HomeMy WebLinkAboutAgenda Report - April 4, 2017 B-01 SMTM
CITY OF LODI
COUNCIL COMMUNICATION
AGENDA TITLE:
MEETING DATE:
PREPARED BY:
AGENDA ITEM
a -i
Receive Update on Lodi Electric Utility Strategic Planning and Provide Direction
April 4, 2017
Electric Utility Director
RECOMMENDED ACTION:
BACKGROUND INFORMATION:
Receive update on Lodi Electric Utility strategic planning and
provide direction.
In December 2015, the City Council adopted a resolution
authorizing the City Manager to execute an agreement for Lodi
Electric Utility (LEU) strategic planning and facilitation with
Hometown Connections International, LLC, of Lakewood, Colorado.
The first phase of the LEU strategic planning effort was a customer engagement service performed by
Hometown Connections' market research partner, GreatBlue Research, Inc. Their report (attached) was
presented to the City Council in June 2016 and will be utilized in the strategic planning process.
The next phase is an open and transparent process with decisions and priorities shared broadly with staff
and the community allowing for participation by all stakeholders. Hometown Connections' two -team
approach provides training and facilitation on how to effectively utilize the strategic planning process to
develop and execute a strategic plan for Lodi's Electric Utility. The Advisory Team is comprised of the
LEU Director, City Manager, and one or two City Council members. This team is responsible for setting
major policy direction, removing road blocks, as well as reviewing and approving the strategic plan
throughout the process. The Implementation Team is comprised of the LEU Director and senior staff
responsible for developing and implementing the strategic plan. The Implementation Team acts in
support of the Advisory Team to provide operational, financial, customer service information, and other
insights as needed for the Advisory Team to act with appropriate and current information.
In February 2017, Hometown Connections met with the Advisory and Implementation Teams to begin the
strategic planning discussion. The topics included the benefit of strategic planning; LEU's vision, mission,
and values; customer target markets; strengths, weakness, opportunities, and threats (SWOT) analysis;
and strategic areas of focus.
At this meeting staff and Hometown Connections will provide the City Council and LEU's customer -
owners with a report of the strategic planning activities completed to date, along with an open discussion
to seek policy direction going forward in the strategic planning process.
FISCAL IMPACT:
FUNDING AVAILABLE:
EAK/Ist
Not applicable.
Not applicable.
Elizabeth A. Kirkley
Electric Utility Director
APPROVE
auer, City Manager
Customer Satisfaction Study
City Council Meeting
greatblue
Report of Findings
15 June 2016
Table of Contents
IN-' I
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SECTION ONE
About GreatBlue
SECTION TWO
Project Overview
SECTION THREE
Key Study Findings
SECTION FOUR
Considerations
Table of Contents
SECTION ONE
About GreatBlue
SECTION TWO
Project Overview
SECTION THREE
Key Study Findings
SECTION FOUR
Considerations
EXHIBITS
Aggregate Data (Provided Separately)
ArLkdkri to1212‘; �
:)412414fial2
ime
% ILI XI *WO f Eike PI 414,2
4 i y SSS '
4 1
Evcence- oasoc rosoarch
across cvorso incusthcs
Our experience in instrument design affords our clients
actionable analytics to help them identify, address, and
improve offerings to, and the way they communicate with,
their key constituents.
With more than 35 years of experience in diverse markets,
our consultative approach ensures our data can be the
basis to make important business decisions.
Cross -functional engagement teams ensure a complete
view of the issues and solutions.
GreatBlue Research, Inc.
Slide /
Expertise in a cverse set
of research methocoocer
L
Having conducted millions of surveys and thousands of focus groups over the past 30+ years, our experience in
instrument design, data collection and the presentation of those findings in manageable, actionable ways allows us to
serve our clients across the spectrum of research studies.
Telephone Interviews
In-house, multi-lingual
interviewing capabilities
Digital Surveys
Web + mobile -based
survey programs
Focus Groups
State -of -the -Art
facilities in CTand MA
In -Depth Interviews
Trained researchers allow us to
dive deep in a 1:1 setting
GreatBlue Research, Inc. Slide /
Awareness/Perception
Market Feasibility
MarComm
Reg Compliance
Efficiency
Customer Satisfaction
Solutions that focus on
strategb anc ooeraUona
neecs of clients
Whether direct to clients or through their agencies, we apply
our core research methodologies, often applying a mixed
methodology to ensure a study that captures both quantitative
and qualitative information, to ensure our solutions exceed
client expectations.
GreatBlue Research, Inc. Slide /
Table of Contents
SECTION ONE
About GreatBlue
SECTION TWO
Project Overview
SECTION THREE
Key Study Findings
SECTION FOUR
Considerations
EXHIBITS
Aggregate Data (Provided Separately)
■
•
ti
1
Project Overview
O GreatBlue was commissioned by Lodi Electric Utility (hereinafter "Lodi Electric" or "LEU") to conduct
comprehensive research among a cross-section of customers to gain a deeper understanding into their
perceptions of the utility and satisfaction with the services provided.
Cs The primary goal of this research study was to assess the effectiveness of Lodi's ability to serve its customers,
identify areas for improvement, and isolate areas that may increase engagement.
O In order to service this research goal, GreatBlue conducted telephone surveys among a random sampling of
Lodi's residential customers. Focus groups were also conducted among a select number of residential and
business customers to inform the subject matter of the survey and, where applicable, aid in elaborating on survey
findings.
O The outcome of this research will enable Lodi personnel to a) more clearly understand, and ultimately set,
customer expectations, b) act on near term opportunities for improvement and, c) create a strategic roadmap to
increase customer satisfaction.
GreatBlue Research, Inc. Slide /
The Lodi Electric Utility Customer Satisfaction Study
leveraged a multi -mode research methodology to address
the following areas of investigation:
o Perception of local utilities and area organizations
Rating Lodi's organizational characteristics
LT) Satisfaction with customer service and/or field
personnel
o Preferred methods of communication
o Interest in services and products offered by Lodi
o Interest in Lodi having a renewable energy portfolio
o Demographic profile of respondents
research
1
Methodology
1 Telephone
Target
Residential
Vethoc
No. of Completes
800
Quality Assurance
DuaIIeveI**
oogy
Sna
No. of Questions
67*
Margin of Error
3.4%
oshot
Time Compensation
None
Confidence Level
Sample
Customer list
Research Dates
95% Apr2O-May9
*This represents the total possible number of questions; not all respondents will answer all questions based on skip patterns and other instrument bias.
**Supervisory personnel in addition to computer-aided interviewing platform ensure the integrity of the data is accurate.
GreatBlue Research, Inc. Slide / 10
Survey
Res
oonc
ent
Sna
oshot
This slide quantifies select data points to provide context for the quantitative
research study. The following graphs provide an empirical view into the
demographics of the survey respondents.
Age
Refused
5.0%
Ec
ucation
Refused
5.6%
H eh school,. .EL)
ai.s%
2year c e,
1'st gtradute28.1%
9,.5%
4 year co �e rad
30 . 5`
Genc
er
Roso
ncy
Refused
5.0%
GreatBlue Research, Inc. Slide /
research Vethoc
Methodology
Focus Groups
Target
Customers
Length of Session
oogy
Sna
oshot
Time Compensation Sample
75/participant Customer List
Discussion Moderation Research Date
0-90 minutes GreatBlue March 24
Participant Criteria
Commercial
Residential
GreatBlue Research, Inc. Slide /
Focus Grou
Participants:
Resc enUal
Customers
This slide quantifies select data
points to provide context for the
qualitative research study. The
following graphs provide an
empirical view into the segments
and demographics of the
participants.
