those three areas of program design. product, facing, rates, and timing. with that, i like to have them make a presentation to you of the findings from our survey. >> think you, members of the commission. i am a partner at the community research firm. i will walk through a series of highlights from a customer survey that we recently completed and talk about some of their implications. i would be happy to answer any questions you have on it. of like to start with a brief methodology of the survey. we began with three interviews with randomly selected customers.

and we stratified the sample based on the rates that each of the individual customers somewhat in. so we over sampled customers in four and five, the highest amount of electricity usage and the highest electricity bills. he's make a relatively small share of the customer base. the impact on the rate is potentially higher, he wanted to make sure that we would be able to speak definitively about some of their opinions. the overall margin of era -- a margin of error is about 5 1/7%. i would like to begin by talking about some general preferences that we heard the customers expressed when it comes to issues around their electricity service. the question was really designed to drive at the core of value proposition which was essentially, we offered the

respondents a choice. would you like to pay more for electricity if you knew you would get more of it from clean, renewable sources? or would you like keeping the same rates even if it means you won't receive more of your energy from the clean and renewable sources. the customer base and basically split right down the middle. 45% said they would like to pay more, of 43% said they would prefer to maintain their current rates. we also have a question that asked about a variety of other factors. we offered the respondents the list of factors that you see if we ask them to rate the importance of each of them individually. in this slide, the dark green bars, light green is very

important. surface reliability, a 52% rating extremely important. 45% very important. almost all of them rating in the top two categories. we had second priorities include customer service, rate stability, at low rates that were priorities by roughly four and five customers. at the bottom of the list, we had renewable sources. this is a high priority for the vast majority of customers in cities. all five of these items are very important to electricity customers, but there is the variation on the degree and intensity of their feelings with reliability at the top of the list. all of these factors come into play when we ask the customers about holding power.

we started with the general question. we knew what kind of energy it would provide, and let them know that they would be automatically enrolled in we would have the ability to opt out if they chose. we asked them to indicate if they thought they would stay with clean power if the program was up and running or to switch back to pg&e. the customers split into thirds. 37 percent said they would split, 31% said they would opt out, and the remaining 32% said they did not know. we did not tell them what the potential impact on their rates was. it is likely that undecided was waiting to hear more information about the cost. in a follow-up question, we gave them that information. for customers in each of the tears, we gave them estimates of

the potential impact to try to understand their sensitivity. the scenario we describe for them was one in which they would provide energy that was 40% renewable had 100% greenhouse gas from. at that level, in the vast majority of customers in the city, we see that about three and five indicate that they would stay with clean our even if it that an increase between $3.60 dollars. the customers are about evenly divided in tier 2. a little less than half said they would stay with the program at a comparable number say they would opt out. the numbers go up significantly in 3, 4, and five of the rate increases that we are testing were higher. in each of those groups, we

still have had a core of respondents. they're telling us that they would stay with clean power sf. we know that those customers use the most electricity and we would have rate increases of $98 a month. we would still have 17% say they would stay with clean power sf. as a follow-up to this question, we asked about a different scenario. instead of providing power that would be 100% greenhouse gas free, we asked them to consider a scenario that was 100% billable had 100% greenhouse gas free. we asked them if they would choose to participate in such a program given the rates you see on the slide. the rate impact is somewhat higher than the 40% renewable scenario.

more than two in five customers indicate that they would opt in to the hundred% renewable scenario, and even when we get to talk about a potential rate increase, where 60 percent side that they would indicate they would choose the renewal option. it is interesting to compare the level of interest and participation than the respondents expressed in the 40% grenoble scenario, to the level they expressed. all five roads indicate the five rates tiers. the first two columns after that indicate the response is what we ask about the 40 persons and renewal will add 100% greenhouse gas renewable. we expect participation rates at the income of the costs for 40%

grenoble. the third and fourth columns moving to the right, which of the cost and participants for the 100% grenoble. while there is a drop-off in tier one. with the associated increased in cost, for the higher tiers, which is relatively slight. 4% in tier 2. one in tier 5. what this suggests is that the level of great sensitivity that we see, we talk about the increases that would be involved, it almost gets us down to a core of people whose interest is that they would opt for 100%. even at a somewhat higher price. this gives us a sense of what

