their functions and performance. Also, the Company would not be positioning itself to meet customer expectations and an evolving regulatory environment.

 Risk of No Action: There are several key risks associated with no action:

1) Diminished smartphone and tablet user experience, due to current technological toolset which does not meet customer expectations around mobile access;

2) Weakened brand image as users become increasingly frustrated;

3) More customers contacting the Company’s Customer Experience Centers rather than using self-service applications;

4) Inefficient use of company resources as new content and applications will need to be developed on the existing platform as required by regulation and business needs;

5) Inability to adapt to evolving customer and regulatory requirements; and

6) Failure to adapt and leverage customer engagement opportunities provided by smart meter technology.

 Non-financial Benefits: The DCX program will result in a number of non-financial benefits, including but not limited to the following:

o Improved customer satisfaction, through a comprehensive, simple and intuitive web experience;

o Improved community standing and relationships, through a more engaging and informative website;

o Improved customer engagement, through proactive communications, additional choice, control and customer tools;

o Improved accessibility for special needs customers, through content which meets regulations for hearing and visually impaired customers;

o Improved agility, with a more robust technology suite, which allows for flexibility and agile development of new content; and

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 Summary of Financial Benefits (if applicable) and Costs: O&M costs and savings from the DCX program are covered in separate O&M white papers

 Technical Evaluation/Analysis: A comprehensive technical evaluation of the DCX program was completed during the Phase 0 analysis, which was completed in 2015. This analysis was utilized as the basis for scope, staffing, and cost estimates for the program. In addition, customer research was conducted to inform the evaluation. The research performed confirmed customer expectations regarding robust digital channels, and a simple engaging experience.



Project Relationships (if applicable): The DCX program is related to the AMI initiative, as the DCX program customer portal will include an AMI meter data portal, where customers can view their smart meter data. The DCX Program is also related the Company’s proposal to implement a GBC data exchange tool. In addition, the DCX program supports REV goals and demonstration projects.



Basis for Estimate: The basis for the estimates are the overall DCX Phase 0 Roadmap and Business Case, which included a detailed resource and work plan itemizing costs for the program.

Total Funding Level ($000):

Historical Spend

Actual 2011 Actual 2012 Actual 2013 Actual 2014 Historic Year

(O&M only)

Forecast 2015

$5,000

Historical Elements of Expense

(Historical EOE breakout will only be completed for Steam projects/programs of $500 thousand or more and, for all other organizations, projects/programs of $1million or more.)

EOE Actual 2011 Actual 2012 Actual 2013 Actual 2014 Historic Year (O&M only) Forecast 2015 Labor $500 M&S A/P $4,058 Other $442 AFUDC Total $5,000

Request ($000):

Request 2016 Request 2017 Request 2018 Request 2019 Request 2020 $20,000 $12,000 $5,000 $5,000 $5,000

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Request by Elements of Expense

EOE 2016 2017 2018 2019 2020 Labor $4,284 $2,656 $715 $550 $550 M&S A/P $12,852 $7,729 $3,885 $4,194 $4,219 Other AFUDC Overheads $2,864 $1,614 $400 $256 $231 Total $20,000 $12,000 $5,000 $5,000 $5,000

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Capital

X O&M

Customer Operations

Project/Program Title Digital Customer Experience O&M Costs

Hyperion Project Number N/A

Work Description:

The Digital Customer Experience (DCX) program will deliver an improved online experience for customers through a redesign that covers the www.coned.com external website, the mobile website, the “My Account” portal and the mobile application (app). The Company seeks to provide a best in class customer experience by providing customers with better and more coordinated information across multiple channels. This will be achieved through a transformation of current digital offerings, new technology, improved analytics, and a new digital operating model. The DCX program will also enable efforts such as the Public Service Commission’s Reforming the Energy Vision (REV) proceeding and the Company’s Automated Meter Infrastructure (AMI) project, contributing to customer engagement opportunities. The program includes the purchase and implementation of new technology supporting enhanced digital interactions, development of a new web and mobile customer experience, and implementation of tools to support multi-channel communication such as chat, text and email.

 Offer customer preference options to communicate on the customer’s terms via their preferred channel.

 Enable migration of customers to lower cost channels while maintaining operational excellence through the development and optimization and development of self-service functionality across all platforms (pay bill, start/stop service, enter meter readings, etc.).

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EXHIBIT___ (CO-2) PAGE 2 OF 5

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To provide a best in class digital customer experience, the DCX program requires O&M funding for both labor and non-labor expenses.