3
10
6
4
2
Length of time
as customer
Gender
Male Female
Less than 10 years 11-2Oyears 21 years or more Undisclosed
GreatBlue Research, Inc. Slide /
Focus Grou
Partici pants:
Commercial
Customers
This slide quantifies select data
points to provide context for the
qualitative research study. The
following graphs provide an
empirical view into the segments
and demographics of the
participants.
3
10
6
4
2
Length of time
as customer
Male Female
0
Less than 10 years 11-2Oyears 21 years or more Undisclosed
GreatBlue Research, Inc. Slide /
Table of Contents
•0•
SECTION ONE
About GreatBlue
SECTION TWO
Project Overview
SECTION THREE
Key Study Findings
SECTION FOUR
Considerations
EXHIBITS
Aggregate Data (Provided Separately)
M.
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O When compared to other utilities (gas, phone, water, cable, etc.), respondents had a comparatively favorable
perception of the service they receive from their electric utility. While the highest frequency of respondents had a
favorable perception of their "gas company" (88.0%), it was followed second by their "electric utility" (75.8%).
In addition, 62.8% of residential customers reported that Lodi Electric closely aligns with their perception of an
ideal utility experience.
O Lodi Electric was rated satisfactorily by a majority of customers when evaluated on a series of nine (9)
organizational characteristics. When "don't know" responses were removed from the data, the average positive
rating among residential customers was 62.7%. The top individual areas rated were "maintaining a modern and
reliable infrastructure" (74.5%) and "overall satisfaction with Lodi Electric" (67.0%).
O Contact resolution was the primary driver of satisfaction. When contacting Lodi Electric, only 59.4% reported
having their issue or concern taken care of on the first contact.
Further, when rating the organization, those respondents who experienced first contact resolution provided an
average positive rating of 72.3% compared to those that did not, who provided an average positive rating of
only 22.8%.
GreatBlue Research, Inc. Slide /
Ke
y
Stuc
yHnc
i
inc
L.
S, CO
(,t1
od
O 43.8% of residential customers reported calling or visiting a Lodi Electric office in the last 12 months, and among
those respondents, 71.7% were satisfied with the customer service employee who handled their call or visit.
O 6.1 % of residential customers reported having a field service representative visit their home in the last 12 months,
and among those respondents, 79.6% were satisfied with the field service employee who visited their home.
Cs 69.5% of residential customers reported Lodi Electric meets their expectations either "all" or "most" of the time.
The top three expectations reported among respondents include "affordable prices/lower prices" (38.9%),
"reliability" (25.6%), and "good service" (17.5%).
Cs Lodi Electric's billing was reported to be "easy to understand" and to "accurately detail the separate charges for
electric, water, wastewater, and solid waste charges" by a strong majority of residents (79.8% and 84.6%,
respectively).
However, it should be noted that 50.2% of respondents reported Lodi Electric's rates were "higher than
surrounding towns."
GreatBlue Research, Inc. Slide /
Ke
y
Stuc
yHnc
1
inc
L.
S, CO
(,t1
od
O In general, residents only provided moderate support for the expansion of solar energy in Lodi Electric's service
territory. 47.0% of respondents reported Lodi Electric should be "somewhat" or "very" conservative when it
comes to efforts to expand solar energy, with 67.6% reporting to be "unwilling to pay anymore" to compensate
for those efforts to grow solar.
However, 43.8% of residents were interested in Lodi Electric providing "solar rebates" for those customers
who had the desire to develop solar energy for their individual dwelling.
O Avast majority of those residents who experienced an outage in the last 12 months reported to be "satisfied" with
the time it took to restore power (81.2%).
O "Lodi Electric website" (31.6%) or "internet" (31.1 %), in general, were residents' preferred sources of information.
O Finally, customers reported a relatively strong relationship with Lodi Electric, as the utility scored a net positive
rating - defined as advocacy+loyalty+satisfaction - of 73.3% among residents.
Further, 68.9% of respondents reported to have "a great deal of trust" or "some trust" in Lodi Electric.
GreatBlue Research, Inc. Slide /
erceotons of eecthc utility stronc
While perceptions of their gas company were highest; electric utilities and, thus,
Lodi Electric received comparably positive ratings among other area organizations
measured. However, slightly fewer residential customers (62.8%) believed Lodi
Electric compared closely to their ideal utility.
As I read a list of
area organizations
and companies
providing services
to you, please rate
each on the quality
of their overall
customer service. 25.0%
(w/o "Don't Know"
responses)
100.0%
75.0%
50.0%
62.8%
of residents report Lodi
compares closely to
their ideal utility
7 I
9
73 L
')/0
Internet Provider CableTVCompany Water Company Phone Company
Electric Utility
Gas Company
GreatBlue Research, Inc. Slide /
Loc
i'� service + staff c
rive ratings
Customers provided an average positive rating of 62.7% regarding Lodi Electric's organizational characteristics. While lack
of awareness drove some lower ratings, the perception that Lodi Electric "helps customers conserve electricity" (56.0%)
and "provides good service and value for the cost of electricity" (53.6%) received the lowest ratings. Furthermore, only
52.1 % of customers believed the rates they pay for electricity are "reasonable." However, most customers expressed
interest in rebates that may help them conserve electricity.
Item: Organizational Characteristics
Maintaining modern and reliable infrastructure
Overall satisfaction with Lodi Electric
Helpful and knowledgeable staff
Responding promptly to customers questions and complaints
Communicating with customers
Being open and honest about company operations and policies
Community involvement
Helping customers conserve electricity
Providing good service and value for the cost of electricity
Average positive ratings
GreatBlue Research, Inc.
2016 2016
w/ "Don't Knows" w/o "Don't Knows"
59.4
65.9
51.0
50.3
56.1
46.3
32.3
44.8
50.6
50.7
74.5
67.0
66.0
64.9
64.2
59.0
58.9
56.0
53.6
62.7
52.1%
of customers believe the
rates they pay for electricity
are "reasonable"
60.7%
of customers were
interested in Lodi providing
"rebates for energy efficient
appliances"
Slide / 20
Low rate of first
contact resolution
In general, Lodi Electric tends to resolve 3 out of
5 issues on the first contact for residential needs;
however, 28.9% of respondents reported
requiring multiple contacts to have their issues
resolved.
75.6%
of customers
Contact resolution has a strong correlation with
overall satisfaction. More than 7 out of 10 customers
who had to have repeated contact were dissatisfied
with the Lodi Electric.
100.0%
75.0%
50.0%
25.0%
Generally, when you contact Lodi Electric, are things taken care of to your
satisfaction the first time, or must you have repeated contact with them?
59,4%
0 --
11796
Takes care of things first time Must have repeated contact Varies/DK
Residential (N=350)
GreatBlue Research, Inc. Slide /
contact resouUon im
groves raUngs
Interestingly, customers who had their issues resolved with first contact consistently provided a higher frequency of positive
ratings for the organization. Those who required multiple contacts to resolve issues provided significantly lower scores for
each of the utility's characteristics. The lowest scores recorded were, understandably, "communicating with
customers" (18.3%) and "being open and honest about company operations and policies" (13.6%).
