energy - south carolina

Progress Energy

The Ilonorable Jocelyn G. Boyd Chief Clerk/ Administrator

March 27,2012

Publ ic Service Commission of South Carolina 101 Executive Center Drive, Suite 100 Columbia, SC 2921 0

RE: Experimental Residentia l Prepay Pilot Program Docket No. 2009-190-E

Dear Mrs. Boyd:

On February 17, 2012, Progress Energy Carolinas, Inc. ("PEC") filed with the Public Service Commission ("Commission") a request for approval of its proposed experimental tariff, Residential Service - Prepay Pilot Program Schedule RPP-18 ("the Request"). On March 21 , 2012 PEC representatives appeared before the Commission at an allowable ex parte presentation to discuss the details of the proposed Request and answer questions from the Commission. During the presentation, the Commission noted a discrepancy in the estimated cost of the proposed Prepay Pilot Program as presented in tables on pages 2 and 11 of the fil ing. PEC apologizes for this error.

The table on page 11 contains the correct information. Accordingly, attached for filing with the Commission is a revised Request containing correct, and consistent, cost estimates in both tables appearing on pages 2 and 11 of the Request. In addition, PEC noted the cost table on page 9 contained a discrepancy which has been corrected.

Also during the ex part~ presentation it became apparent there were errors in the Request as well as the slides used during the presentation regarding the Commission Rules that PEC was asking the Commission to waive in order to implement the Prepay Program. Appendix A of the Request lists the rules for which PEC seeks a waiver. One rule heading, "1 03-342. Reasons for Denial or Discontinuance of Service," was inadvertently omitted from both the Other Relevant Information section on page 10 and Appendix A. It is now properly listed in the attached revised Request. PEC also added the text of Regulation 103-339 Customer Billing, regarding reading of the meter, to that rule section in Appendix A and corrected a typographical error on page 22.

Slide number 8 of the ex parte presentation includes a list of the rules for which PEC seeks waivers. As observed by the Commission, that slide is inconsistent with the waivers requested in Appendix A. PEC has determined that the slide was in error. The slide listed a request for waiver of Regulation 103-336 Deposit Retention. Waiver of this regulation is

Progress Energy Service Companv. LLC r.u flox 1551 l!nlelgil, NG '//GO?

~l Progress Energy

March 27, 2012

The I lonorable Jocclyn G. BoydChief Clerk/AdministratorPublic Service Commission of South Carolina101 Executive Center Drive, Suite 100Columbia, SC 29210

RE: Experimental Residential Prepay Pilot ProgramDocket No. 2009-190-E

Dear Mrs. Boyd:

On I'ebruary 17, 2012, Progress Energy Carolinas, Inc. ("PEC") filed with the PublicService Commission ("Commission") a request for approval of its proposed experimental tariff,Residential Service — Prepay Pilot Program Schedule RPP-18 ("the Request"). On March 21,2012 PFC representatives appeared before thc Commission at an allowable ex parle presentationto discuss the details of the proposed Request and answer questions from the Commission.During the presentation, the Commission noted a discrepancy in the estimated cost of theproposed Prepay Pilot Program as presented in tables on pages 2 and 11 of the filing. PFCapologizes for this error.

'I he table on page 11 contains the correct information. Accordingly, attached Ior filingwith thc Commission is a revised Request containing correct, and consistent, cost estimates inboth tables appearing on pages 2 and 11 of the Request. In addition, PEC noted the cost table onpage 9 contained a discrepancy which has been corrected.

Also during the ex parte presentation it became apparent there werc errors in the Requestas well as thc slides used during thc presentation regarding the Commission Rules that PEC wasasking thc Commission to waive in order to implement the Prepay Program. Appendix A of theRequest lists thc rules for v:hich PEC seeks a waiver. One rule heading, "103-342. Reasons forDenial or Discontinuance of Service," was inadvertently omitted from both the Other RelevantInformation section on page 10 and Appendix A. It is now properly listed in the attached revisedRequest. PEC also added the text of Regulation 103-339 Customer Billing, regarding reading ofthe meter, to that rule section in Appendix A and corrected a typographical error on page 22.