Once the Company’s new digital assets are operational, labor expenses will fund additional human resources that will be needed to provide day-to-day maintenance and management of the new digital architecture, manage the customer experience, and create and introduce new creative content. These human resources will be located in the three organizations that provide oversight and management of the DCX program, specifically Information Technology, Customer Operations, and Public Affairs. The additional human resources will fulfill the following roles (note, roles do not correlate with a full time employee equivalent (FTE)):

Information Resources

 Digital Technology Lead

 Digital Technology Architect

 Front End Digital Developer

 App Development

 Tester

Customer Operations

 Digital Services Business Lead

 Digital Project Management Lead

 Digital Business Analyst

 Customer Journey Manager

 Interaction Designer

 Data Analyst (web analytics)

Public Affairs

 Creative Designer

 Content Strategist

 Content Author

 Digital Marketer

The total number of FTE resources performing the roles noted above is shown in the table below. These resource requirements are expected to ramp up incrementally as implementation of the DCX project program progresses, resulting in a total of seven FTEs by the end of Rate Year 2.

DCX FTE Requirements Organization 2016 2017 2018 2019 2020 Information Technology 1.0 1.0 2.0 2.0 2.0 Customer Operations 0.5 1.0 2.0 2.0 2.0 Public Affairs 1.0 3.0 3.0 3.0 3.0 Total 2.5 5.0 7.0 7.0 7.0

Non-labor expenses for this program include software-related fees charged by vendors of the technology solutions being deployed in the DCX program. DCX technologies and their associated fee requirements are as follows:

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 Software as a Service fees: Customer Engagement Platform, Identity Access Management, Feedback/Survey Tools for Web and Mobile

 Cloud Hosting fees: Web Experience Management Platform

 Maintenance fees: Web Experience Management Platform, Preference Management Platform, My ConEdison App

The DCX capital white paper contains more information about the functions of the above technologies and their roles in the DCX program.

Justification Summary:

The DCX program is an important strategic program, with a number of key drivers. These drivers include, but are not limited to, the current status of the www.coned.com website, changing customer expectations, and changes in the energy industry – particularly the REV proceeding and the Company’s AMI initiative.

The DCX program will:

 Deliver enhanced digital channels capable of facilitating greater customer engagement and adoption of demand-side management, distributed energy resources and advanced technology.

 Enable improvements in the area of customer engagement, data sharing, and security.

 Implement important foundational elements that will provide the capabilities to address industry changes in the short term, and ensure agility to meet future industry and regulatory changes. To deliver an improved digital customer experience, the Company must increase its O&M spending. Additional staff with skills in the area of digital technologies is required to support the goals and objectives of the DCX program. The program requires incremental human resources to manage and support the new customer experiences and digital architecture. These additional resources will allow content to be continually refreshed so that it is relevant and timely. They will also review web analytics to determine what customers are doing on web and mobile apps, and optimize tools and functionality to deliver an improved customer experience. In addition, the robust technical architecture that is being implemented to support the DCX program requires dedicated support from IT professionals with demonstrable skills in the chosen products and technologies.

O&M funding is also needed for a number of technology-related fees. These non-labor expenses will support ongoing use of the technologies that will serve as the foundation of the Company’s enhanced digital channels. These technologies are necessary to ensure customers can easily contact the company through digital channels, gain insights about usage from visualization of energy information, and take control of preferences for call, text, and email communications.

Supplemental Information:

 Alternatives: The alternative to adding incremental personnel would be to operate at the current level of staffing, which is not sufficient to provide customers with an experience they expect in an increasingly digital world. In addition, the robust technical architecture that is being implemented to support the DCX program requires dedicated support from IT professionals with demonstrable skills in the chosen products and technologies. Without this additional staff, the technology solutions being deployed in the DCX program could fail to properly support a best in class experience for customers.

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The alternative to paying software fees for the DCX technology solutions would be to eliminate these important services from the overall DCX program plans.

 Risk of No Action:

With respect to O&M spending, the key risks associated with no action are:

o Without additional staff, content would become outdated and open items causing frustration for customers would take longer to be identified and addressed.

o Not paying software fees for DCX technology solutions would eliminate these solutions from the overall DCX program plans. This would eliminate the customer value associated with technologies such as live chat, feedback services, usage visualization, bill alerts, and communication preference management.

 Non-financial Benefits:

The DCX program will result in a number of non-financial benefits, including but not limited to the following:

o Improved customer satisfaction, through a comprehensive, simple and intuitive web experience.

o Improved community standing and relationships, through a more engaging and informative website.

o Improved customer engagement, through proactive communications, additional choice, control, and customer tools.

o Improved accessibility for special needs customers, through content which meets regulations for hearing and visually impaired customers.

o Improved agility, with a more robust technology suite, which allows for flexibility and agile development of new content.

o Improved resiliency related to storm, public safety, and other vital communications.