Item: Organizational Characteristics
2016 Residential First -contact Multiple -contact
w/o "Don't Knows" resolution resoletion
Maintaining modern and reliable infrastructure 74.5 84.4
Overall satisfaction with Lodi Electric 67.0 75.2
Helpful and knowledgeable staff 66.0 80.5
Responding promptly to customers questions and complaints 64.9 73.9
Communicating with customers 64.2 72.8
Being open and honest about company operations and policies 59.0 67.2
Community involvement 58.9 73.8
Helping customers conserve electricity 56.0 59.2
Providing good service and value for the cost of electricity 53.6 63.5
Average positive ratings 62.7 72.3
37.1
24.4
22.7
23.4
18.3
13.6 :3
19.0
23.1
23.7
22.8
GreatBlue Research, Inc. Slide / 22
SaU sfl ec
with offne
personnel
Residential customers reported contacting Lodi Electric's office personnel primarily for procedural items such as paying bills
or initiating/terminating service. However, a segment of customers contacted LEU regarding a "high bill/bill error" (19.1 %).
While 71.7% of customers were satisfied with the interaction, LEU's ability to resolve these contacts with a stronger rapport
and willingness to assist can help mitigate reasons for dissatisfaction that are beyond control, such as long wait times.
100.0%
75.0%
50.0%
25.0%
How satisfied were you with the service
provided by the Lodi Electric employee?
4O4%
71.7%
7.7%
-19 zi-%
Very satisfied Somewhat satisfied Somewhat dissatisfied Very dissatisfied
Residential (N=350)
GreatBlue Research, Inc.
(
39.4%
� Make a pay
To
0
21.7% 19.1%
Start/stop services/ \High bill/bill error
seasons for Contact
28.4%
\\Rude/unfriendly
To
3
20.0%
Unhelpful/lack of
understanding/
seasons for
( 16.8%
Long wait
dissatisfaction
Slide / 23
ustomor sorvbo can stanc
arc
1
IZP
O Detailed findings from the focus groups support a sense of inconsistency in terms of customer service. This may be
indicative of the low rate of first contact resolution. While customers acknowledged the quantity of inquiries that CSRs
deal with on a daily basis, a standard experience was lacking for both the residential and commercial focus groups.
"The purpose of the visit was to pay a bill and since then I have gone to online bill payment because they Just ruin your day. They have no empathy." - Resident
"It's very interesting because depending on the reason you're there the same exact people will give you different customer service." - Resident
"They need to be reminded that, for them, we're number 300 but for us it's the only time we're having that interaction. They may have heard this problem 300
times; we are saying it for the first time from our perspective. They need to remain compassionate and understand that we are one individual case; we are not
number 300 even though we are 300." - Resident
"They've got their script and they can't deviate from the script." - Resident
"If you think about it the first day you start a job you are so overwhelmed and they are training you to do something and you can't possibly remember
everything in training and you don't even know if it's going to apply to you until after the fact later on down the road when you've completely forgotten what to
do." - Resident
- "I do know that with Lodi Electric their customer service is very poor. Their CSR's are not trained well enough to handle the high quantity of people that walk in
both residential and commercial." - Business
Note: Copy in blue italics are quotes transcribed verbatim from focus group sessions.
GreatBlue Research, Inc. Slide / 24
Satisfaction hgher wth fiec
Residential customers reported slightly higher ratings of satisfaction
with the field personnel (79.6%) than with office personnel. The top
reasons respondents required a field visit included "meter reading,"
"service problems," and "installing service."
100.0%
How satisfied
were you with 75.0%
the service
provided by
the Lodi
Electric
employee? 25.0%
50.0%
L c C)
79.6%
71
personnel
20.4%
Meter reading
16.3°/a
Service problem Install service
To
0
Roasons for Visit
Very satisfied Somewhat satisfied
6.1%
10,2c
Somewhat dissatisfied
Residential (N=49)
Very dissatisfied
GreatBlue Research, Inc. Slide / 25
Cx
oeotaUons oonsstent amonc all
v
Residential and commercial customers were generally in agreement about their top expectations of Lodi Electric. "Affordable
prices/lower prices," "reliability," and "good service" or "customer service," were the common themes that drive a good
experience working with LEU, which was reiterated by business customers in the focus groups. In addition, 69.5% of
residential customers reported Lodi Electric met their expectations of the utility either "all" or "most" of the time.
100.0%
75.0%
50.0%
25.0%
What are your top three
expectations of Lodi Electric?
38 9
6
of residential customers
report Lodi meets their
expectations "all" or
"most" of the time
r
YL
Affordable prices/lower prices Reliability
Residential
Good service
"1 think price stability is a big one for us; knowing what we're
going to pay month to month and keeping that stable. When you
annualize it out over 12, 18, 24 months it's pretty steady but the
month to month swings are very concerning." - Business
"Reliability, knowing that you have your electricity every day
when you come in and turn the switch on it's going to work, cost
of what your utility is and customer service. If you ever have a
problem you'll know that they will be there for you." - Business
"1 think reliability is number one, cost probably number two and
customer service but as long as the power is on I really don't
need it." - Business
GreatBlue Research, Inc. Slide / 26
RoHa
offity
anc
rato s ro at v 0 cc
As affordable prices and reliability were top expectations of residential and commercial customers in both the survey and
focus group findings, it is understandable that customers would believe these aspects are intertwined. As such, while
residential customers leaned towards a balance of reliability and rates, a slightly higher frequency of customers placed
importance on reliability (55.6%) than rates (44.4%).
100.0%
75.0%
50.0%
25.0%
Which of the following statements best describes how you feel
about the importance of reliable electric service and rates?
3 t
29,4
Reliability significantly more important Reliability somewhat more important
Residential
Rates somewhat more important Rates significantly more important
GreatBlue Research, Inc. Slide /
RoHa
offity stronc, orom
ot
res
oonse Umo
O Residential customers were appreciative that the reliability of their electric service was consistently a strength of
LEU. Focus group participants reflected on past rolling blackouts throughout California in which they were not
subject to a loss of power, and recognized the benefit of that service.
"I think the service itself is pretty good. We don't get black outs; the power stays on." - Resident
"I was living here when we had that big powershortage and the state sent rolling blackouts throughout the state Lodi Electricsaid not us; we don't
have to do that and they didn't. That was a plus for the consumer but environmentally negative." - Resident
O Business customers participating in the focus groups cited the same instances of maintaining power while the rest
of the State experienced blackouts. In addition, when there were outages due to ancillary problems, commercial
customers noted that LEU responds promptly to get their power back up and operating smoothly.
"We had a contractor that backed up and knocked our pole down in our back lot and the City was out there in pretty quick time and had it back up. I've
had really good luck with the City ofLodi."- Business
"I will say I like it when California was experiencing rolling blackouts we never did; we have very few problems. We don't usually have a huge loss in
service and when we do they're back up immediately." - Business
- "If you have a problem and you call they're there. They're really easy." - Business
GreatBlue Research, Inc. Slide / 28
Outace restoration satisfactory
Very promisingly, 81.2% of residential customers' who experienced an outage in the past 12
months were satisfied with the amount of time it took to restore power. In addition, customers
indicated strong preferences to enroll in automated, digital communication for outage updates
should they become available.
100.0%
75.0%
50.0%
25.0%
How satisfied were you with
the outage restoration time?
1
4B,1%
81.2%
1
72% 6.1% 5.5%
Very satisfied Somewhat satisfied Somewhat dissatisfied Very dissatisfied DK
Residential (N=181)
GreatBlue Research, Inc.
LkeytoenroHn...
