2016 Benchmarking Insights Conference Boulder, CO Meter Reading 2016 Benchmarking Insights Conference Boulder, CO This material has been optimized for the Insights Conference audience. To get the most of this material and hear a recording of this presentation go to our http://1stquartileconsulting.com/benchmarking/customer_service_b/csdocs.html and find the table for CS Insights, then click on the ”Meter Reading” link.

Agenda Overview Coverage of the Study for Meter Reading Process Model for Bill For Service 2016 Key Findings/ Points of Emphasis Performance Profiles Cost/ Service 2016 Benchmarking Results Functional-specific findings (Cost, Volume, Practices) Areas of Focus and Opportunity

Overview

2016 CS Benchmark Questionnaire structure Field Service Change of Account Billing Field Orders (meter investigations) Credit Field Orders Order Management Customer Contact Contact Center Local Office Self Service Contractors Credit Inbound calls Revenue Management Credit Office and Outbound calls Credit Field and Inbound Contact Policies Revenue Protection: Office and Field Back Office Billing Billing Field Policies Payment Processing Meter Reading Manual Mobile AMR Fixed Network AMI CS Support and CS IT Employees: Safety, Staffing Customer: Customer Satisfaction, First Contact Resolution, Customer Experience, Key Account Management, Energy Efficiency , Outage Communications Areas excluded: Meter Change-out

Bill for service Determine Rate And Create Account In Customer System Read Meter Process Meter Read Create Bill Ensure Accuracy And Send Bill

Key Findings / Points Of Emphasis Volume Automation levels (in the panel) decreased (1Q levels still above 67%) Cost Automated reads are 82% less expensive than manual reads Service Over 98% of meters are read

Performance Profiles

Cost comparison Total 2015 CS Cost Excluding Write-offs Meter Reading Community Mean = $7.33 Community Composite Community Composite Costs are per Accounts * Commodity

Meter Reading – Performance Profile Change in automation demographics in the panel increased costs and reduced read rates 2015YE 2014YE   Mean Q1 Q2 Q3 Bars Cost Meter Reading Cost Per Account * Commodity $7.78 $6.01 $8.46 $9.91 30 $6.02 $3.41 $6.19 $8.51 17 Meter Reading Cost Per Read $0.80 $0.55 $1.10 $0.29 $0.68 16 Meter Reading Cost Per Meter $7.72 $6.05 $8.62 $9.77 $5.69 $3.45 $6.52 $7.63 Meter Reading: Manual Cost per Read $2.84 $0.70 $0.88 $1.24 19 $3.49 $0.63 $0.78 $1.11 10 Meter Reading: AMI 2-Way Fixed Network Cost per AMI 2-Way Fixed Network Read $0.49 $0.08 $0.71 4 $0.94 $0.06 $0.20 $1.09 24 Internal Measures Meter Reading Errors (Percent of Reads): Manual 0.097% 0.055% 0.068% 0.125% 22 0.201% 0.096% 0.126% 0.260% 11 Actual year-end read-rate percentage (actual meter reading) - Manual 89.6% 97.5% 94.2% 83.4% 28 95.8% 98.7% 97.3% 94.0% 14 Actual year-end read-rate percentage (actual meter reading) - AMI 1 & 2 93.2% 99.0% 97.7% 89.1% 23 98.8% 99.5% 99.3% 98.9% Manual Reads Per Reader Per Day 286 389 288 234 254 364 266 132 12 Demographics Meters on your system read by AMR 1-way or AMI 2-way 30.0% 67.0% 0.7% 0.0% 32 39.4% 67.8% 18.0% Reads per Meter per Year 9 Electric Meter Density: Meters per Square Mile 402 514 169 71 31 444 536 401 68 15 Gas Meter Density: Meters per Square Mile 593 849 675 348 8 548 829 509 342 Meter Reading FTEs per 100,000 Accounts * Commodity 15.46 4.15 11.95 28.30 26 7.44 4.54 5.74 10.62

METER READING Spending 29% increase in the mean Cost per Acct * Commodity 2015 material Mean $7.78 Quartile 1 $6.01 Quartile 2: $8.46 Quartile 3: $9.91 The big movement in quartiles is due to change in panel (technology use) MR Page 3 - FL5

2016 Benchmarking Results

METER READING COST & STAFFING Technology is the main differentiator in costs Cost per Acct * Commodity Mean $7.78 Quartile 1 $6.01 Quartile 2: $8.46 Quartile 3: $9.91 Larger % of the panel reading meters manually MR Page 3 - FL5

METER READING COST PER METER 13% increase in the mean Cost per Meter This indicator is valuable Meter population remains consistent annually Methods of obtaining reads is the cost driver Mean $7.72 Quartile 1 $6.05 Quartile 2: $8.62 Quartile 3: $9.77 MR Page 8 – FL5 / MR5

METERS ON YOUR SYSTEM READ BY AMR OR AMI (all commodities) 9 companies with greater than 80% automation Method Of Obtaining Reads 12 companies 50% or greater 8 companies at 5% or less MR Page 13 – MR5