 Summary of Financial Benefits (if applicable) and Costs: Cost savings associated with the DCX program are described in a separate O&M white paper.

 Technical Evaluation/Analysis: A comprehensive technical evaluation of the DCX Program was completed during the Phase Zero analysis, which was completed in 2015. This evaluation was utilized as the basis for scope, staffing, and cost estimates for the DCX program. In addition, customer research was conducted to inform the evaluation. The research performed confirmed customer expectations regarding robust digital channels, and a simple, engaging experience.

 Project Relationships (if applicable): The DCX Program is related to the AMI project, as the DCX program customer portal will include an AMI meter data portal, where customers can view their smart meter data. In addition, the DCX program supports REV goals and demonstration projects that are in the planning phase. It also provides a platform for the Company to implement a Green Button Connect My Data exchange tool, which will allow customers to share their data with authorized third parties.

 Basis for Estimate: The basis for the estimates are the overall DCX Phase Zero Roadmap and Business Case, which included a review of ongoing software and labor costs for the project.

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Total Funding Level ($000): Historical Spend

Actual 2011 Actual 2012 Actual

2013 Actual 2014 Historic Year (O&M only) Forecast 2015

(Historical EOE breakout will only be completed for Steam projects/programs of $500 thousand or more

and, for all other organizations, projects/programs of $1million or more.)

EOE Actual 2011 Actual 2012 Actual

2013 Actual 2014 Historic Year (O&M only) Forecast 2015 Labor M&S A/P Other Total Request ($000): Request 2016 Request 2017 Request 2018 Request 2019 Request 2020 $510 $3,243 $3,754 $4,612 $4,612

EOE 2016 2017 2018 2019 2020 Labor – Cust. Ops. $58 $116 $232 $232 $232 Labor – Public Affairs / Corporate Communications $116 $348 $348 $348 $348 Labor – Information Resources $116 $116 $232 $232 $232 M&S A/P $220 $2,663 $2,942 $3,800 $3,800 Other Overheads Total $510 $3,243 $3,754 $4,612 $4,612

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Capital

X O&M

Customer Operations

Project/Program Title Digital Customer Experience O&M Savings

Work Description:

The Digital Customer Experience (DCX) program will deliver an improved online experience for customers, through a redesign that covers the www.coned.com external website, the mobile website, the “My Account” portal and the mobile application (app). The Company seeks to provide a best in class customer experience, by providing customers with better and more coordinated information across multiple channels. This will be achieved through a transformation of current digital offerings, new technology, improved analytics, and a new digital operating model. The DCX program will also enable efforts such as the Public Service Commission’s Reforming the Energy Vision (REV) proceeding and the Company’s Automated Meter Infrastructure (AMI) initiative, contributing to customer engagement opportunities. The program includes the purchase and implementation of new technology supporting enhanced digital interactions, development of a new web and mobile customer experience, and implementation of tools to support multi-channel communication such as chat, text and email.

 Offer customer preference options to communicate on the customer’s terms via the preferred channel.

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 Enable migration of customers to lower cost channels while maintaining operational excellence through the development and optimization and development of self-service functionality across all platforms (pay bill, start/stop service, enter meter readings, etc.).

In addition to non-financial benefit of customer engagement, enhanced community standing, risk mitigation and resiliency, described in the DCX capital and O&M white papers, there are financial benefits associated with DCX in form of call reduction.

By enhancing the overall digital customer experience, the Company has projected that a portion of customers, who currently contact the Customer Experience Centers for needs such as starting service, stopping service, moving, obtaining a payment arrangement, and discussing a high bill, will adopt the use of self-service channels on web and mobile. As a result, an 8.5% reduction in calls is projected to be realized over time between 2018 and 2020, which will result in an overall reduction in Customer Service Representatives (CSRs) needed to handle these calls. This estimated reduction in calls was the result of a detailed analysis of call types, their likelihood to be moved to self-service on the web, and benchmarks of call reductions in similar projects at other utilities. The following table shows the reduction in CSR positions as a result of DCX, by year.

2016 2017 2018 2019 2020

CSR Position

Reduction 0 0 15 21 20

Justification Summary:

The DCX program is an important strategic project, with a number of key drivers. These drivers include, but are not limited to, the current status of the www.coned.com website, changing customer expectations, and changes in the energy industry – particularly the REV proceeding and the Company’s AMI initiative. One of the benefits of the DCX program is that it will increase customer adoption of self-service channels on the web and mobile. The Company estimates that this will result in an 8.5% reduction in calls fielded by CSRs at the Customer Experience Centers between 2018 and 2020. This projected reduction in calls would reduce the number of CSRs needed to staff the Customer Experience Centers, and lead to O&M savings.