39.3%
\ Text messaging
34.6%
Telephone/
Robo-calls
23.8%
Email
Slide / 29
Dostvo reaUonshi
3 with Loc
1
1
Lodi Electric scored a net positive score (advocate + loyal + satisfied customers) of 73.3% in 2016. While a similar
percentage of customers reported having "trust" in the utility (68.9%), a segment of customers identified as "less than
satisfied" (20.8%) which could jeopardize potential initiatives that require a great deal of trust in Lodi.
100.0%
75.0%
50.0%
25.0%
How would you best describe your
relationship with Lodi Electric?
0
68.9%
of residential customers
have "a great deal" or
"some" trust in Lodi
7 A
t 0 t
2.9% 6.0%
Advocate Loyal
Satisfied Less than Satisfied DK/neutral/no relationship
Residential
GreatBlue Research, Inc. Slide / 30
Soar growTh may
30 SOW. r
oRtcs necessary
A small segment of residential customers (37.0%) reported an aggressive approach to develop solar energy would be desired
if it ultimately incurred a cost. Furthermore, 67.6% of customers were unwilling to pay additional costs to cover the expansion
of solar; however, rebates may sway those unsure of their commitment to solar. Commercial customers who participated in
the focus group were generally aware of, and had taken advantage of, many of the rebate programs and incentives available
to help businesses operate more efficiently.
100.0%
75.0%
50.0%
25.0%
How aggressive would you like
Lodi Electricto be in their
efforts to expand solar energy
throughout their service
territory considering that more
aggressive measures typically
result in a higher cost?
67
of residential customers were
"not willing to pay anymore" to
compensate for efforts to /
expand solar
43,8%
of residential customers were
interested in Lodi providing
"solar rebates" /
5,5-'0
r
co )
Li (-X)
L
113LO%
Very aggressive Somewhat aggressive Somewhat conservative Very conservative
DK
"We're a fairly sizeable industrial
consumer and in the past several years
Lodi Electric has done a good job of
being aggressive when it comes to
rebates and incentives to keep the cost
competitive. - Business
- "There were rebate programs that we
capitalized on." - Business
"LED, energy efficiency stuff, new hire
stuff; we were able to capitalize on all of
that." - Business
GreatBlue Research, Inc. Slide /
Renewa
ol
encrgy c
manc
may c
O Residential customers in the focus groups expressed an interest in renewable energy, such as wind or solar, as long as
there is a clearly outlined plan for implementing the alternative. In addition, there was a general consensus that the City of
Lodi could be trusted to offer alternative energy; there was a general distrust of third -party vendors. Further, both
residential and commercial customers saw the perceived return on their investment.
- "I think it needs to be very well outlined. We need baby steps, maybe we're going to implement this in this part of Lodi which seems to have the highest bills.
Because of how old the houses are or because the electrical might be old and wired differently or less efficiently or something of that nature so maybe they are
going to implement it and we're all going to be onboard and maybe be a 3yearplan."- Resident
"California already has a bunch of regulations and we're pushing harder regulations as time goes on so I think it's in our best interest." - Resident
- "There are so many third parties and some of them are legitimate, but others are not. The City of Lodi has checks and balances and regulations that it does
have to show proof of and such. Those third party suppliers and the third party gas suppliers do not have the same regulations and they kind of own you and it's
hard to take them to court and sue them. Yes and I think everyone agrees that the City of Lodi we can at least put our trust in them." - Resident
- "Hydroelectric is great and wind turbine is great but they talk about how you have to do this bio gas stuff and that's not sustainable. I think Lodi Electric should
maybe get more involved in solar and not have to buy as much power." - Business
- "But like everything else we're all looking at returns right. Returns on our investments so like you were saying; if you have to pay the piper a little bit up front to
get it back later." - Business
GreatBlue Research, Inc. Slide / 32
easy to unc
erstanc
bs; C
scounts less so
While residential customers generally understood their bills (79.8%) and how the separate charges are delineated (84.6%),
fewer customers believed the programs designed to provide energy assistance or discounts were adequate. However,
significantly fewer customers were able to provide a rating, indicating there may be a lack of awareness regarding the
energy assistance and medical discount programs. Raising awareness of the programs available to assist with bills may
assuage the perception that the prices they pay are "higher than surrounding towns," especially in comparison to PG&E.
Statement..
Lodi Electric bills are easy to understand
Lodi Electric bills accurately detail the separate charges
for electric, water, wastewater, and solid waste charges
Lodi Electric has adequate energy assistance programs
to help low and/or fixed income customers with bills
Lodi Electric has an adequate medical discount program
2016
w/ DK
2016
w/o DK
77.4 79.8
80.4 84.6
27.2 66.6
15.6 64.8
believe the prices they
currently pay for electric
service are "higher than
surrounding towns"
3(.8%
of customers were
thinking about PG&E
when comparing
GreatBlue Research, Inc. Slide / 33
ommunbaUons aHgn wth
preferences
Residential customers' current means of receiving information from Lodi aligned with their communication preferences,
with a tendency to prefer the company's website. However, focus group participants were in nearly full agreement that the
LEU website had caused issues for them in the past, especially in regards to navigation and ease of finding information.
Item: Communication Methods
2016 2016
Current Preferred
Lodi Electric website
Internet
Bill inserts
5
provided a positive rating for
"ease of finding information"
on LodiElectric.com
32.3
30.4
26.0
31.6
60.5%
31.1
24.4
provided a positive rating
for "quality of information"
on LodiElectric.com
- "Going out to the website isnot exactly easy; I don't even know what website to
go to." - Resident
"I pay my bills online also. I find the City of Lodi's website very customer
unfriendly; user unfriendly." - Resident
"I couldn't find my bill from this last billing and 1 never logged in online and the
only way you can register is with your account number and your customer
number. I would like another alternate way like my social security number or my
address." - Resident
- "PG&E their online billing and being able to go in there and pay a bill and look
at my statement was very easy. With Lodi Electric it's very difficult; I've had some
problems trying to get into the website and look at my bill." - Business
- "On the website there is not a lot of information on who to contact and how for
what you're looking for and you then have to call the city." - Business
GreatBlue Research, Inc. Slide /
VooUeaoousefufor / 36.1%
account information
While only 1 out of 3 customers expressed initial interest in
downloading a mobile app for Lodi Electric, residential
customers reported an interest in accessing information
related to their account. Most importantly, the ability to
make bill payments was the most desired feature (53.2%)
should an app be developed.
GreatBlue Research, Inc.
: (
•
•
•
were interested in
downloading and using a
mobile app from Lodi
Ty
53.2%
Bill pay
3o of information. , ,
14.6%
Usage/monthly
comparisons
6.5%
Rates/payment
options
Slide / 35
Table of Contents
• •
SECTION ONE
About GreatBlue
SECTION TWO
Project Overview
SECTION THREE
Key Study Findings
SECTION FOUR
Considerations
EXHIBITS
Aggregate Data (Provided Separately)
44•LL
e
4
r .
Iv_=
il
4
sirk,
Consc
eraUons
CI Improve contact resolution. Overwhelmingly, contact resolution was the key driver in satisfaction, or lack
thereof, with Lodi Electric. While technological and infrastructure improvements may be necessary to improve
contact resolution in the long run, providing explanations and setting expectations are key stop -gaps to improving
customer experience when reaching out to Lodi Electric. CSRs should inform customers of the process in which
their issue will be resolved, including additional personnel - such as field reps - that will be required to assist.
One additional option may be improving the self-service offerings contained on Lodi Electric's website. This
may help reduce incoming call traffic to Lodi's offices along with providing a preferred option for those
customers that favor self -servicing their issues or concerns.
