EXHIBIT (CSP-REB-1) TO THE REBUTTAL TESTIMONY OF CUSTOMER SERVICES PANEL

(1)

EXHIBIT__(CSP-REB-1)

TO THE

REBUTTAL TESTIMONY

OF

(2)

Improving Communication & Mitigating Media Impacts

500 550 600 650 700 750 -20% 0% 20% 40% 60% O ve ra ll Cu st om er S at is fa ct ion In de x

Recall Utility Communication (minus) Recall Media Story

LIPA/PSEGLI 2014 W3

PSEGLI 2015 W3

LIPA/PSEG Long Island PSEGLI 2014 _W4

LIPA 2013

JDP Residential Electric Survey

= Top Quartile

PSEGLI 2015 W2

PSEGLI 2015 W1

PSEGLI needs more investment in communications to increase “recall utility communications”. This will help move PSEGLI from the lower left hand quadrant to the upper right hand quadrant

Source: J.D. Power MC-1

CURRENT STATE

(3)

JD Power Residential 2015 Wave 1-3

Media news stories gave positive/negative impression of utility

Nearly ¾ of respondents

who recall Media Stories

perceive these stories as

very negative, negative or

neutral, resulting in

significant decline in

overall satisfaction.

Positive Media Stories

result in higher customer

satisfaction score

(+165 pt difference).

+165 points

(4)

JD Power Residential 2015 Wave 1-3

Had Customer Service Interaction (past 3 months)

Slightly under ¼ of

respondents have had

contact with customer

service, either phone or

online, within the last 3

months of the survey.

Those with customer

service interactions have

higher overall satisfaction

(+57 points).

+57 points

(5)

PSEG Long Island – Direct Contact Transactional Surveys

Survey Baseline 2015 April YTD % Improvement 5 yr. Target Status

Residential – After Call 63.7% 90.6% 42% 83.3% Exceeded

Business – After Call 43.7% 86.7% 98% 83.3% Exceeded

Energy Efficiency – After Call 59.1% 92.4% 56% 85.0% Exceeded

Major Account Executive 89.4% 91.9% 3% 92.0% On Target

Electric Field Representative 94.6% 93.5% -1% 95.0% On Target

Walk in Center 84.3% 89.4% 6% 90.0% On Target

Baseline of customers who rated their contact experience with PSEGLI as

satisfying or very satisfying has significantly improved with several exceeding

their 5 year targets

(6)

Overall Satisfaction Climbs as Program Participation Increases

Note: Out of 25 potential offerings

613 674 700 716 752 781 850 450 500 550 600 650 700 750 800 850 900 Not aware of

any offerings offerings butAware of not participating 1 2 3 4 5 or more O ve ra ll Cus to m er S at is fa ct io n I nde x

Number of Offerings Currently Using

34% 56% 13% 4% 2% 1% 1%

As customers participate in more utility programs,

their satisfaction grows exponentially (up to 257 pts)

MC-5 Source: J.D. Power

(7)

Long Island Is Aging

Since 1960, the percentage of adults age 50 and older has grown by 70%

MC-6 Source: Long Island Index

(8)

JD Power - 2015 W1-3: Demographics - D3 Age

PSEG Long Island and PPL, PSE&G, BGE (combined results)

PSEGLI respondents tend to be older than leading East large

utility customers. Nearly half of PSEGLI

respondents are 55 and older and less satisfied with their

experience. Developing targeted

communication for these age groups through appropriate communication channels (email, direct mail) is essential to engage these customer segments.

13%

Under 35 _{Over 54}

49%

Under 35

20%

Over 54

41%

(9)

LIPA / PSEG Long Island OSA Contract Targets

J.D. Power Electric Utility Study

Communicating with all PSEG Long Island customers will be

critical to informing them about new and improved services,

and driving increases in customer satisfaction

MC-8 Source: PSEG/LIPA OSA metric

(10)

LIPA / PSEG Long Island OSA Contract Targets

Customer Electronic Self-Service

In order to engage non-participants in customer electronic self serve options, a diverse multichannel marketing campaign will be required.

“Low hanging fruit” has already been gathered from aggressive email campaigns in 2014/15 leading to diminishing

returns for this channel

MC-9 Source: PSEGLI/LIPA OSA metric

(11)

LIPA / PSEG Long Island OSA Contract Targets

Paperless Billing

Paperless billing , one of the LIPA OSA component metrics , has an aggressive 5 year target.

Communications to increase customer awareness, participation and satisfaction is part of the PSEGLI communications strategy

MC-10 Source: PSEGLI metric

(12)

Email and Direct mail are the two most preferred channels of communications

MC -

MC-11 Source: E Source

(13)

The numbers for NYS show that as customers age, their preference for email and

direct mail communications increases

(14)

While email distribution may be large, industry open rates can vary around the

20% rate meaning 80% of customers may not have seen your message

MC-13 Source: Questline Eservices

(15)

Direct mail allows for the specific targeting of customers with tailored messaging,

in this case income eligible Energy Assistance prospects

MC-14 Source: PSEGLI

(16)

64% of large utilities in the USA and Canada spend on average over $5M

on their marketing budgets

(17)

What successful marketing and advertising strategies have utilities used to raise

awareness and participation in their Home Performance with Energy Star programs?

