Non-Pay Service Disconnections and Outreach Efforts

Presentation to the LIOBJanuary 26, 2010

San José, CA

DRAFT

2

Non-Pay Disconnects

Total % Total % Total %Jan 1,137,916 12,060 7,681 64% 4,355 2,991 69% 7,705 4,690 61%Feb 1,145,358 15,197 9,655 64% 5,106 3,629 71% 10,091 6,026 60%Mar 1,159,954 26,352 16,081 61% 8,531 5,516 65% 17,821 10,565 59%Apr 1,176,257 29,363 19,751 67% 10,320 7,441 72% 19,043 12,310 65%May 1,191,719 33,158 23,594 71% 11,732 8,943 76% 21,426 14,651 68%Jun 1,207,722 28,331 19,354 68% 10,474 7,513 72% 17,857 11,841 66%Jul 1,223,447 35,641 24,296 68% 12,825 9,282 72% 22,816 15,014 66%

Aug 1,245,640 29,331 20,171 69% 11,236 8,091 72% 18,095 12,080 67%Sep 1,272,837 33,243 23,163 70% 12,515 9,381 75% 20,728 13,782 66%Oct 1,297,145 14,985 13,284 89% 6,087 5,354 88% 8,898 7,930 89%Nov 1,320,082 9,835 7,932 81% 4,201 3,329 79% 5,634 4,603 82%Dec 1,351,415 4,720 4,101 87% 2,141 1,811 85% 2,579 2,290 89%

Non-Pay Disconnects

Total CARE Customers

*Represents reestablishment of service under the same customer of record/accountCustomers disconnected for non-payment may be subject to an account securitization deposit. The deposit would be assessed on those who currently do not have a deposit at two times the average bill. The deposit is billed on the customer's subsequent bill and, upon request, can be paid over a three month period. PG&E began a temporary suspension of requesting this deposit December 16, 2009 and will continue to do so through the March 31, 2011.

2009

Total Residential CARE Non-CAREService

Reconnections*Service

Reconnections*Service

Reconnections*Non-Pay Disconnects

Non-Pay Disconnects

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Non-Pay Disconnects

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

-

5,000

10,000

15,000

20,000

25,000

Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09

CARE Non-Pay Disconnects Non-CARE Non-Pay Disconnects CARE Reconnect % Non-CARE %

New Customer-Centric Policies and Procedures

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• Implemented a disconnect moratorium from December 15, 2009 to January 4, 2010 for residential and small commercial customers

• Waiving deposit where applicable for residential and small commercial customers if customers enroll in Automatic Payment Service (APS)

• Temporary suspension of deposit request after service disconnection for non-payment through Q1, 2011

• Second chance payment arrangement opportunity for residential and small commercial customers with previously broken pay plans

• Relief for Energy Assistance and through Community Help (REACH) and Temporary Assistance to Needy Families (TANF) pilot with Alameda County beginning January 4, 2010

Enhanced Direct Customer Communication and Education

5

We have expanded beyond our traditional outreach

• New pay plan reminder call three days prior to payment due date• Ability to connect live with customer service representative

• New outbound call to customer at time of 48-hour notice• Ability to connect live with customer service representative

• Final contact by outbound call to customer prior to service

disconnection• New ability to connect live with customer service

representative and establish a payment arrangement

• New direct mail campaign communicating customer and financial assistance programs to customers receiving 48-hour notice

• “Breathe Easy Solutions™” brochure now includes payment arrangement information and is being inserted with late notices

• Delinquency notices contains additional customer assistance information

Collection Cycle Touch Points

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• Although PG&E tariffs allow customers to be considered past due 19 days after the bill is mailed, based on current practice, PG&E does not send a delinquency notice until 42 days after the bill is mailed. Total number of days from the bill mailing to when an order is issued for service disconnection is approximately 70 days.

• Customers can request a payment arrangement from the time the bill is generated to before an order is issued for shut-off of service.

• Now customers with a payment arrangement longer than 7-days will be provided a reminder call 3 days prior to the schedule payment date.

• Now customers with two or more broken payment arrangements within the last six-months will be eligible for a 2nd Chance Payment Arrangement.

Collection Timeline and Touch Points

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Added customer touch points in collection follow up cycle

Delinquency notification process

1. 15-day notice

2. 48-hour notice• Outbound call generated informing customer of the

availability of payment arrangements and other assistance programs with an option to speak to a customer service representative.

• Breathe Easy SolutionsTM brochure will be inserted within the notice beginning mid-January. Until then, customer will receive a Breathe Easy SolutionsTM letter.

