Improving Customer Service at BTU Through Benchmarking APPA National Conference Anaheim, California - June 20, 2005

Topics  Business Process  Customer Service Goals  Measuring Goals  Using Benchmarking  Sample Benchmarking for BTU  What Did They Tell Us  Changes We Have Made  Going Forward

Business Process  Set Goals  Measure Progress  Compare to Goals

Customer Service Goals  Customer Satisfaction  Timeliness on answering calls  Cost Control  Process Reduce Inaccurate Bills Meter Reading Accuracy Reduce Write-Offs

Measurement of Customer Service Goals  Some are Straight Forward – Cost  Some are Rather Subjective – Satisfaction  Comparisons With Others is Time Consuming

Benchmarking Does All The Measurement  Compares Costs with Other Utilities  Shows Policies Which Affect Costs  Gives Statistical Data – Ex. Time of Calls  Best Practices

Key Benchmarks  Overall Scorecard  Meter Readings  Billing  Credit & Collections  Field Service  Call Center  Payment Services  Internet  CIS

© PA Consulting Group 2004 CS Results - 8 Overall Scorecard COSTMedian1st QN=Median1st Q *Customer Service Exp Per Adj Customer$42.65$ $46.03$36.67 *Customer Service Exp (Ex Sppt Proc) Per Adj Customer$36.66$ $40.80$32.73 *Customer Service Exp (Excluding Uncollectibles) Per Adj Customer$36.24$ $46.03$32.91 *Customer Service Exp (Ex Uncoll & Sppt Proc) Per Adj Customer$31.78$ $33.09$27.12 Total Call Ctr Exp Per Adj Customer$7.55$3.8024$8.30$6.20 Total Meter Reading Exp Per Adj Customers$6.90$5.7022$7.48$5.06 Total Field Service Exp Per Adj Customers$5.24$2.3916$4.75$2.76 Total Billing Exp Per Adj Customers$7.42$6.0421$5.66$4.66 Payment Processing Exp Per Adj Customers$2.58$1.1821$0.94$0.66 Total Credit Exp (Including Uncollectibles) Per Adj Customer$8.29$4.9319$9.88$6.87 Uncollectible Exp Per Adj Customer$3.85$2.3322$7.19$3.95 CS Support Exp Per Adj Customers$2.35$1.599$1.11$0.36 SERVICE LEVELS % of Calls Answered by CSRs Within 30 Seconds80.0%85.0%1874.0%79.4% % of Calls Abandoned Including Major Events5.50%4.08%213.85%3.00% Overall Meter Reading Inaccuracy0.150%0.085% %0.025% Missed Manual Meter Reads0.680%0.200% %0.296% AMR Missed Meter Reads0.460%0.148%90.590%0.140% Bill Inaccuracy-% Bills Adj. After Mailing To Customer0.66%0.06%190.37%0.20% SAFETY *Lost Time Incident Rate - All CS *OSHA Recordable Incident Rate - All CS *Vehicular Accident Rate per 1,000,000 Miles - All CS * These measures are included in your total score and in your process score APPA CSIOUCS

© PA Consulting Group 2004 CS Results - 9 Staffing Levels and Outsourcing Company Only FTEs per 100,000 Adjusted Customers Report Page #64 ( ) Calc: E.1/((SUM{A.2}+SUM{A.3}+SUM{A.4}+(SUM{A.5}+SUM{A.6}+SUM{A.7})*2+SUM{A.8}*3)/100000)

© PA Consulting Group 2004 CS Results - 10 Meter Activity Scorecard COSTMedian1st QN=Median1st Q *Total Meter Reading Exp Per Adj Customers$6.90$5.7022$7.48$5.06 *Total Meter Reading Exp Per Total Meter Reads$0.56$0.4722$0.67$0.44 (Manual, R/SC AMR-Billing Read, & Interval) SERVICE LEVELS *Estimated R/SC Reads As a % of R/SC Reads0.027%0.000% %0.075% *Overall Meter Reading Inaccuracy0.150%0.085% %0.025% *Manual Meter Reading Inaccuracy0.167%0.078% %0.023% *Missed Manual Meter Reads0.680%0.200% %0.296% AMR Reading Inaccuracy0.100%0.067%80.010%0.003% *AMR Missed Meter Reads0.460%0.148%90.590%0.140% *R/SC AMR Meters % of Total Meters1.001%12.174% %42.366% SAFETY *Lost Time Incident Rate Meter Reading *OSHA Recordable Incident Rate Meter Reading *Vehicular Accident Rate per 1,000,000 Miles-Meter Reading * These measures are included in your total score and in your process score R/SC = Residential/Small Commercial; C/I = Commercial/Industrial APPA CSIOUCS

© PA Consulting Group 2004 CS Results - 11 Total Meter Reading Expense (Including Pensions & Benefits) Per Adjusted Customers Page #172.1 ( ) Source: B.3/(A.2+A.3+A.4+(A.5+A.6+A.7)*2+A.8*3)I.9.2 MeanQuartile 1Quartile 2Quartile 3 $8.54$6.35$7.00$10.58 MeanQuartile 1Quartile 2Quartile 3 $8.54$6.35$7.00$10.58