Slide number 8 of the ex parte presentation includes a list of the rules for which PECseeks waivers. As observed by the Commission, that slide is inconsistent with the waiversrequested in Appendix A. PEC has determined that the slide was in error. The slide listed arequest I'r waiver of Regulation 103-336 Deposit Retention. Waiver of this regulation is

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PEC prior to the customer opting for the Prepay Program is rolled into the prepay account as a credit. The slide also incorrectly omitted the waivers requested for Regulations 103-340 and 103-342. Again, PEC apologizes to the Commission for these errors and any resulting inconvenience.

Attachment 1 is the clean version of the Program, and Attachment 2 shows the red lined changes. With these corrections, PEC requests Commission approval of the Prepay Program at the Commission's earliest convenience.

LSA:mhm

cc: Nanette Edwards, ORS JeffNelson, ORS

STAREG2325

Very truly yours,

Len Anthony General Counsel Progress Energy Carolinas, Inc.

The I lonorable Jocelyn G. Boyd March 27, 2012

unnecessary because any deposit held by PEC prior to the customer opting for the PrepayProgram is rolled into the prepay account as a credit. The slide also incorrectly omitted thewaivers requested for Regulations 103-340 and 103-342. Again, PEC apologizes to theCommission for these errors and any resulting inconvenience.

Attachment I is the clean version of the Program, and Attachment 2 shows the redlinedchanges. With these corrections, PEC requests Commission approval of the Prepay Program atthe Commission's earliest convenience.

Very truly yours,

Len AnthonyGeneral CounselProgress Energy Carolinas, Inc.

LSA:mhm

cc: Nanette Edwards, ORSJeffNelson, ORS

STAREG2325

Attachment 1

Clean Version of the Program

COVER PAGE

SCPSC 2009-190-E

Program Name: Residential Prepay Pilot Program (Experimental)

Program Type: Energy Efficiency

Target Class: Residential Progress Energy Carolinas Customers

Target End-uses: All Residential Electric End-Uses Can S.e Affected By This Program

Duration: Approval date - December 31,2014

In accordance with the Public Service Commission of South Carolina's ("SCPSC" or "the Commission") June 26, 2009 Order No. 2009-373 issued in Docket No. 2008-151-E , Progress Energy Carolinas, Inc. ("PEC'') respectfully submits the attached request for approval of the experimental Residential Prepay Pilot Program ("Prepay").

Program Description

The primary objectives of Prepay are to measure and validate the achieved energy and capacity savings resulting from offering customers a prepaid payment option, and to better understand the drivers and persistence behind the associated energy savings. Similar programs report energy savings from 10% - 15%. The Prepay Pilot will also help PEC to determine the market for Prepay, examine customer behavior while on Prepay, determine customer motives, and evaluate customer preferences regarding payment channels and commlll1!ication methods.

Consideration to be Offered

Participants will have access to a web portal and ability to make cash payments prior to consumption of electricity. Participants will not be charged a security deposit, disconnect fees, or reconnect fees; and will have access to multiple self-selected communication channels, including phone calls, email, integrated voice response (IVR), and text messaging to schedule notifications or alerts regarding their usage and account balance. In addition, up to 250 in-home displays will be available to participants on a first come, first served basis.

Residential Prepay Pilot Program Page 1 of26

PEC DSM/EE PROGRAM APPROVAL REQUEST

COVER PAGE

SCPSC 2009-190-E

Program IVame: Residential Prepay Pilot Progriun (Experimental)



Target End-uses: All Residential Electric End-Uses Can Be Affected By This Program

Duration: Approval date — December 31, 2014

In accordance with the Public Service Commission of South Carolina's ("SCPSC" or "theCommission") June 26, 2009 Order No. 2009-373 issued in Docket No. 2008-151-E, ProgressEnergy Carolinas, Inc. ("PEC") respectfully submits the attached request for approval of theexperimental Residential Prepay Pilot Program ("Prepay").

Program Description

The primary objectives of Prepay are to measure and validate the achieved energy and capacitysavings resulting from offering customers a prepaid payment option, and to better understand thedrivers and persistence behind the associated energy savings. Similar programs report energysavings from 10% - 15%. The Prepay Pilot will also help PEC to determine the market forPrepay, examine customer behavior while on Prepay, determine customer motives, and evaluatecustomer preferences regarding payment channels and communication methods.