3. Outbound call • Call will have prompt to request a payment arrangement or

to speak with a customer service representative.

4. Order issued for shut-off of service• Through March 2011, deposits will not be requested at time

of service restoration after they had been previously disconnected for non-payment.

Collection Timeline and Touch Points

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Additional sensitivity in treatment of medical / life support customersDelinquency notification process

1. 15-day notice

2. 48-hour notice • Outbound call generated informing customer of the

availability of payment arrangements and other assistance programs with an option to speak to a customer service representative.

• Breathe Easy SolutionsTM brochure will be inserted within the notice beginning mid-January. Until then, customer will receive a Breathe Easy SolutionsTM letter.

3. Outbound call• Phone attempt and/or 15-day warning letter to customer. • Certified Letter, notifying customer of date of service

disconnection.• Phone attempt and/or letter from PG&E Customer Relations

for final pay plan. 4. Order issued for shut-off of service

Enhanced Outreach and Customer Assistance

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MediaWinter Gas Savings Program advertisingProactive media outreach to raise awareness of programs

40+ news articles to dateAdditional outreach, including press release scheduled for January to communicate financial assistance programsAiring targeted television advertisements for CARE program

Online Placed prominent new banners on pge.com to direct customers to information on financial assistance optionsLeveraged social media channels (PGE4ME on Twitter) to reach out to customers

Messages “retweeted” by stakeholder groups like State of California, City of San Carlos, Alameda County, City of Fresno and City of Roseville

Google key word search optimization

Community OutreachOutreach to businesses announcing workforce reductions

Cumulative ImpactOutreach efforts have resulted in significant participation in customer assistance programs, including a record high number of payment arrangements.

Number of customers eligible for disconnection has declined significantly.

PG&E Eligible Disconnections vs. Actual Disconnections

-

20,000

40,000

60,000

80,000

100,000

120,000

140,000

Jan-

08

Feb

-08

Mar

-08

Apr

-08

May

-08

Jun-

08

Jul-0

8

Aug

-08

Sep

-08

Oct

-08

Nov

-08

Dec

-08

Jan-

09

Feb

-09

Mar

-09

Apr

-09

May

-09

Jun-

09

Jul-0

9

Aug

-09

Sep

-09

Oct

-09

Nov

-09

Dec

-09

Disconnections Eligible Avg Active Payment Arrangements

Eligible

Disconnections

Payment Arrangements*

* Active payment arrangements increased from 103K on Dec 16th to 108K on Dec 31st.

Appendix

12

Breathe Easy Solutions™

13

Breathe Easy Solutions™

14

Breathe Easy Solutions™

PG&E.com

NoticesPrevious New

NoticesPrevious New

18

January Winter Gas Savings Bill Insert

19

January Energy Partners Insert

Customer Assistance Programs

California Alternate Rates for Energy (CARE) ProgramProvides a monthly discount on energy bills for income-qualified households.

Family Electric Rate Assistance (FERA) ProgramProvides a monthly discount on electric bills for income-qualified household of three or more persons.

Relief for Energy Assistance through Community Help (REACH)Provides a one-time energy assistance, sponsored by PG&E and administered by the Salvation Army. Helps income-qualified customers who experience severe or unplanned hardships and are unable to pay for their energy needs.

Payment ArrangementsAllows customers experiencing payment difficulty additional time to pay their bill. Payments can be made in installments for as long as a 12-month period.

Energy Partners Provides income-qualified customers free energy education, weatherization measures and energy-efficient appliances to reduce gas and electric usage. Weatherization measures may include caulking, weather-stripping, CFLs, and attic insulation. Appliances may include refrigerators and air conditioners.

Customer Assistance Programs

Third Party NotificationAllow customers to name a friend of relative to receive duplicate copies of past-due payment notices. The designated person is not responsible for paying the bill, but can contact PG&E to help resolve the problem.

Bill Guaranty A deposit alternative which enables customers to secure their account by having another qualifying PG&E customer sign on their behalf.

Automatic Payment ServicePayments to PG&E are automatically deducted from customer’s bank account.

Balanced Payment ProgramMonthly payments can be averaged out to allow customers to budget energy costs and eliminate big swings in payments. Customers will usually pay the same amount every month which can help during extreme-weather months.

Rebates For Your HomeProvides a wide range of rebates- from instant savings on lighting products to our appliance recycling program- to help save energy and money.