Supplemental Information:

 Alternatives: The only alternative to the DCX program would be to continue to make changes to Company websites in a piecemeal fashion, on the existing, aging technology platform. This would not provide an improved customer experience in that the websites would continue to be limited in their functions and performance. Customer adoption of self-service on the web and mobile would not increase as projected under the DCX program, so the Company would forego the O&M savings described above.

 Risk of No Action: With respect to O&M savings, the key risk associated with no action is that more customers would contact the Customer Experience Centers, rather than using self-service applications.

 Non-financial Benefits: The DCX program will result in a number of non-financial benefits, described in the O&M and Capital White Papers for this program.

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 Summary of Financial Benefits (if applicable) and Costs: O&M savings resulting from the DCX project are outlined in the “Request” tables below.

 Technical Evaluation/Analysis: A comprehensive technical evaluation of the DCX Program was completed during the Phase 0 analysis, which was completed in 2015. This evaluation was utilized as the basis for scope, staffing, and cost / savings estimates for the program. In addition, customer research was conducted to inform the evaluation. The research performed confirmed customer expectations regarding robust digital channels, and a simple engaging experience.



Project Relationships (if applicable): The DCX Program is related to the AMI initiative, as the DCX program customer portal will include an AMI meter data portal, where customers can view their smart meter data. It is important to note that the CSR staffing reductions resulting from the DCX program are independent of the O&M cost savings described in the AMI Panel testimony.

 Basis for Estimate: The basis for the estimates are the overall DCX Phase Zero Roadmap and Business Case, which included a detailed resource and work plan itemizing costs and savings for the project.

Total Funding Level ($000):

(O&M only)

Forecast 2015

EOE Actual 2011 Actual 2012 Actual 2013 Actual 2014 Historic Year (O&M only) Forecast 2015 Labor M&S A/P Other Total

Request ($000):

Request 2016 Request 2017 Request 2018 Request 2019 Request 2020 ($875) ($2,100) ($3,250)

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EOE 2016 2017 2018 2019 2020 Labor – CSR Reduction $0 $0 ($875) ($2,100) ($3,250) M&S A/P Other – Postal Costs Overheads Total $0 $0 ($875) ($2,100) ($3,250)

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EXHIBIT___(CO-4) PAGE 1 OF 1 Digital Customer Experience Worksheet

($000s) Capital Request 2016 Request 2017 Request 2018 Request 2019 Request 2020 Change Management and

Governance $1,750 $1,750 $400 $400 $400

Web Platform Integration $3,500 $1,750 $750 $1,000 $1,000

Content Strategy & Voice of the

Customer (VOC) $4,500 $2,550 $1,700 $1,700 $1,700

Web Experience Management

System $6,500 $3,000 $1,250 $1,250 $1,250

Identity Access Management $650 $650 $250 $0 $0

Customer Engagement Tools $650 $500 $150 $150 $150

Preference Management & New

Communications $1,500 $900 $175 $175 $175

Customer Analytics & Insights $300 $600 $175 $175 $175

Mobile Application Development $650 $300 $150 $150 $150

Total $20,000 $12,000 $5,000 $5,000 $5,000

O&M Costs O&M Change 2017 (RY1)

O&M Change 2018 (RY2)

Labor – Customer Operations. $116 $116 $0

Labor – Public Affairs / Corporate

Communications $348 $0 $0

Labor – Information Resources $116 $116 $0

Software as a Service Fees $2,363 $129 $708

Cloud Hosting and Maintenance Fees $150

Maintenance Fees $150 $150 $150

Total $3,243 $511 $858

O&M Savings O&M Change

2017 (RY1) O&M Change 2018 (RY2) O&M Change 2019 (RY3) Labor Savings ($875) ($1,225) Total ($875) ($1,225)

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X Capital

O&M

Customer Operations

Project/Program Title Customer Interaction Center

Project Manager Sebastian Cacciatore

Hyperion Project Number PR.21574219

Status of Project Planning

Estimated Completion Date July 2017

Work Description:

In 2015 the Company upgraded to a state of the art telephony platform, referred to as the Customer Interaction Center (CIC). The CIC services both the operational needs of the Company’s Customer Experience Centers, including customers and administrative groups. The new platform provides a foundation that can be used as a single routing engine to handle multiple communication streams simultaneously – e.g., live agent phone calls, interactive voice response (IVR) transactions, and e-mail communications. It allows intelligent integration with the Customer Information System (CIS), providing customers with a customized interaction experience. And by consolidating multiple communication channels, the CIC also streamlines work processes, which improves operational efficiency and delivers a more seamless experience for customers.