Consideration to bc Offered

Participants will have access to a web portal and ability to make cash payments prior toconsumption of electricity. Participants will not be charged a security deposit, disconnect fees,or reconnect fees; and will have access to multiple self'-selected communication channels,including phone calls, email, integrated voice response (IVR), and text mcssaging to schedulenotifications or alerts regarding their usage and account balance. In addition, up to 250 in-homedisplays will be available to participants on a first come, first served basis.

Residential Prepay Pilot Program Page I of 26

Program ( 4-Year Summary)

Year ARRA PEC General Funds Totals ($000) ($000) ($000)

201 1 $ 885 $ 0 $ 885 2012 2,046 0 2,046 2013 405 324 729 2014 0 424 424 Total $ 3,336 $ 748 $ 4,084

Proposed Funding

Prepay costs will be funded from a Department Of Energy ("DOE") designated American Recovery and Reinvestment Act ("ARRA") grant for the period of February 201 1 - April 2013. All remaining costs eligible for recovery will be funded from PEC's general funds. These remaining costs will be subject to cost recovery through a OSM/EE annual cost-recovery rider consistent with the Commission's Ruling in Docket No. 2008-151-E.


Total Cost of thc Program (4-Year Summary)

Proposed Funding

Prepay costs wiH be funded from a Department Of Energy ("DOE") designated AmericanRecovery and Reinvestmcnt Act ("ARRA") grant for the period of February 2011 — April 2013.All remaining costs eligible for recovery will be funded from PEC's general funds. Theseremaining costs will be subject to cost recovery through a DSM/EE annual cost-recovery riderconsistent with the Commission's Ruling in Docket No. 2008-151-E.

Residential Prepay Pilot Program Page 2 of 26

Prepay Pilot Program

Contents Program Description ..................................................................................................................................... 5

Program Objective ..................................................................................................................................... 8

Program Duration ........................... .... ....................................................................................................... 8

Targeted Sector and Eligibility Requirements ..................................................... ........................... ........... 8

Communication Costs and Examples ...... ..... ...................... ............................................ ........................... 9

Estimated Number of Participants .. ..... ...... ............... ..... ............................................... ............... .... ........ . 9

Program Impacts ............................. ........ ...... ............................................................................... ..... ..... ... 9

Other Relevant Information .................. .............................................................................. .................... 10

Additional Information .......................... .............................................................................. ........... ............. 10

Proposed Marketing Plan ........................................................................................................................ 10

Market Potential and Estimated Market Growth ................................................................................... 10

Estimated Summer and Winter Peak Demand Reductions ..................................................................... 10

Estimated Energy Reduction ........... ........................................................................................................ 10

Estimated Lost Energy Sales .................................................................................................................... 11

Estimated Load Shape Impacts ............................................................................................................... 11

Costs and Benefits ......................... ..... ... ........... ........................................................................................... 11

Total and Per Unit Cost and Benefit ......... ........ ... ........ ... ......................................... ....................... ......... 11

Participation Incentives ............. ............................................................................................................. . 12

Service Limitations or Conditions Imposed on Non-Participants ............................................................ 12

Cost-Effectiveness Evaluation ................................................................... .. ................................................ 12

Integrated Resource Plan ........ ............ ........... ............................................................................................. 12

Cost Recovery Mechanism .......................................................................................................................... 12

Estimate of Avoided Capacity and Energy Costs ..................................................................................... 13

Estimate of Participation Incentives ....................................................................................................... 13

Cost Allocat ion .......... .............................................................................................................................. 13

Proposed Capitalization Period f or Long Lived Program Costs ............... ...................................... .......... 13

Estimated Measurement and Verification Costs .................................................................................... 13

Measurement and Verification Reporting Plan ........................................................................................... 14


Residential Prepay Pilot Program

ContentsProgram Description.

Program Objective.

Program Duration..

Targeted Sector and Eligibility Requirements.

Communication Costs and Examples .................

Estimated Number of Participants.

Program Impacts.