CI Develop and promote energy efficiency services. While Lodi Electric offers several programs and rebates
related to energy efficiency, the residential energy efficiency audit is, currently, the only option that has prominent
placement on Lodi Electric's website homepage. This may be leading to the perception Lodi could be doing more
to help customers conserve energy. Rotating services and offerings to list other customer programs on the home
page may help Lodi Electric communicate their diverse energy efficiency rebates and services.
Heavy promotion of these rebates and services may also help mitigate the perception of Lodi Electric having
higher rates than surrounding areas.
GreatBlue Research, Inc. Slide /
Consc
eraUons
O Continue to investigate solar. While initial support for expanding solar energy was moderate, this support and
desire may grow in the coming months or years. Additional research, directed towards customers currently using
solar energy or in the process of developing solar, may be beneficial to understanding any difficulties or issues that
arose during the process of incorporating solar. This may help Lodi Electric proactively correct any procedural issues
customers experienced as they attempted to incorporate solar power into their residence, as well as anticipate
organizational difficulties such as net metering or load response should the demand rise in the coming years.
This may also provide an opportunity to train Lodi Electric's CSRs on solar related issues and FAQs, as
customers had a higher level of trust in Lodi Electric compared to third -party solar vendors.
Cs Mobile has merit. There is a moderate initial demand for a Lodi Electric mobile app. Features could include:
paperless billing and account details, monthly usage and comparisons, and available rebates/incentives. Many apps
are downloaded and underutilized, thus research and user experience testing prior to any development should be
prioritized should this be an option Lodi Electric considers.
While Lodi Electric may project out the development of a mobile app for the distant future, improvements to the
website should be mindful of mobile -friendly features to accommodate customers accessing website information
via a smart phone on mobile device in lieu of a mobile app.
GreatBlue Research, Inc. Slide / 38
(860) 740-4000
MJV@GreatBlueResearch.com
LODI ELECTRIC UTILITY
STRATEGIC PLANNING
UPDATE
Special City Council Meeting
April 4, 2017
Agenda
Introductions
Timeline
National Trends
Local Issues
Strategic Planning
Benefits of Joint Action - NCPA
Introductions
Hometown Connections
Tim Blodgett, President and CEO
Phyllis Currie, Executive Consultant
NCPA
Randy Howard, General Manager
Strategic Planning Timeline
December 2015 — City Council authorization
March to May 2016 — Performed Customer Research
Focus Groups
Telephone surveys
June 2016 — Customer Research Report to City Council
February 2017 — Strategic Plan kickoff
April 2017 — Strategic Plan update to City Council
May 2017 — Finalize Strategic Plan
Ongoing updates to City Council
Why is Strategic Planning needed?
After 100 years, the business model of our industry
remains largely unchanged: keep the lights on and send
out a bill
r . Cie' c '
U
07 � *t+4§'oe\cavi
0
{►�'
Q .s477 .,,,bd . #' f 1Il':i
National Trends
Increasing regulations
Changing power supply
Aging infrastructure
New technologies
Higher customer expectations
More workforce turnover
Increasing financial pressures
Local Issues
CUSTOMER
Challenges with new billing
system
Improving customer
communications
Expanding customer programs
and incentives
FINANCIAL
Changing utility business model
Increasing power costs
Financial sustainability
WORKFORCE
Safety
Succession planning
TECHNOLOGY
Meet customer needs
Improve operations
RELIABILTY
System maintenance and
improvements
LEGISLATIVE/REGULATORY
Loss of local control
Unfunded mandates
7
Benefits of Strategic Planning
Articulation, Focus, and Alignment on Values/Priorities
Employee Ownership/Empowerment
Community Support
System Improvement
Budget Management
Continuity through changing staff and board
A Public Power Strategic Plan Is Not:
Someone else's plan airlifted into your company
A consultant -centric plan
Assigned to one individual or team to develop
A once -every -five-year effort that is ignored the
rest of the time
Heavier than a bowling ball
Strategic Planning Process
Discovery
Development
Focus
Goals
Action Items
Accountability
LEU Mission and Values
LEU is your locally -owned energy partner
committed to the needs of the community;
providing safe, reliable electricity in a customer -
focused manner at a competitive cost.
• Anticipate and respond professionally to the needs and concerns of our
customer -owners
• Provide valued services at competitive rates in a transparent and ethical
manner
• Promote professional growth and development of our workforce
• Maintain a flexible organization which adapts to the changing utility industry
• Contribute to the economic vitality of the community
Large enough to meet your needs
Small enough to care
Customer Needs
Residential — (reliability, information, communication,
payment options, incentive programs, competitive rates)
Commercial — (reliability, economic development rates,
competitive rates, incentives, energy efficiency rates,
billing/consolidated billing)
Industrial — (reliability, power quality, technical support,
communications, real time energy info, bill predictability,
rate assistance, personal attention)
12
Strengths, Weaknesses, Opportunities, Threats
Helpful Harmful
Strengths
Weaknesses
SWOT Analysis - Internal
Strengths
Nimble utility
Competitive rates
Dedicated employees
Load and resource diversity
Economy of scale with
NCPA
Local control
High reliability
Customer/public
accessibility
Customer satisfaction
Excellent safety record
Customer relationships
Weaknesses
Billing system limitations
Data/customer information
accessibility
Customer
communication/outreach
Decentralized offices
Financial stability
Complex rates
Succession plan
Grid intertie
Aging infrastructure
SWOT Analysis - External
Opportunities
Expanded joint action
Advanced technology
Economic development
Customer relationships
Debt restructure
Electric vehicles
Energy storage
Threats
Unfunded mandates
Changing business model
Increased power costs
Extreme weather
Cyber/physical threats
NERC/WECC
requirements
Workforce poaching
Interest rate exposure
Strategic Areas of Focus
Customer — LEU will develop and implement programs
and provide services to meet the needs of our customers.
Technology — LEU will deploy cost effective technology
to improve reliability, customer service, safety and
workforce efficiency.
Financial — LEU will operate in a manner that ensures
financial stability and customer value.
Reliability — LEU will design, operate, and maintain the
distribution system to ensure reliable electric service.
Workforce — LEU is committed to recruiting qualified staff
and providing necessary training and an environment
which promotes workforce loyalty.
16
Next steps..
Discovery
� - Development
Focus
1> Goals
Action Items
Accountability
Strategic Planning into the Future
Make the plan simple enough to become a part of
ongoing discussions that have strategic implications
Keep the plan relevant by periodically revisiting the
assumptions in the face of changes to the internal and
external environments
Make it a part of the culture
My Lodi Electric Bill Pays for What?
3
1296
1$9K
42 -
• Generation
• Distribution System
■ Transmission
▪ Employee Com
▪ PILOT
▪ Customer Frog rams
Customer Service
Fiscal2017 i Electric Utility Budget
$0A307
agill
$0.2000
$0.1800
$0.1600
$0.1400
$0.1200
$0.1000
$0.0800
$0.0600
$0.0400
$0.0200
r
Lodi Electric Cost ($) Per kWh
0.0049
0.0049
$0.016fi
$0.0204
$0.0213
Total $/ k h _ $0.1718
Fiscal Year 2017 Budget
• Customer Ser+ice
• Customer Programs
• PILOT
• Employee Costs
▪ Transmission
• Distribution System
• Generation
Bill Comparison
140.00
1.