Building on the CIC foundation, the Customer Interaction Center program will implement a number of technologies to automate the management of administrative work, and improve quality assurance for customer calls. In 2016 – i.e., outside of the revenue requirement in 2016 rate filing – technology will be added to provide foreign language functionality for self-service Customer Experience Center applications in Mandarin, Cantonese, Korean, and Russian languages. Updated branch office queuing software will be implemented at Walk-in Centers to improve how customers are received, queued and routed when they visit us in person. In addition, this program will add customer survey technology to obtain valuable customer feedback from customers after recent interactions with the Company. In 2017 (Rate Year 1), speech analytics software will allow personnel to monitor in real time what customers and Customer Service Representatives (CSRs) are saying – in English or one of the aforementioned foreign languages – and use the information for faster and more effective routing of calls.

Program work scope includes purchasing automation, speech analytics, speech recognition, survey, and queuing software and all related vendor professional services. Implementation will begin in January 2016.

Justification Summary:

The Customer Assistance department within Customer Operations manually processes approximately 750,000 work items each year, including accounting referrals and customer inquiries and requests. These items are received from various sources including phone calls, faxes, US Postal Service, and e-mail. This manually-processed work is currently segregated and tracked based on the source of customer

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communication. Additionally, the Company is seeing an increase in the number of requests that must be tracked through multiple steps and/or interactions with multiple departments before resolution. The CIC program will leverage the functionality imbedded in the CIC to consolidate multiple communications streams and automate the process of routing and tracking work requests stemming from customer communications, making our administrative processes more efficient and assisting in providing timely responses to all customer communications. The technologies implemented in this program will also equip management personnel with tracking and reporting tools that provide real-time visibility into how tasks are handled from start to finish. Productivity and efficiency benefits from the CIC program are expected to help Customer Operations avoid hiring incremental human resources to manage the workload on a timely basis.

Also, our manual administrative functions have a high dependency on printed documents and materials that may contain sensitive information about customers. The automation proposed in this program will provide for an automated, electronic flow of all documents related to the customer request and better control and protection of personally identifiable information (PII).

Implementation of updated technologies is also needed to improve the customer experience at the Customer Experience Center and Walk-in Centers. In the area of customer calls, this program will leverage the Company’s existing quality assurance call recording system and implement new speech analytics and speech recognition software. Speech analytics will allow the Customer Experience Center to monitor in real time what customers and CSRs are saying, which will contribute to calls being routed faster and more effectively. This is expected to improve the Company’s first call resolution rates and also provide for the coaching of employees. Additionally, foreign language functionality will be implemented on the Customer Experience Center IVR, which will improve the likelihood that customers’ issues will be resolved on the first call, and allow more of our customers to utilize low-cost self-service options. At the Walk-in Centers, updates to the branch office queuing software is needed to improve how customers are received, queued and routed when they visit us in person. The current systems have reached their end of life and will no longer be supported by the vendor.

The Company also seeks to gain customer insights on their service experience and more information on their needs and preferences with respect to the services we provide. Implementation of customer survey technology for voice interactions will assist the Company in obtaining valuable customer feedback in near real-time.

Supplemental Information:

 Alternatives:

o The Company can continue the manual handling of Customer Experience Center and administrative work. However, Customer Operations would need to add human resources to manage the growing volume of manually processed work. The Company would also fail to fully utilize the functionalities embedded in its new CIC system if it continued to rely on manual processes.

o The Company can continue to utilize less sophisticated methods of monitoring customer call handling, but doing so would mean potentially missing opportunities to route callers to the appropriate queues in real time and improve first call resolution, thereby improving the overall customer experience.

o There are no alternatives for providing foreign language functionality for self-service applications or the updating of Walk-in Center queuing functionality. The current systems have reached end of life and will no longer be supported by the vendor.

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3

o There is no viable alternative for customer survey technology that enables immediate customer feedback.