© PA Consulting Group 2004 CS Results - 12 Total Meter Reading Expense Per Meter Read Page #170 (145) Source: (B.3)/(M.3+M.20+M.21+M.22+M.16) MeanQuartile 1Quartile 2Quartile 3 $0.61$0.47$0.56$0.70 MeanQuartile 1Quartile 2Quartile 3 $0.61$0.47$0.56$0.70

© PA Consulting Group 2004 CS Results - 13 Meter Density — Electric Meters per Square Mile of Service Territory Page #180 (174) Source: (M.2.1+M.17)/(A.15.1) MeanQuartile 1Quartile 2Quartile , MeanQuartile 1Quartile 2Quartile ,

© PA Consulting Group 2004 CS Results - 14 Total Billing Expense Per Bill Issued MeanQuartile 1Quartile 2Quartile 3 $1.03$0.73$0.98$1.16 MeanQuartile 1Quartile 2Quartile 3 $1.03$0.73$0.98$1.16 Page #256 (198) Source: B.7/O.1

© PA Consulting Group 2004 CS Results - 15 Uncollectibles per Revenue The difference in performance between companies is substantial, and not entirely explained by gas vs electric, or other characteristics of the companies. MeanQuartile 1Quartile 2Quartile %0.08%0.17%0.41% MeanQuartile 1Quartile 2Quartile %0.18%0.30%0.45% Water Electric Page #323 (80551) Source: B.17.1/A.12 Page #325 (50230) Source: B.17.3/A.14

© PA Consulting Group 2004 CS Results - 16 Cost Optimization Framework - Credit & Collections Annual Cost Collection Activity (e.g. 24 hour notices/yr) C = Cost of Collection A = Cost of Write-offs D= A + B+ C = Total Credit Cost Current Level of Activity Minimum Cost There is a trade-off between the cost of collection and the value of reduced write-offs and interest on DSO The cost of collection plus the cost of write-off and interest on DSO equals “total credit cost" The "total credit cost" is "U" shaped -- meaning there is a minimum cost point There is a trade-off between the cost of collection and the value of reduced write-offs and interest on DSO The cost of collection plus the cost of write-off and interest on DSO equals “total credit cost" The "total credit cost" is "U" shaped -- meaning there is a minimum cost point $40M $20M $10M $11M B = Interest on DSO 2M 1.8M 3M4M1.0M Note: Not to Scale

© PA Consulting Group 2004 CS Results - 17 Field Service Orders per Customer Page #233 (8043) Source: N.1/(A.2+A.3+A.4+A.5+A.6+A.7+A.8) MeanQuartile 1Quartile 2Quartile MeanQuartile 1Quartile 2Quartile

© PA Consulting Group 2004 CS Results - 18 Percent of Calls Answered by Call Center Representatives Within 30 Seconds Page #120 (7446) Source: I.3.1+I.3.2 MeanQuartile 1Quartile 2Quartile %85.0%80.0%58.0% MeanQuartile 1Quartile 2Quartile %85.0%80.0%58.0%

© PA Consulting Group 2004 CS Results - 19 Website Transactions Completed On Your Site Page #52 (91831) Source: D.1 Payment and View Bill make up the greatest percentages of completed web transactions

© PA Consulting Group 2004 CS Results - 20 Workforce Management Software Provides Real-Time Reporting of Information  Page #166 (2856) Source: L.8

© PA Consulting Group 2004 CS Results - 21 Customer Payment Methods Methods of Receiving Payments Page #286 (315) Source: P.2 More than 30% of payments are collected outside of the mail system

© PA Consulting Group 2004 CS Results - 22 Best Practices Telephone Center Days from hire to first call 24 hr/7 Day a Week Training - Ongoing Variable staffing Training - New Employees Monitoring Internet Services WFMS Calls per CSR Empowerment Incentives - Support Call Monitoring Central/Virtually Connected ACD-Features CTI features Incentives - CSR IVR/VRU - Segmentation Reading Data From the ACD Overflow Contracting IVR/VRU Customer Options Business call center IVR/VRU - Completed Calls Limit Overtime Generalized Reps Call Monitoring Software CIS Contracting Integrated Systems CIS - Features Adding Modules Deregulation-Features Field Service COA-Meters Left on-Electric Incentives-FSR COA-Meters Left on-Gas Mobile Computers Days wait to match COA Appointments Meter Reading Outsourcing % Van Drive By AMR Programs Limit Estimating-Res'l Monthly Reading - Res'l Employee Incentives % Remote Reads % Check Reads Billing Minimize Estimating In-house Print & Mail One System Electronic Bill Presentation Read to Bill Cycle Monthly Cycle Many Billing Options Payment Processing In-house Payment Proc Electronic Payment Methods Imaging Technology Local Offices Close offices On line processing Adding pay agents/stations Few pay agents/stations Credit and Collections Deposits - Write-off Disconnect Rate Offer payment agreements No Field Collections Deposits - Initiation Outbound calling Timely disconnection Late Payment Fees Credit Scoring Follow disconnect policy

What Did They Tell BTU ? Ring, RING, RING  Our Overall Costs are Low  We Do Not Use Technology as Much as Others  Answering of Calls Needs Improvement

What Changes Have We Made ?  Replacing our Phone System  IVR Completed Calls  Change Call Center Process  Replace CIS System  Created Formalized Call Center Training  Outsource Some Field Work During Peak Periods  Use More Days for Read and Leave  Considering Eliminating Field Collections  Look at AMR for Hard to Read  Track Payment Process Better

How Do We Plan To Go Forward ?