100. Oa
$80.00
$ 40.00
Average Energy User
130.80
$93.08
Lodi PG&E
Inc ude5 vg sunmer/rrrirrter b i swtharges erd taxes !Utility User Tax for PG&E St €ton areal
Bill Comparison
$80.00
Low Energy User
$70. CO -
61,78
.60.00
511 $50.00
$40.00
3O_o
$20.00
$10.00
14.79
Lodi PG& E
Iriciudes a7rg srenm&r/moi Mir b L surt#haria ncl taxes MUtiIit Us-er Tax for PULE Stock -tor! areal,
Bill Comparison
$250,00
$ 200,00
15O.DO
SlCO_DD
50,00
High Energy User
1o8.8'
Lodi
$262,64
PG&E
Includes aaz su mer..wirit r bFII, surdharg sand tars RUtility User Tax far PG&E St €ton aria;'
1
0.9
0.8
D.7
D.6
0.4
0.3
0.2
0.1
0
Reliability Comparisons
Average Number of Outages Average Outage Time
per cuutomer} imirrufes per cti tomer)
■ Lodi
Electrk
• PG&E
(Stockton)
120
100
80
60
40
20
0
71
2014 2015 2016 2014 2015 2016
CM) (11-01)
■ Lodi
E Iewr iC
• PG&E
(Stockton)
A PUBLIC AGENCY AGENCY UPDATE - LODI
141 CPA APRIL 2017
NORTHERN CALIFORNIA POWER AGENCY
NCPA UPDATE
STRONG MEMBERS THROUGH JOINT ACTION
• NCPA was established in 1968
• NCPA works with members to position them competitively in today's electric markets
• Builds and operates jointly owned power plants and operates a power pool for members
• Represents members before legislative and regulatory bodies
• Provides Support Services (aggregated purchasing, joint workforce development training, technical support)
• Has 14 members and one associate member serving a population of over 650,000 in communities throughout
Northern California
• Has four additional project participants which are involved in the Lodi Energy Center
NCPA
Foster opportunities such as
new power plant projects
Comprehensive and
collaborative planning efforts
to prepare for market
uncertainties
Economies of scale
Market and industry expertise
Ongoing legislative and
regulatory efforts
A P'J41 If, AGFN.".Y
NCPA
NORTHERN CALIFORNIA POWER AGENCY
Members
Reliable retail service
Low-cost, diversified
generation portfolios
Investment in renewable
energy
Competitive rates and rate
flexibility
Access to high credit quality,
liquid power pool
2
NCPA UPDATE
MANAGEMENT IS EXPERIENCED, STAFF IS SPECIALIZED
• NCPA is managed by Randy Howard, General Manager.
Randy has been at NCPA for over two years and brings
over 39 years of valuable industry experience to NCPA
• NCPA is organized under four divisions —
Finance/Administrative Services, Power Management,
Legislative and Regulatory, and Generation Services, each
headed by experienced professionals with many years of
experience
• Agency has specialized staff in a number of technical areas
that assist members with needed technical expertise.
Committee structure promotes the sharing of expertise and
experience.
Ken Speer
37 years experience
Generation Services
Monty Hanks
21 years experience
Finance/Admin Services
Jane Cirrincione
30 years experience
Legislative & Regulatory
Dave Dockham
35 years experience
Power Management
S4"PA
NORTHERN CALIF D RNIA POWER AGENCY
Randy Howard
39 years experience
General Manager
1
3
NCPA UPDATE
To REDUCE COSTS AND EXPAND SERVICES - NCPA IS EXPANDING
• City of Shasta Lake has submitted a formal request to be a full member of NCPA, with emphasis on the
Legislative & Regulatory Affairs activities. Commission approved resolution recommending Membership.
• Merced Irrigation District is considering membership and has contracted for Power Management services
• Placer County Water Agency will start taking Power Management services later this year
• NCPA is expanding support services through joint activities with Southern California Public Power Agency
(SCPPA), including shared procurement, training and member working group activities. These joint support
services allow members access to either SCPPA or NCPA programs and leverages aggregated procurement
4
NCPA UPDATE
NCPA's POWER POOL PROVIDES SIGNIFICANT AND GROWING VALUE
• NCPA's Power Pool and Load -Following Metered Sub -System
Agreement (MSSA) with the California ISO provide protection for our
members from "peanut butter" costs of the ISO markets
— NCPA balances all loads/resources every 5 minutes for our MSSA
members from our 24/7 Dispatch Center
— NCPA also provides long-term resource portfolio planning for our
members and energy risk management services to mitigate power
trading risk
— Estimated annual value to our members in 2016 was $24.5 million
• Market Purchase Program was updated to expand the types of
products NCPA can transact on behalf of the participants
— Historically purchased energy, capacity, ancillary services and
transmission
— Added language to authorize NCPA to acquire GHG Compliance
Instruments on behalf of the participants to satisfy any GHG
compliance requirements
— Added language to provide for Renewable Energy Credit
purchasing & selling
• Natural Gas Purchase Program provides the ability to hedge gas
supply risks for our members
California l
Your Link to Power
5
A(IC
RN CAL ORNIA POWER AGENCY
Shared Effort and Costs for State and Federal
Legislative and Regulatory Affairs
State Legislative Issues:
Bills Introduced by
February 17th Deadline
By the Numbers
• Over 1600 Assembly Bills
• Over 800 Senate Bills
• NCPA is Currently Tracking 138 Bills
• Several Spot/Placeholder Bills
-491 await
RN CALIFORNIA POWER AGENCY
State Legislative Issues
lop Issues RA. NCF'M
• Regionalization
• 100% Renewables Portfolio Standard by 2045
• State's Climate Program Post 2020 (Governor's Priority in 2017)
• Options: Cap & Trade, Direct Regulation, or Hybrid Approach
• Lodi Benefits from Cap & Trade Free Allowance Program
• Public Charging Stations
• Plug -In Electric Vehicle Discount Program
• Procurement Mandates
• Rooftop Solar, Energy Storage, Energy Efficiency, Clean Peak Energy Standard
• Several Bills on Wildfires, Workforce Development, & Cyber Security
A(IC
NORTHERN CALIFORNIA POWER AGENCY
California's 2030 emissions target will determine the path toward 2050 goals
• CALIFORNIA'S PATH TO 2050 GOALS
500
400
N
0 300
c
oi-
,
(5'-
200
Tai
U �
100
Historic Emissions
Itiarde-
---
Industrial
Electric
Transportation
Res. & Comm
jin
Ag., Forestry, & Other
2020 Target Set by AB 32
♦
♦
♦
♦
♦
♦
2050 Goal Set by •
Executive Order
2000 2010 2020 2030 2040 2050
8
A(IC
NORTHERN CALIFORNIA POWER AGENCY
Electrification of Transportation Sector is a Growth Opportunity
Accelerated PEV Adoption Rate to 2050
C iiia �rr;i ;'s
Eif}y decgrbonize : r:, r; G 1 ter, :::11 5 ec t ir" by beginning ei a c t rf cdtic'rr now
By 20313, tra n sp ortatio n
must be nearly 1100%
de carlaciriized
More agig rets ire adoption
trajectory cverthe nett 15
years better positions
(aliifcirr7 iatci reach & rnillbn
wehislesin 2030 and
eventual!? achie!,ie
GHG redaction goal in 2050
• All casimmodeled are more
aggres.ide than CAR B's
Most Li k ely Corn pliarrce
en ariofc'r th e Z EV
Program
60
50
i
a
Light-duty PEV adaption 5cena ri GS to 2050
ISL High ilturiFpnglail
TEA "Tr lame M.ttf1 C u r rerrt Adecelro rti
TEA "1}w ti twetrr-
WA Aare Woe 0 141 rti
LINg. 6114 CSI4
,r ,KAI Mop r
•
1
1
1'
1 i
• OPP
f
412- t? enoe, tette
•
Caws asrdVY ere UMW- 1511LZ) .srp Gam,'-------hGa{s„b Araarr:r �Yrsa�s-uArran .%-a arr'----ail 1 a=1101 170 L..G aro T.m r-
et
9
NORTHERN IFORNI
IMPROVED TRANSMISSION COORDINATION
SCL
Western Interconnection
Balancing Authorities (38)
TPWR --
8ourrdur4a are upproxrmore
and for rlustratrve purposes only.