 Risk of No Action:

o Continued manual handling of Customer Experience Center and administrative work will make it challenging to complete work on a timely basis and manage customer PII.

o The lack of speech analytics and speech recognition technology will handicap the Company’s ability to enhance the customer experience and improve first call resolution.

o Without a required upgrade, at some point the queuing functionality at the Walk-in Center will become inoperable and queuing would have to be done manually. This would increase Walk-in Center human resource costs and potentially diminish the customer experience.  Non-financial Benefits:

o Quality assurance activities will provide for improvements in first-call resolution and an enhanced customer experience.

o The implementation of foreign language functionality for self-service will enhance the service we provide to non-English speaking customers.

o The implementation of customer survey technology will assist the Company in obtaining valuable customer feedback immediately after a customer’s interaction with the Company.  Summary of Financial Benefits (if applicable) and Costs:

o With continued increases in work volume, it is becoming increasing difficult to manage Customer Experience Center and administrative workload without additional human resources. Automation of this work can help to avoid the need to hire additional resources to handle this workload on a timely basis.

 Technical Evaluation/Analysis: Phase 1 of the CIC project involved installation of the new telephony system, integration with other Company systems, and testing before full deployment at the Customer Experience Center (completed in 2015). The technologies described in this white paper are being implemented after 2015 because they leverage the advanced functionalities of the CIC.



Project Relationships (if applicable): N/A



Basis for Estimate:

o

Vendor pricing for software and professional services.

Total Funding Level ($000):

(O&M only)

Forecast 2015

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4

(Historical EOE breakout will only be completed for Steam projects/programs of $500 thousand or more and, for all

other organizations, projects/programs of $1million or more.)

Request ($000):

Request 2016 Request 2017 Request 2018 Request 2019 Request 2020 $2,000 $565

EOE 2016 2017 2018 2019 2020 Labor $420 M&S A/P $1,277 $558 Other Overheads $303 $7 Total $2,000 $565

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1

Capital

X O&M

Customer Operations

Project/Program Title

Customer Interaction Center O&M

Project Manager

Sebastian Cacciatore

Hyperion Project Number

N/A

Status of Project

Ongoing

Estimated Start Date

2015

Estimated Completion Date

Ongoing

Work Plan Category

Operationally Required

Work Description:

In 2015 the Company upgraded to a state of the art telephony platform, referred to as the

Customer Interaction Center (CIC). The CIC serves the operational needs of the Company’s

Customer Experience Centers (formerly known as the “Call Centers”), including customer

interactions, transactions and back-office administrative functions. The CIC platform utilizes

software provided by the product vendor. As such, ongoing software maintenance work,

including vendor professional services, is required to receive and install software updates and

security patches, and maintain reliable operations of the CIC. This O&M cost will provide a

full-time contractor, software updates, and support services.

CIC maintenance work is divided up into multiple contracts that are coming into effect on a

rolling basis over the 2015-2016 period, in accordance with the CIC implementation plan. By

2017 all contracts will be in effect. Additional licenses and services were added to the system

during each year of the system roll-out, leading to O&M increases year over year.

Justification Summary:

The CIC processes more than 16 million customer calls annually, making it the Customer

Experience Center’s most critical infrastructure asset. All customer contacts made to the

Customer Experience Center via telephone are either processed by the CIC’s interactive voice

response (IVR) system or get distributed to Customer Service Representatives (CSRs) via the

CIC’s automated call distribution system. The IVR system also processes millions of customer

transactions annually, including bill payments, payment agreements, emergency reporting and

transfer of service between locations. Additionally, the CIC has messaging capabilities that

provide customers with important announcements as they are waiting on the line, including

messages related to system emergencies.

Reliable operation of the CIC platform is vital for the Company to maintain service quality and

efficiently complete administrative work. The software maintenance described above will keep

the CIC platform up-to-date with software improvements and provide for continued vendor

support.

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2

Supplemental Information:

 Alternatives: Fall out of compliance with vendor software maintenance requirements,

which could potentially lead to possible system failures with the inability to rely on

vendor support to identify and fix the problem.

 Risk of No Action: Loss of vendor support leading to significant operational risk.

 Non-financial Benefits: Reliable operational performance of the CIC, which translates to

reliable customer service, transaction processing, emergency reporting, and routing of

administrative work.

 Summary of Financial Benefits (if applicable) and Costs: N/A

 Technical Evaluation/Analysis: N/A

 Project Relationships (if applicable): N/A

 Basis for Estimate: Actual vendor proposals.

Total Funding Level ($000):

(O&M only)

Forecast 2015

$167

(Historical EOE breakout will only be completed for Steam projects/programs of $500 thousand or more and, for all

other organizations, projects/programs of $1million or more.)