the most solid base of support for the program is among each of the tears. even at 100% grenoble, it is not much lower than 40%. there are geographic differences in responses of the residents that we spoke with. and while we don't have a large enough sample of interviews to look at individuals the coats, we were able to divide the city into rough quadrants. northwest, southwest, northeast, southeast. the table to the right shows the proportion that would be interested in the 100% renewable energy scenario in each of these areas of the city. the highest level of interest is what we have defined as the northeast quadrant that runs from everything north of market in the northeast corner of the city down to the valley. that support drops a little bit in the southeast quadrant in the

northwest quadrant. slightly less than one-third indicate they would opt for 100% renewable package. finally, in order to understand the way that some of the customers might react to some of the arguments for and against the clean power program, we presented them with some of the major things that supporters and opponents might say. after giving then he to those statements, we asked them to indicate if they would stay with the program once it was up and running. based on the consistency of their responses, who were able to seven a customer base for three groups. they told us consistently throughout the survey that they would stay with clean power. they indicated they would opt out.

that gives me proportions. that leaves half of all residents is that this is going to fall into the category. the vending on the structure of the program, depending on the rate structure, their participants are most variable. with that summary, i will be happy to answer any questions that you have. commissioner pimentel: i have a question. how often will a ratepayer both to a different -- move to a different tier.

if someone is in tier 2, how many are they willing to go up before they would opt out? >> let me answer the question of the movement among tiers. i will return to end to the question to indicate if there is a willingness to stay. today, with nothing available, many customers and all customer consumption his bill and their consumption and the number of kilowatt hours is what determines what tier they are in. come -- customers can move amongst the tiers month to month. they discovered that they have moved into a higher rate half a

they have been killed. it is an after the fact awareness. handoff to the second part of your question, the degree to which customers might decide to opt out, and survey can't really speak to that because we asked people about their rate impact at their current level of usage. we did ask about a number of different grade levels that allows us to model some of the curve of the price sensitivity. we might be able to make ruckuses him if they were to go to another teacher, who but the percentage might be deterred. it would be a projection and not a definitive answer. >> does that answer question. >> we have been joined by commissioner avalos. commissioner mirkarimi: think you, mr. chairman.

the be yourself or she can reflect on this. the the just and pressing a bit when i am noticing when the county hall, in response to the efforts, who they are adjusting it. and you give me a little bit of contrast about what they are doing that looks like a response to our own strategies and how this seems to respond to their playing games. >> we will get into design of what we recommend to be the program designed in light of the presentation you have just heard. but they have proposed changes to their redesigned, both collapsing the tears -- tiers and proposing to flatten in

the generation component of rates. i will get more into that as we talk about program design. >> some of the tiered structure is that happening everywhere? >> it is happening territory- wide. we can only distinguish between customer classes and not locationally. >> this slide shows you the pg&e generation rate for 2011 residential customers and our climate zone. it shows you on the blue line the rates that pg&e currently houas for the generation component of rates.

you can see how it steps up based on the increase in consumption month-to-month. that is the tier, those steps are in reference to the tearier. it goes up with an increase in consumption. the red line is the proposed flat generation rate that pg&e has placed before the california public utilities commission. if adopted as proposed, it will represent an increase for the lower tiered customers. the average residential customer in san francisco is there. there will be a decrease for the higher tiered customers. that is just on the generational component and not the overall

bill. that is the component of service that the community choice aggregation service provides. >supervisor mirkarimi: does pg&e have a green tier? >> i am not aware they have a green service offering. they have a climate smart program. it is an offset type of program. they do not have a green portfolio program beyond the standard service. supervisor mirkarimi: it speaks to what i think is a telling and positive outcome in the poll that has 45% of the respondents saying they would prefer to pay more to insure that their electricity is coming from clean, renewable sources like solar and wind. it is nice to capture more than the anecdote that this could

beat the traffic that helps us insert towards unleashea niche t pg&e cannot provide. >> these are core customers that are consistently with us. >> i have a question for mr. metz on the data. i am trying to understand slide two versus slide 5. it looks like there were split on the idea of paying more for renewable energy. half wanted to and half did not. and guess it is because you are drilling down now and going by teaier that there seems to be ls interest at the higher tiers.