HGM A
GRMA
DEM
Diagram Source: Western Electricity Coordinating Council
Thirty eight Balancing
Authorities operate
autonomously in the
Western Interconnection
Theory of a west wide
EIM is that transmission
and generation
resources can be used
more efficiently when
shared across a larger
geographic area
A(IC
NORTHERN CALIFORNIA POWER AGENCY
EE Expenditures Continue to Increase
Public Power Total Annual Energy Efficiency Expenditures, FY2006-FY2015
1 $175,000,000
$150,000,000
$125,000,000
$100,000,000
$75,000,000
$50,000,000
$25,000,000
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
STRONG MEMBERS WITH STRONG CREDIT
NCPA MEMBERS MAINTAIN COMPETITIVE RATE ADVANTAGES
• NCPA's members have maintained competitive rates that are well below the rates of PG&E
- Member's residential customers average 32% below PG&E
Estimated January 2016 Average Rates (Cents / kWh)
Utility
Alameda
Biggs
Gridley
Rate
Schedule
D-1
A
Res
Healdsburg D1
Lodi (includes avg ECA) EA
Lompoc (D-1 @ 550 kWh/mo) D-1
Palo Alto E-1
Plumas-Sierra S100
Redding Res
Roseville Res
Santa Clara D-1
Truckee Donner P10
Ukiah El
Residential (1) % Below
PG&E
-22.5%
18.67
17.81
19.20
Rate
Schedule
A-1
-26.1% 01
-20.3% Cml
15.81 -34.4% C1
18.07 -25.0% G-1
17.31 -28.2% A-1
12.53 -48.0% E-2
19.26 -20.1% S200
17.01 -29.4% Sm C
15.25 -36.7% GS -1
11.66 -51.6% C-1
14.53 -39.7% R15
14.17 -41.2% E5
Commercial
(2)
18.00
19.29
19.19
% Below
PG&E
-23.4%
Rate
Schedule
A-3
-17.9% SW
-18.3%
P4S
1-1
A-13
E-7
14.87 -36.7%
17.73 -24.5%
21.31 -9.3%
13.65 -41.9%
19.52 -16.9%
Industrial (3)
14.52
12.75
12.96
13.16
13.20
15.11
10.75
% Below
PG&E
-6.8%
-18.2%
-16.8%
-15.5%
-15.3%
-3.0%
-31.0%
17.39 -25.9% Lg C 14.51 -6.9%
12.68 -46.0% GS -4 11.82 -24.1%
16.48 -29.8% CB -3 11.99 -23.0%
16.77 -28.6% R25 12.66 -18.7%
17.21 -26.7% E -Ind 9.30 -40.3%
Simple Average NCPA Rate
16.25 -32.6% 17.24 -26.6% 12.73 -18.3%
NCPA Avg as % PG&E Rate 67.4% 73.4% 81.7%
Pacific Gas & Electric (1/1/16) (4) E-1 24.10 A-1 23.48 E2OS 15.58
(1) Based on 750 kWh per month; where applicable, assumes non electric heat; averaged summer and winter energy rates. Includes applicable public benefits and state energy surcharges.
(2) Based on 3500 kWh/month consumption. Where applicable, averaged summer and winter rates; where applicable assumes a 55% load factor.
(3) Based on 2,000 kW load, 65% Toad factor. When 3 time periods, 15% consumed super -peak, 40% peak on shoulder, 45% off-peak; if two time periods, 55% consumed on -peak, 45% consumed off-
peak. Due to significant variation in size and number of industrial customers, comparisons between some members with PG&E may not be represented.
(4) From PG&E Rates and Tariffs website, rates from indicated rate schedule and calculated using same assumptions for usage as public agency rates and using average of PG&E baseline zones. A-1
rate estimated by non TOU with 60% summer and 40% winter consumption profile.
12
STRONG MEMBERS WITH STRONG CREDIT
NCPA MEMBERS HAVE Low EMISSIONS AND A GREEN PROFILE
• NCPA's members already obtain significant percentages of their power supply from renewable energy
resources and also obtain power from significant large hydro resources which help mitigate any
emissions considerations
Power Supply from Renewable Fuels 2015
— NCPA members are at 32% renewable percentage overall
100%
80%
60%
40%
20%
0%
CA -Eligible Large Hydro
Alameda Biggs Gridley Healdsburg Lodi Lompoc Palo Alto Port of Ukiah
Oakland
— NCPA continues to assess additional renewable and low emissions projects on behalf of tlib
participants
GEOTHERMAL PROJECT UPDATE
GEOTHERMAL PROJECT DESCRIPTIVE OVERVIEW
Descriptive Overview of Geothermal Project
Description
Location
Type
Fuel
Generation Capacity
Geothermal power plant
Geysers, CA, Sonoma & Lake County, near Middletown
Base load renewable energy
Geothermal steam
• Plant 1: 2 units at 110 MW nameplate — currently
producing 55 MW
• Plant 2: 1 unit at 55 MW nameplate — currently
producing 45 MW
Other Facilities • 67 production wells and ten injection wells
• 102 miles of underground well pipe
• Eight miles of steam gathering pipe
• Effluent Pipeline Project — 6,400 gpm
• Three pump stations, five miles of injection pipe,
horizontal injection well
First Year in Operation Plant 1: 1983; Plant 2: 1985
Highlights • Provides baseload, reliable, renewable energy
• Expected life extended well past life of debt
due to Effluent Pipeline Project and recent system
replacement and modernization
• Majority of debt now paid in full — small amount
remaining for recent system upgrades
• AB32 emission requirements do not apply
14
GEOTHERMAL PROJECT UPDATE
GEOTHERMAL PROJECT GENERATION PERFORMANCE
• YTD costs are under budget by $1.7 million or 5%; MWh output is 4% above expectations for the year; $/MWh is
$31.63 compared with anticipated budget of $39.75
Geothermal Project Generation Performance (in MWh)
15
800,000
700,000
600,000
•
•
•
•
,
500,000
•
•
•
•
•
•
•
••
•
•
•
•
•
400,000
300,000
0
, ♦
I
,
••
♦•
•
♦•
•
•
200,000
••
•
100,000
0
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
FY 16 Actual
70,191
140,674
202,291
275,379
347,517
421,609
494,671
560,117
630,066
677,679
749,346
818,243
- - - . FY 17 Planned
72,318
144,511
191,031
262,982
332,492
404,201
475,605
539,989
608,152
673,006
743,942
812,474
FY 17 Actual
69,241
139,802
208,486
280,623
350,665
422,514
493,144
15
GEOTHERMAL PROJECT UPDATE
GEOTHERMAL PROJECT PROJECTED OUTPUT
• Output from the Geothermal project is expected to gradually decline; however, improvements have extended the
life of the project and increased the projected output
Geothermal Project Historical and Projected Output (in Gross MWs)
250 Pv9''d' i
200 MW
2
0
0
d 150 MW
J
0
L
C19
R 100 MW
m
C4171
ev
50MW
0MW
Historical Projected -1995 Generation Forecast Without SEGEP
1.9% decline projected
lIIIlluIIIIllJIJI11JI1i1i!11
16
$12,180,000
GEOTHERMAL PROJECT UPDATE
GEOTHERMAL POWER IS VERY VALUABLE
Annual value is $46.1 million; versus cost of $33 million
$3,000,000
I•
o
$30,955,409
Annual Value
Energy REC Capacity
17
HYDROELECTRIC PROJECT UPDATE
HYDROELECTRIC PROJECT DESCRIPTIVE OVERVIEW
Descriptive Overview of Hydroelectric Project
Description
Location
Type
Fuel
Generation Capacity
Other Facilities
First Year in Operation
License
Highlights
Series of five Hydroelectric Generating Stations on the
North Fork of the Stanislaus River
Murphys, CA
Base load and peaking capacity
Water
• Collierville: 253 MW (2 @ 126.5 MW)
• Spicer: 6 MW (2 @ 2.75 MW, 1 @ 0.5 MW)
• Collierville: 40 miles of Transmission Line, 2,065 Acre
Feet of storage at McKays Reservoir
• Spicer: 189,000 Acre Feet of storage at Spicer
1990
Through 2032 with option to extend
• Offers firm, renewable, emission free source of
power to help stabilize other intermittent renewable
sources such as solar and wind, and integrate all
into a more effective resource mix
• Zero Carbon Energy Credit for entire output
• AB32 emission requirements do not apply
• 6 MWs of CEC Qualified Renewable Energy
18
HYDROELECTRIC PROJECT UPDATE
HYDROELECTRIC PROJECT GENERATION PERFORMANCE
• YTD costs (net) are under budget by $0.8 million or 2.5%; MWh output is 137% above expectations; $/MWh is
$119.64 (YTD) or $48.49 (forecast year end) as compared to anticipated budget of $290.29 (YTD) or $118.44
(annual)
Hydroelectric Project Generation Performance (in MWh)
19
900,000
800,000
700,000
600,000
500,000
400,000
300,000
200,000
100,000
0
o • o
4.
