Pay-As-You-Go Final 2012 Report

Agenda PAYG Refresher Pilot Goals & Overview Voice of the Customer Front Office Impacts Back Office Impacts Financial Results Going Forward 2

Why Pay-As-You-Go? Customer Benefits Include: No deposit, late fees, or reconnect/disconnect fees. Give customers more control over their budget. Improved satisfaction through increased convenience, flexibility, and control. Ability to pay off past-due balances while keeping the lights on. Company Benefits Include: O&M savings. Bad debt recovery. Increased peak load reduction. Increased customer goodwill towards company.

Pilot Structure Recruitment via Call Center and Marketing Anyone except critical care or those who owe more than $500 Pay for electricity in advance of usage & opt out at any time Start with $25, then choose how much and how frequently to pay, using any OG&E method No deposit, late fees, or disconnect/reconnect fees No printed monthly statements Option to receive text, , or phone notifications Access to myUsage.com to edit notifications & view payments

Pilot Goals Customers – Satisfaction Operational Efficiency – Call Center – Back Office Load Impact – Demand Response

$ 0 $ $ $ Midnight Noon Midnight TOU Standard Rate Options

Program & Recruitment Overview Marketing & Official Enrollment: 3/5/12 Enrollment Complete: 6/12/12 Recruitment Goal: 720 Participants Actual Enrollment: 587 Pay-As-You-Go Pilot Enrollment RateGroupGoal Actual Enrollment Current Enrollment StandardBudget StandardConvenience TOUBudget TOUConvenience TOTAL: Actual enrollment numbers as of June 12th, Current enrollment numbers as of October 1 st, 2012.

Program Statistics Active customers utilizing MyUsage: 413 Average payment amount: $41.37 Debt Recovery: –Program started with $41, in debt recovery – Additional $3, debt created during program –$16, has been recovered – % reduction in debt recovery Notifications: –49,240 texts notifications to date – 4,293 outbound call notifications to date As of October 1, 2012

Front Office Impact Required headcount was higher than the control groups in the first three months but significantly decreased in months 4-7, indicating potential long-term savings. 9

Disconnect Activity Group Number of Customers Total Number Disconnected Percent Disconnected at Least Once Average Disconnects per Customer Average Number of Hours Disconnected per Customer Average Disconnect Duration Convenience – Participant % Convenience – Control % Budget Move In – Participant % Budget Move In – Control % Budget Installment Plan – Participant % Budget Installment Plan – Control % Customers on pilot had more total time disconnected than the control group. They also had more disconnects, but those disconnects were much shorter in duration. While a small part of the savings that budget customers realized were the result of having zero energy use during disconnects, 94% of the savings resulted from behavioral changes.

Load Impacts Group Baseline (energy) Reduction (energy) Percent Reduction Estimated Demand at time of System Peak (kW) Budget Move In % Budget Installment Plan % Estimated Total Energy for the Summer (kWh) Budget Move In 5, % Budget Installment Plan 5, % Group Baseline (energy) Reduction (energy) Percent Reduction Estimated Demand at time of System Peak (kW) Budget Move In % Budget Installment Plan % Estimated Total Energy for the Summer (kWh) Budget Move In 6,1291,14419% Budget Installment Plan 5, % Budget participants show significant on- peak energy savings. Budget TOU customers showed the largest reduction at system peak, lowering demand by 0.75 kW. Convenience customers’ usage suggested minor savings but the findings were not statistically significant.

Financial Overview Benefits to rate payers: – Avoided generation costs – Bad debt reduction Program started with $46,143 in debt recovery; $32,297 has been recovered (70%) – Paperless billing cost reduction – Peak demand reduction (0.5 KW per customer) – Call center labor costs Shareholder impacts: – The pilot does impact shareholders by reducing KWH sales until the next rate case – O&M cost reductions until the next rate case – Increased customer satisfaction & participation in other programs Cost drivers: Internal and External IT costs Marketing costs Benefit to cost ratio is 4.19 (TRC value)

13 Pilot participants were asked what one word they would use to describe prepaid electric service. Their answers are captured in the visual representation above. The larger the word, the more frequently it was mentioned. Customer Feedback

Next Steps An estimate for the resources needed to refine the Business Case to +/-25% of actual cost is being prepared 190 current customers are being kept on plan for the time being while options are being evaluated (as of December 2 nd, 2013)

Enrollment Recruitment GoalsCurrent Enrollment