METER READING METHOD: ELECTRIC Method of Obtaining Reads 35% of the community is greater than 50% automated Last year the panel had greater than 50% of the companies reading greater than 50% of their meters with automation MR Page 11 – MR5

METER READING METHOD: GAS 60% of our companies are reading gas meters with automation MR Page 12 – MR5

METER READING cost BY TYPE AMI 1 & 2 Way Companies Manual / AMR Companies Mean $6.17 Quartile 1 $2.86 Quartile 2 $7.15 Quartile 3 $9.19 Mean $9.51 Quartile 1 $9.26 Quartile 2 $9.35 Quartile 3 $9.63 MR Page 5 - FL5 MR Page 5 - FL5

Meter Reading Target vs goal Manual Meter Reading goals are being achieved for manually read meters Manual Electric Read Goal Manual Electric Read Rate Mean 89.7 % Quartile 1 98.0 % Quartile 2: 94.0 % Quartile 3: 79.5 % Mean 89.61 % Quartile 1 97.54 % Quartile 2: 94.20 % Quartile 3: 83.36 % MR Page 25 – MR40 MR 29 – MR45

Location Of Meters – Electric / Gas Electric = 85% outside Gas = 55% outside MR Page 32 – MR100 MR Page 33 – MR100

Manual Meters read per reader per day 1st Quartile reads 40% more meters / day than 3rd Quartile Manual Reads Per Reader Per Day Reading meters manually will result in errors. Even those with automation still have manual reads Mean 286 Quartile 1 389 Quartile 2: 287 Quartile 3: 233 = Automation Deployed MR Page 18 – MR10

Tracking Meter Reading Errors Most companies track errors within Meter Reading MR Page 23 – MR15 MR Page 22– MR15

METER READING ERRORS (PERCENT OF READS): MANUAL Who is initiating check read orders? Company 74% Customer 26% Meter Reading Error Rate (% of meters) Billing Order Per Acct * Commodity Mean 0.093 % Quartile 1 0.053 % Quartile 2: 0.067 % Quartile 3: 0.113 % MR Page 19 – MR20 / MR10 FS Page 38 – FS35

METER READING ERRORS (PERCENT OF READS): MANUAL Result of check read order? 43% MR Error, 45% No Problem Found Meter Reading Error Rate (% of meters) Field Investigations Resulting in Meter Reading Error Mean 0.093 % Quartile 1 0.053 % Quartile 2: 0.067 % Quartile 3: 0.113 % MR Page 19 – MR20 / MR10

Meter Reading Target vs goal Automated 3rd Quartile automated performance is 89% versus 83% for 3rd Q performance for manual companies Automated Electric Read Goal Automated Electric Read Rate Mean 93.22 % Quartile 1 99.01 % Quartile 2: 97.73 % Quartile 3: 89.07 % Mean 91.7 % Quartile 1 99.1 % Quartile 2: 94.0 % Quartile 3: 87.5 % MR Page 27 – MR40 MR 29 – MR45

Collecting Data through automation 93% of respondents have a RF Mesh network 15 minute intervals are the standard to collect data and it performs as intended at a high rate % Of AMR/AMI Interval Reads Collected MR Page 39 – MR120 Mean 99.33 % Quartile 1 99.61 % Quartile 2: 99.41 % Quartile 3: 98.84 % MR Page 29 – MR45

When action is taken (Automated meters) When to take action and what’s the first action taken is varied amongst the community. # of Missed Intervals Mean 22 Quartile 1 1 Quartile 2: 3 Quartile 3: 37 MR 53 – MR155 MR 52 – MR150

Manual Meters Read by fully deployed AMI companies Converting 100% of meters is a stretch goal not easily attained % Of Manual Meters On System Mean 13% Quartile 1 1.1% Quartile 2: 2.2% Quartile 3: 10.1% Customers opt out Signal issues MR Page 44– MR130

TECHNOLOGY USED OR CONSIDERED FOR ACCESS PROBLEMS OR HARD TO READ METERS Companies without automation are looking for technology to solve access issues. Automated companies are looking to more advanced technologies MR Page 36 – MR110

Areas of Focus & Opportunity

areas of Focus and Opportunity Volume Meter Reading Errors (MR20) How many meter reading errors were found last year including all meter types? Cost Billing Labor and Field Service Labor (FL5) – Errors in Meter Reading are a cost driver down the process. Service On cycle read rate (MR45) – Accurately reading meters on schedule is the sole purpose of the organization, it is why you exist.

Thank You for Your Input and Participation! Your Presenters Ken Buckstaff Ken.Buckstaff@1QConsulting.com 310-922-0783 Debi Cook Debi.Cook@1QConsulting.com 760-272-7277 Gene Dimitrov Gene.Dimitrov@1QConsulting.com 301-535-0590 Rob Earle Rob.Earle@1QConsulting.com 315-944-7610 About 1QC First Quartile Consulting is a utility-focused consultancy providing a full range of consulting services including continuous process improvement, change management, benchmarking and more. You can count on a proven process that assesses and optimizes your resources, processes, leadership management and technology to align your business needs with your customer’s needs. Visit us at www.1stquartileconsulting.com | Follow our updates on LinkedIn