EOE Actual 2011 Actual 2012 Actual 2013 Actual 2014 Historic Year (O&M only) Forecast 2015 Labor M&S A/P $167 Other Total $167

Request ($000):

Request 2016 Request 2017 Request 2018 Request 2019 Request 2020 $516 $970 $970 $970 $970

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3

EOE 2016 2017 2018 2019 2020 Labor M&S A/P $516 $970 $970 $970 $970 Other Overheads Total $516 $970 $970 $970 $970

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1

EXHIBIT___ (CO-7) PAGE 1 OF 1 Customer Interaction Center Worksheet

($000s)

Capital Request 2016 Request 2017 Request 2018 Request 2019 Request 2020 Process Automation $850 $0 $0 $0 $0 Foreign Language Self-Service Applications $1,000 $0 $0 $0 $0 Queuing Software Replacement $120 $0 $0 $0 $0 Speech Analytics and Recognition $0 $565 $0 $0 $0 Survey Technology $30 $0 $0 $0 $0 Total $2,000 $565 $0 $0 $0

O&M O&M Change 2017 (RY1) O&M Change 2018 (RY2) O&M Change 2019 (RY3) Customer Interaction Center $803 $0 $0 Total $803 $0 $0

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1

Capital

X O&M

Customer Operations

Project/Program Title Credit and Debit Card Fees

Project Manager Robert Buck

Status of Project Implementation will begin upon PSC approval

Estimated Start Date 1/1/2017

Estimated Completion Date Ongoing

Work Description:

The Company proposes to include in base rates the cost currently paid by customers when

making a credit or debit card (CC/DC) payment.

Currently, residential and small commercial customers are charged $3.35 per transaction by a

third party vendor to pay their bill via CC/DC. Larger customers pay a fee to the vendor equal to

2.6% of the payment amount. The Company proposes to eliminate this per-transaction cost to

customers, and the Company will become responsible for the aggregate costs of residential

CC/DC payments. This is referred to as a ‘no-fee model.’ Forecasted costs under the no-fee

model will be recovered in base rates.

The Company has an exclusive contract with a CC/DC payment processing vendor that covers

the proposed no-fee model, as well as the current model of per-transaction fees charged to the

customer. If the Commission approves this program in 2016, the per-transaction fee would be

eliminated in the first quarter of 2017. Additionally, once the Company transitions to the no-fee

model, customers will be able to schedule recurring payments using the CC/DC payment option.

Previously, recurring CC/DC payments were not possible because the customer has to accept the

convenience fee at the time of the transaction.

To implement this proposal, the Company will work with its CC/DC payment vendor to

transition to the no-fee model. Based on the vendor’s contract with the Company, the

per-transaction cost of CC/DC payments by residential and small commercial customers will be

reduced as the vendor offers a lower utility rate transaction fee, and is offering a modest

volume-based discount. Fee reductions for residential and small commercial payments are as follows:

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2

No. of CC/DC Transactions

No-fee Cost Current Fee Fee Reduction 2017 1,396,477 $2.86 $3.35 $0.49 2018 1,605,358 $2.74 $3.35 $0.61 2019 1,884,186 $2.65 $3.35 $0.70 2020 2,254,613 $2.58 $3.35 $0.77

The per-transaction cost for larger customers will remain at 2.6% of the payment amount.

The Company assumed a 25% annual increase in CC/DC payments as a result of moving to the

no-fee model. Residential and small commercial customers account for 95% of the transactions

in the current model and are expected to account for the same or higher percentage when the

Company transitions to a no-fee model.

In addition to including the forecasted cost of CC/DC payment fees in base rates, the Company

plans to reconcile actual costs with the cost included in base rates on an annual basis and defer

any over or under-collections for recovery in its next rate filing. This reconciliation is discussed

in the Accounting Panel testimony.

Justification Summary:

Credit and debit cards have become one of the most common payment methods in the United

States for a variety of reasons, including their convenience to consumers. According to the 2013

Federal Reserve Payments study, card payments accounted for 67% of the total number of

non-cash payments in 2012, up from 43% in 2003. From 2003 to 2012, the number of nonnon-cash

payments made using prepaid, debit and credit cards grew at a compound annual growth rate of

30.7%, 13.0%, and 3.7%, respectively.

1

The following graph demonstrates this trend.

2

1

https://www.frbservices.org/files/communications/pdf/general/2013_fed_res_paymt_study_summary_rpt.pdf (Section 2 Summary of Findings, pg. 12)

2

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3

Customers expect the Company to provide billing and payment options on par with the options

available in their other day-to-day transactions, such as paying a wireless bill or medical bill.

According to a Utility Industry Benchmark survey conducted by Chartwell in 2015, billing was

the most important driver when it came to impacting the customer experience. Offering a no-fee

CC/DC will give customers payment choices that they prefer, which will enhance the customer

experience and increase satisfaction.

