You asked why it took so long for the Department of Public Utility Control (DPUC) and the electric companies to implement the summer conservation program established by PA 07-242.

SUMMARY

PA 07-242 requires electric companies to provide bill credits to customers who reduced their electric consumption in summer 2007 by 10% or more compared to last summer. The governor signed the legislation on June 4, 2007 and DPUC approved the electric companies' implementation plans on June 22, 2007. While DPUC and the companies worked expeditiously, implementation was slowed by the four weeks it took to develop and distribute direct mail advertisements for the program. In addition, the direct mail and other advertising materials did not clearly state that DPUC had required customers to enroll in the program to be eligible for the credits. Recently, DPUC eliminated the enrollment requirement, so that all customers who made the required reduction in their consumption and met the other program requirements will be eligible for the credits.

SUMMER CONSERVATION PROGRAM LEGISLATION

PA 07-242 requires electric companies, in calendar year 2007, to offer a conservation incentive program to their customers. The program must compare electricity use from June 1, 2007 to August 31, 2007 to use in the same period in 2006 and give customers an incentive to conserve electricity in 2007. The comparison must be adjusted for changes in weather between the two years. The program is open only to customers who lived in the same dwelling in 2006 and 2007.

Electric companies must issue credits to customers who successfully participate in the program. The credit is 10% of the summer 2007 bill for customers who use 10% less electricity than they used in summer 2006. Customers who reduce their summer consumption by 15% get a 15% credit and those who reduce their consumption by 20% get a 20% credit. If the customer is participating in other peak-reduction programs, the credit must be reduced to reflect the benefits the customer receives under the other program. If the customer has an arrearage, the credit must be applied to his overdue balance.

The electric companies had to file plans with DPUC to implement the program 15 days after the act was passed. DPUC had to conduct an uncontested docket to establish the program's parameters. The program must be funded by the systems benefits charge on electric bills. DPUC must report to the Energy and Technology Committee by February 1, 2008 on the program's success and make recommendations for improving it.

IMPLEMENTATION

The House passed the bill on June 1, 2007 and the Senate on the next day. The governor signed the bill (except for two provisions unrelated to this program) on June 4, 2007.

On June 22, 2007 DPUC approved a plan submitted by the electric companies to implement the conservation program. In the decision, DPUC required that customers enroll in the program in order to be eligible for the credit. To maximize the program's success, DPUC shifted the consumption period for comparative billing from June through August, 2007 to July through September 2007 so that customers could be made aware of the opportunity to participate in the program. In addition, DPUC directed that the companies use radio, print, and direct mail to promote the program and DPUC approved a marketing budget of $ 2. 5 million.

In the decision approving the plan (docket 07-26-21), DPUC noted that the program faced serious challenges related to customer awareness because of the late start date for marketing efforts and the impact of vacations and other summer activities. DPUC observed that marketing

campaigns require significant lead time to plan and implement but that based on the act's requirements it was necessary to begin promoting the program quickly.

Within two weeks of the decision, the companies designed and produced print and radio advertisements, arranged and approved media purchases to ensure all customer segments were targeted, and delivered the final tapes and design files to the print and radio media. During this time, the companies also trained their customer service personnel, modified their web pages to reflect the program, and established enrollment procedures. After these tasks were completed, the companies worked on the direct mail advertisements, which took about four weeks to finalize. Unlike radio and print ads which can be produced quickly, direct mail requires additional time to produce and distribute. As a result, the direct mail advertisement reached Connecticut homes in mid-August, about six weeks into the program.

While the program was being implemented, DPUC became concerned that customers might not have been made fully aware of the enrollment requirement. The radio advertisements stated that customers could contact the companies to enroll, but did not require enrollment, while newspaper and the direct mail advertisements did not indicate that customers could or should enroll.

As a result, DPUC announced on September 25, 2007 that it would consider rescinding the enrollment requirement so that all customers might be eligible to receive credits under the program. On October 10, 2007, it issued a revised decision that eliminated the enrollment requirement, so that all customers who reduced their consumption by the required amount will receive the credit. In this decision, DPUC noted that as of that date, program enrollment exceeded 44,000 customers, about 3% of the companies' total customers. Based on past conservation marketing efforts and related participation, and considering the speed with which the marketing campaign was developed and deployed, enrollment exceeded DPUC's, expectations and the department commended the companies for their work in marketing the program.

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