>> that is correct. the first side is a purely conceptual question asking if they would pay more in general principle. in five, we're giving them very specific information about what the rate increase would be. their reaction is to that specific context instead of the general. that is where you see this papee steeper creation. >> as we talk about program design, there will be a strategy for the targeted group, which tier it is, which groups will be more inclined to pay more for renewable. i was struck by slide four. it shows that once they heard more about the program, they were more inclined to stay with

the program. that is kind of a marketing question. is that right? if they are educated about it, they might stay with it. >> this slide is showing when they are given a description of the program, 37% are saying they would stay with it. 32% are uncertain. we surmise is because we have not given them the rate information yet. because these numbers are fairly consistent in terms of their being roughly equal numbers that will stay with the program and others who will opt out, i think it does indicate that when the public is familiar with the basic contours of the program, there is a set of customers brought in from the beginning that do not move. the way you characterized it in that regard is right. the core idea of what is being embodied in clean power sf is

that there is a set of customers that will like it and stick with it. there is a set of customers on the other side who say they will opt out in the beginning and no additional information will tempt them to opt back in. >> can you summarize the targeted group? can we surmise geographically or tier-wise or value-wise? >> the people in that group are much more likely to be in the lower tiers and the impact on them would be less. geographically, they are more likely to be in the northeastern part of the city. there are a number of other correlations we see demographically in the survey. they tend to be more highly educated. they tend to have higher levels of household income.

they tend to be more female and venturrenters. they tend to be more concentrated in the lower rate tiers. are also more likely to be young and old. >> commissioner moran? >> looking at slide 5, when you have the graph of their of the last rate structure, it came in at the lower end of tier 3. on the dollars per month impact, i wonder how that is affected by the pg&e change in rate structure.

would it still be in the $14 a month range because they're using less power? with the number go up? -- with the number go up? -- with the number go up? -- would the number go up. >> the questions you are opposing are questions we were hoping to get guidance from you on. thank you. i have a slide that helps to tie together what you saw from mr. metz. was that on slide 5? slides 7 is what is shown to the left of what i have on the screen. we have added what the premium price would be relative to a flat rate structure. i think that goes directly to your question. you can see what the premium would be for the different products in the first two

columns. you are asking a panel that premium would look -- how that premium would look relative to the proposal to flat in the generation component and rates. that is what the final column shows you. a $10 premium for tier one and so on. the slide that mr. metz showed that indicated we would have a drop-off in tier one going to the $14 premium, the higher premium product at a higher price, we sought a 14% reduction. we're now under a flat generation proposal that if adopted will see a $10 premium. that brings us more in line with expected participation levels we saw with the $8 premium, the 60%

participation levels. one might draw the conclusion that it may increase the participation in our program by tier 1 customers to see the flattening of the raid occurred. >> that $10 would be on top of the now higher rate. is that right? >> the $10 would be the premium the customer would see under pg&e billed structure. >> thank you. >> commissioner schmeltzer? >> i had a couple questions about the survey.

how long did the survey take per customer? >> on average between 15 and 20 minutes. >> you said at the beginning you completed -- >> 823 interviews. >> were there a number of people who got halfway through and in the start of losing them? did you do anything with that data? >> no, that data is excluded. in any telephone survey, there are some respondents who get three or four questions in or the need to go for some reason or another. we do not include the data. the data is only for the fully completed surveys. the rate at which phone service participants terminated in the middle of the interview is no different from what we have seen in surveys in the past. it falls right in the middle of

the range. >> that is good. i think others covered my other questions. >> if i may follow up on the survey itself, how did you decide how many people to include in the survey? was that based on what is typical for this kind of a survey? >> typically most surveys we do in the city of san francisco, we do about 600 interviews. that is enough to get to a 4% overall margin of error. it is fairly standard for a citywide survey. here we did additional interviews beyond that because we wanted to capture more interviews in tiers 4 and 5. iran and sampling would have those making up a small portion. -- regular sampling would have madhave those making of a small

portion. we wanted to make sure we had a solid sample and each one. that is the reason why we had a larger sample size. >> can you say anything about the diversity of the survey? was it conducted in more than one language? >> that is a good point. the survey was conducted in english, spanish, and chinese. generally speaking, because the lower tiers include more renters, they also include more younger residents and people of color. there are also lower levels of income. the higher tiers tend to be more white, more affluent, longer- term residents of the city. within each tier, the interviews were a random sample. the diversity of responses within each reflects the universe of customers with in the tier. >> looking at this, the higher

the tier, the less likely they are to participate. what percentage of ratepayers are in the various tiers? >> on a slide 5, you will see the total number of customers within each. i do not have the percentages in front of me. of the top of my head, tier one represents 54%. it is a slight majority of all customers. when we get down to tier 5, it is only 9000 customers of a total of around 200,000. it is only about 5% of the overall total.