The Company has seen a substantial increase in the number of customers paying via CC/DC in

the past five years, despite the transaction fee. As shown in the table below, the monthly average

payments via CC/DC saw a steep increase from 2014 to 2015. This was a result of the

Company’s decision to 1) accept Visa cards as payment, and 2) lower the transaction fee from

$4.25 to $3.35 beginning November 1, 2014. The fee was reduced because the Company began

using a new CC/DC payment vendor that could offer lower rates. The Company anticipates the

number of CC/DC payments to increase again when it moves to the no-fee model.

Average Monthly Credit and Debit Card Usage

Year

Payments

Revenue Collected

2015

120,522

$28,858,747.71

2014

69,494

$19,379,958.52

2013

59,103

$16,142,079.50

2012

52,244

$12,734,521.91

2011

51,303

$12,440,645.69

The Company views fees for CC/DC payments as a general cost of doing business. Increased

payment by CC/DC has operational benefits, including a reduction in returned payments and

faster same-day payments. In some cases, customers contact the Company’s Customer

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Experience Centers to confirm that a payment has been credited to their account. This additional

call will be unnecessary if customers set up recurring CC/DC payments. Additionally, a 2014

study by Fiserv, a CC/DC payment processing vendor, showed that across 105 utilities,

transitioning to a no-fee model led to increased use of lower-cost self-service payment options,

specifically more web payments and recurring payments.

Finally, the Company believes transitioning to a no-fee model will enhance the customer

experience for our customers that receive public assistance benefits via pre-paid debit cards.

Under the current model, such customers can pay their utility bill with their pre-paid debit card,

but must use a portion of the benefits to cover the vendor fee for CC/DC payments. Adopting a

no-fee model will eliminate this unintended consequence.

Supplemental Information:

 Alternatives: Continue to offer CC/DC payments for a fee paid to a third-party vendor.

 Risk of No Action: Continued customer dissatisfaction with the cost of CC/DC payments and missed opportunities to engage additional customers in self-service and recurring payment options. Also, continuing to charge public assistance customers a transaction fee that erodes the benefits they may receive on pre-paid debit cards is a costly option for these customers.

 Non-financial Benefits: Increased customer satisfaction, opportunity to enroll additional customers in self-service and recurring payment options.

 Summary of Financial Benefits (if applicable) and Costs: N/A

 Technical Evaluation/Analysis: N/A



Project Relationships (if applicable): N/A



Basis for Estimate: CC/DC transaction growth forecast (i.e., 25% growth per year) derived from vendor-provided data from other industries that went to a no-fee model. Costs taken from vendor quote.

Total Funding Level ($000):

(O&M only)

Forecast 2015

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5

Request ($000):

Request 2016 Request 2017 Request 2018 Request 2019 Request 2020 $4,306 $4,737 $5,363 $6,245

EOE 2016 2017 2018 2019 2020 Labor M&S A/P $4,306 $4,737 $5,363 $6,245 Other Overheads Total $4,306 $4,737 $5,363 $6,245

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CECONY Credit and Debit Card Payments

EXHIBIT___ (CO-9 ) PAGE 1 OF 1

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2013 Federal Reserve Payments Study

Source: The 2013 Federal Reserve Payments Study: Recent and Long-Term Trends in the United States 2000-2012, Detailed Report and Updated Data Release, July 2014.

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Credit and Debit Card Fees Worksheet ($000s)

O&M O&M Change

2017 (RY1)

O&M Change 2019 (RY3) Credit and Debit Card

Processing Fees 4,306 431 626

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EXHIBIT___(CO-12)

PAGE 1 OF 22

Law Department Consolidated Edison Company Kerri Kirschbaum of New York, Inc.

4 Irving Place New York, NY 10003-0987 (212) 460-1077 (212) 677-5850 Fax [email protected] December 31, 2015 By Email for Electronic Filing

Honorable Kathleen H. Burgess Secretary

State of New York Public Service Commission Three Empire State Plaza Albany, NY 12223-1350

RE: Case 13-E-0030 et. al., Mandatory Hourly Pricing Report

Dear Secretary Burgess:

In accordance with the New York State Public Service Commission’s February 21, 2014 Order

Approving Electric, Gas and Steam Rate Plans In Accord with Joint Proposal in Case No. 13-E-0030

et. al., Consolidated Edison Company of New York, Inc. hereby submits its Mandatory Hourly Pricing Report.

Please contact me if you have any questions about this report.

Very truly yours,

/s/

Kerri Kirschbaum Senior Attorney

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EXHIBIT___(CO-12)

PAGE 2 OF 22

Consolidated Edison Company of New York, Inc.

Report on Mandatory Hourly Pricing

Case 13-E-0030

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