- -
_ 4. . ........ 0 - -..4.-....
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
May
Jun
17
10,910
22,350
32,210
44,970
54,440
65,950
104,200
154,190
222,570
305,818
393,901
437,781
FY Planned
12,676
28,667
44,047
58,599
69,461
91,796
176,896
259,973
398,950
551,071
721,320
885,279
Wet
Dry
18,574
41,592
66,527
78,750
84,000
87,598
91,693
105,353
130,546
179,718
185,948
193,288
FY 17 Actual
14,240
28,259
41,091
64,382
81,142
135,444
246,468
•
19
HYDROELECTRIC PROJECT UPDATE
CALIFORNIA DROUGHT UPDATE
• Current year snowpack conditions are near all time highs
NCPA
Watershed
250
200
150
100
50
0
250
200
150
100
50
0
250
200
150
100
50
0
California Snow Water Content. February 28, 2017, Percent of April 1 Average
Horth
Percent of Average for this Date: 161%
1982-1983 fmax)
Central
Percent of Average for this Date: 193%
1982-1983 [max)
68
2015-201
014-2015 fmin
Average
South
2015-2016
Percent of Average for this Date: 204%
1982-1983 {max}
Average_
1976-
14-3015 fmin
Dec
statewide Percent of April 1: 162%
Jan
Feb
Mar
Apr
May
Jun Jul
Statewide Percent of Average for Date: 186%
20
HYDROELECTRIC PROJECT UPDATE
CALIFORNIA DROUGHT UPDATE
• Current year precipitation is currently trending as the wettest on record
90
85
80
75
1;70
m
r
L' 65
O 60
'ii'"55
V
12 50
a`
45
40
', • 35
O
4.7
• 30
R
• 25
20
15
10
5
0
San Joaquin Precipitation: 5 -Station Index, February 28, 2017
CVT - Calaveras Big Trees
HTH - He[ch Hetchy
YSV - Yosemite Headquarters
// NFR - North Fork RS
' / HNT - Huntington Lake
Percent of Average for this Date: 221%
1982-1983 (wettest)
Current Da' y Precip: 80.7
1997-1998
77.4
•
65.2
Average (1961-2010)
40.8
2015-2016 Daily Precip40.0
2014-2015 Daily Precip
19.0
i F y 15.4
1976-1977(2nd driest & driest thru Aug)
Oct 1
Nov 1
Dec 1
Jan 1
Feb 1 Mar 1 Apr 1 May 1 Jun 1
Water Year (October 1 - September 30)
Jul 1
Aug 1
Sep 1
Oct 1
Total Water Year Precipitation
21
HYDROELECTRIC PROJECT UPDATE
CALIFORNIA RESERVOIR SITUATION
• Most reservoirs have had to release significant amounts of water to maintain storage for flood control. Most are
expected to fill by the end of the hydro runoff this year.
Reservoir Conditions
CURRENT RESERVOIR CONDITION.
2M■
0000
1100
Trinity Lake
78% I 106%
3—
•
Lake Shasta
85%I 117 %
3531
3M0
2■■1 •
1000
Lake O ovil e
75%1108%
New Melones Lake
65%I 107%
2005
a
San Lets Reservoir
97%I 114%
Ending At Midnight - February 27. 2017
en{
■ -
Folsom Lake
44% 180%
70210
Don Pedro Reservoir r■n
} 88°5 1 138%
■
Lake McClure
81%1 175%
saa
Millorton Lake
82% I 1261•..
510
Lake Perris
44% 1 52%
0 Int
Castaic Lake
93% 1 107%
Pine Flat Reservoir
78% 1 147%
Graph UprIaled 0212812017 08:45 AM
LODI ENERGY CENTER PROJECT UPDATE
LODI ENERGY CENTER PROJECT DESCRIPTIVE OVERVIEW
Descriptive Overview of Lodi Energy Center Project
Description
Location
Type
Fuel
Generation Capacity
Average Heat Rate
Other Facilities
First Year in Operation
Highlights
Combined Cycle
Next to Interstate 5 near Lodi, CA
Base load and peaking capacity
Natural Gas
304 MW rating
6,824
2.7 miles of Gas Transmission Line
2012
• Offers state of the art "fast start" technology
• Facilitates integration of California renewables
• Most efficient heat rate in northern California
• Low emissions; net carbon reducing (20 — 70%)
• Ideal location; partnership with City of Lodi; proximity to
participants facilitates low transmission costs and
increased reliability
23
LODI ENERGY CENTER PROJECT UPDATE
LODI ENERGY CENTER PROJECT GENERATION PERFORMANCE
• YTD costs are well under budget ($20.3 million) primarily due to lower fuel costs as a result of lower operations;
MWh output is at 21 % of expectations YTD due to a PG&E gas transportation rate changes that went into effect
8/1/16; $/MWh is $145.39 compared with anticipated budget of $87.58
Lodi Energy Center Project Generation Performance (in MWh)
1,500,000
1,000,000
L
C�
C
500,000
0
FY16 Actual
— FY17 Planned
— FY17 Actual
Jul Aug Sep Oct Nov
103$85 241,149 372,757 538,495 613,726
169,527 320,511 453,335 643,096 784,686
76,008 107,662 133,260 153,895 171,383
Dec Jan Feb Mar Apr May Jun
74.5,507 842,738 869,899 961,476 1,006,911 1,010,334 1,076,929
953,525 1,125,339 1,299,662 1,428,210 1,570,010 1,578,736 1,605,494
199,801 238,718
24