The most common marketing channels that programs are using include direct mail, e-mail marketing, online banner ads, radio ads, and contests.

• According to NYSERDA, there is no marketing strategy that the organization hasn’t used. NYSERDA’s HPwES program has used many common consumer channels, such as billboards, radio, TV, newspapers, and online marketing. The possibilities are endless, but some of the best advertising that the organization has had is increasing energy prices. Every time people get their utility bills, requests for audits increase.

• Austin Energy’s marketing department sends out about six mailers a year for the HPwES program, and the utility has found that these get the biggest bang for the buck. Customers can fill them out and send them back in. Those leads are distributed to the contractors. The utility has also advertised federal tax credits as well as created radio ads to help raise

awareness.

• Salt River Project did a series of online banner ads to promote its HPwES program in 2014. SRP also sent [a] direct mail piece to a targeted group of customers who were selected based on their propensity to replace their HVAC systems or air conditioners. The utility experienced a 100 percent lift of website visits within three days of the drop dates and reached its overall goal of 1,400 completed assessments.

(18)

How do utilities use imagery to promote energy-efficiency programs to business

customers?

PPL developed a comprehensive marketing campaign using mass advertising. To raise awareness and support the efforts of trade allies, the utility leveraged extreme segmentation and highly targeted messaging to motivate action. The goal was to increase small business customer participation in the utility’s E-power rebate programs to help support the company’s energy efficiency and conservation plan and to meet state-mandated energy-reduction targets.

Strategy and tactics.

PPL developed a comprehensive multimedia campaign, including advertising (TV, digital, and print), marketing collateral (brochures and displays), a chamber of commerce effort, outreach teams, trade ally communications, social media, and a targeted direct mail stream (hard copy and e-mail).

Results.

Across the targeted and segmented efforts, 647 small business energy-efficiency projects were tracked to this campaign, with total savings of 55,264,896 kilowatt-hours (kWh) per year. The campaign helped PPL exceed its energy-efficiency targets for the small business segment and

contributed to the company exceeding its overall energy-efficiency target of 1.146 billion kWh per year by 25 percent for the first phase of the state-mandated program.

(19)

What motivates noncompetitive utilities to advertise?

Florida Power & Light ran a value and image campaign in 2011 and used TV, radio, print, and online media. The campaign’s goal was to put the daily cost of electricity into perspective. According to FPL, “Customers who saw our ad campaign rated us 8 points higher on customer value and on the overall effectiveness of our communications. Awareness of our key messages is at an all-time high—above 90 percent—as a result of the ad campaign.”

Which utilities have used television advertisements to promote home energy audit

tools?

Georgia Power’s Sniff Out Savings campaign, which featured TV, print, and radio ads. This

promotion generated a significant increase in the utility’s audit program participation, from just 1,800 customers using the online energy checkup tool before the campaign kicked off to over 60,000 customers using the tool at the conclusion of the promotion

(20)

TV as a media channel on Long Island has the ability to deliver almost 3 times

more customer impressions than a similar investment in Newsday

MC-19 Source: HN Media

(21)

JD Power - 2015 W1-3:

CC3 Familiarity with utility energy efficiency or conservation programs

= % respondents Customer satisfaction rises as familiarity with

energy efficiency and conservation programs

increases.

PSEGLI customers are 16 percentage points behind leading east large utilities

in program familiarity. Increased

communications to the customers through multiple channels about our energy efficiency and

conservation programs will provide additional

opportunities for customers to lower their

bills.

65%

Unfamiliar

49%

+84 Points +64 Points MC-20 Source: J.D. Power

(22)

Sampling of the 88 Newsday articles about PSEGLI May YTD, PSEGLI is currently

not in market enough to counter this information

MC-21 Source: Newsday

(23)

Utilities across the country are facing the same budget, communication and

messaging challenges

(24)

2015 JD Power W1-3 Recall utility communications (past 3 months)

Overall Customer

Satisfaction is higher for

those who recall Utility

Communications

(+ 54 pts)

= % respondents

+54 Pts

(25)

With respect to receiving information around Energy Efficiency information,

customers top 2 choices for communications: email and direct mail

_{MC -}

(26)

JD Power - 2015 W1-3: Average Monthly Bill & Fairness of Pricing

PSEG Long Island and BGE

Baltimore Gas & Electric (one of the leading utilities

in the East Large region) customers report a higher

monthly average bill than PSEG Long Island. Even in this high price environment, by effectively

communicating with its customers through a mass

media multichannel marketing campaign BGE

customers now believe pricing is fair for the

services provided.

(27)

JD Power - 2015 W1-3: BP1 Type of Monthly Bill Statement

Satisfaction is significantly higher for those receiving

Electronic statements. A continued shift from Paper

(> 75%) to Electronic will improve satisfaction. Leading East Large utilities have 50% more customers

receiving electronic statements than PSEG Long

Island.

Promotions through multiple channels to encourage customers to go paperless

will increase overall satisfaction with the utility.

= % respondents

+33 Points

+57 Points

(28)

JD Power - 2015 W1-3: BP8 Online account set up on utility’s website

Significantly higher satisfaction is reported by

respondents with online accounts.

PSEG Long Island is 11 percentage points below top East Large utilities in online account set up. Encouraging sign-up for My

Account can increase convenience for a customer

and overall satisfaction. = % respondents

+58 Points

+52 Points