Outreach and Customer Assistance

PG&E continues to explore enhanced and new customer assistance options. However, the greatest immediate opportunity to assist our customers lies in increased outreach to raise awareness and participation in our existing programs. This includes outreach through:

– Direct mail– Targeted advertisements– Bill inserts– Outreach events– Collaboration with community partners– Web banners– On hold messaging– Workforce outreach– Door-to-door canvassing

Outreach Highlights

• Bundled existing programs and services as “Breathe Easy Solutions™” to increase awareness and simplify enrollment

• Proactive outreach to customers who have historically made timely payments but are now in delinquent status

• Door-to-door canvassing of income-qualified zip codes to promote CARE and Energy Partners Program

• Participated in 140 multicultural and community events and presentations throughout service area to promote CARE and other customer assistance programs

• Partnered with other utilities for “We CARE California” resource fairs in Bakersfield and Stockton

• Bill insert for Energy Partners Program

• Proactive media outreach to raise awareness of programs

• Outreach to businesses announcing workforce reductions

Many Touch Points with Customers

Residential Collections and Severance Process – Calendar Days

Col

lect

ion

Pro

cess

App

rox.

Day

sM

edi

cal /

Life

-Sup

por

t

Sev

eran

ce

Pro

cess

App

rox.

Day

sB

illin

g

Bill is completed and issued

Bill – Day 0

Bill is due

Day 21

Current billed amount becomes

delinquent

Day 22

Is Delinquent Debt >= $50 and

Is Delinquent Debt >= 42 days

Day 42

Account cycles to next month

No

Day 42

Issue 15 Day Notice

Issue 48 Hour Notice

Day 55

Outbound Phone Call attempt

Day 62

Yes

Start Disconnection

Process

Day 65

Medical or Life-Support

Account?No

Yes

Day 65

Generate report for Credit Ops

Start Medical/Life-Support

Disconnection Process

Generate Disconnect for Non-Payment

Day 76 - 83

Issue Final BillIf payment is not received by this date, the account will be closed and final billed

End

New bill is completed for new charges and any unpaid charges

Day 27 - 331

2 3

4

5

Day 65

Day 66

Customer Disconnected for

Non-Payment

Day 67 - 746

Many Touch Points with Customers

Footnotes to Residential Collections and Severance Process

Sev

eran

ce

Pro

cess

Wor

k D

ays

Med

ical

/Li

fe-S

uppo

rtC

olle

ctio

n P

roce

ssA

ppro

x. D

ays

Bill

ing

1

Customers can request a Pay Plan once the bill has been generated. A Pay Plan is intended to provide the customer more time to fulfill their payment obligation to PG&E. Beginning 12/17/2009, if a customer establishes a Pay Plan that is greater than 7 days, they will be provided with a reminder call 3 days prior to the scheduled payment date.

Previously, if a customer had 2 or more broken Pay Plans within the last 6 months they were not eligible for a Pay Plan. Beginning 12/28/09, if a customer has 2 or more broken Pay Plans within the last 6 months they may be eligible for a “2nd Chance” Pay Plan.

Beginning 12/29/2009, when a customer is scheduled to receive a 48 Hour past due notice they will receive an automated call. The call advises customers that they may qualify for a Pay Plan or other types of assistance, such as CARE or FERA. They are informed that additional details will be mailed to them and they can also be found on www.pge.com. The customer is then given the option to make a payment over the phone, hear their account status, make a pay plan, hear additional details regarding the free assistance programs, or speak to a customer representative.

2 3

Beginning 12/17/2009, the Outbound Phone Call will have two new prompts that will allow the customer to request a pay plan or to speak with a customer representative.

Previously, a customer was not eligible for a pay plan once the OACU call (Outbound Phone Call) had taken place.

4

From 12/15/2009 – 1/4/2010 there will be a SONP moratorium. Residential customers will not be shut-off for non-payment during this moratorium.

5

Beginning 12/16/2009 a moratorium has been put in place for residential deposits that are required on SONPs. The moratorium will be in effect through March of 2011. Deposits will not be charged when a customer pays to restore their service after they had been previously shut-off for non-payment.

As of 12/17/2009, a new deposit option is now available for residential customers. Customer’s may choose to sign up for APS (Automatic Payment Service) for 12 months in lieu of paying a cash deposit. The Bill Guaranty option is still available as well.

Additional sensitivity in treatment of medical / life support customers once they are eligible for the Disconnect Process:

1. Phone attempt and/or 15-day warning letter to customer 2. Certified Letter, notifying customer of date of service disconnection3. Phone attempt and/or letter from PG&E Customer Relations for final pay plan

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