Other Relevant Information.

Additional Information.

Proposed Marketing Plan.

Market Potential and Estimated Market Growth ..

Estimated Summer and Winter Peak Demand Reductions......

Estimated Energy Reduction

Estimated Lost Energy Sales.

Estimated Load Shape Impacts.

Costs and Benefits.

..10

...... 10

.....10

..10

....10

.....10

Totaland Per Unit Cost and Benefit,.

Participation Incentives..

Service Limitations or Conditions Imposed on Non-Participants..

Cost-Effectiveness Evaluation

Integrated Resource Plan.

Cost Recovery Mechanism.

Estimate of Avoided Capacity and Energy Costs..

Estimate of Participation Incentives.

Cost Allocation

Proposed Capitalization Period for Long Lived Program Costs.

Estimated Measurement and Verification Costs.

Measurement and Verification Reporting Plan.,

..12

..12

..12

..12

..12

.13

.13

.13

..13

..13

.14

Rcsidcntial Prepay Pilot Program Page 3 of 26

Schedule ............................................................................... l8

Methodologies Used to Produce Impact Estimates ................................................................................ 19

Independent Third Party Verification ...................................................................................................... 19

Cost Recovery Mechanism .............. ............ ... ...................................... .... ......... ........................ .................. 19

Tariffs ........................................................................................................................................................... 20

Utility Incentives .......................................................................................................................................... 20

Appendix A ............................................................................... ............................................................... 21

!Residential Prepay Pilot Program Page 4 of26

Measurement and Verification Methods.. 15

Measurement and Verification Reporting Schedule..

Methodologies Used to Produce Impact Estimates.

Independent Third Party Verification..

Cost Recovery Mechanism.

Ta riffs...........,..........

Utility Incentives..

Appendix A .....

..18

..19

..19

..19

..20

..20

..21


Prepay are to measure and validate the achieved energy and capacity savings resulting from offering customers a prepaid payment option, and to better understand the drivers and persistence behind the associated energy savings. Similar programs report energy savings from l 0% - 15%. The Prepay Pilot will also help PEC to determine the market for Prepay, examine customer behavior while on Prepay, determine customer motives, and evaluate customer preferences regarding payment channels and communication methods.

As an alternative to a monthly bill with a pre-determined payment due date, Prepay allows a customer to deposit a lump sum into an account where charges are deducted in real time as energy is consumed. As the account balance diminishes, customers may deposit additional funds to continue consuming energy with no break in service.

Prepay is limited to no more than 1,000 customers who meet eligibility requirements. Areas selected are: Raleigh, NC (zip codes: 27601, 27603, 27606, 27609, 27610), Fayetteville, NC (zip codes: 2831 1, 28303), Spring Lake, NC (zip codes: 28390), Jacksonville, NC (zip codes: 28540, 28546), and Florence, SC (zip codes: 29501, 29505). The zip codes selected contain a wide variety of customer segmentation types. This will allow PEC to gather data and understand the segments of customers who may choose to enroll in Prepay to help benefit the company in the design of a potential long-term program. Ideally, up to 250 participants in each area will elect to enroll in Prepay. However, if an area does not provide 250 participants in a timely manner, participation may be increased in other selected areas.

Implementation Eligible customers will be solicited initially via direct mail and email to explain Prepay and provide information on how to enroll. Customers interested in participating in Prepay will be verified for eligibility, surveyed at enrollment (to be used later for Evaluation, Measurement and Verification ("EM& V")), and provided education on Prepay so that customers fully understand how Prepay operates.

Participants will receive a new meter with advanced capabilities including remote connect/disconnect and daily automated meter reads utilizing a 2-way communication network. The customer will not need to be home in order for the meter to be installed. A welcome package will be left at the customer's home to provide information on Prepay, payment locations, and to notify the customer that the meter has been exchanged. This information will also be available for the customer to view via the web portal program detail page.

The transition of existing customers to Prepay billing will require a final post-pay bill for all usage up to the date of the transition and the corresponding meter exchange. After the due date for this final bill, any deposit, plus interest, that is held will be used against any arrears with the balance being applied as a credit to the Prepay account. If the account still has an arrearage, the arrears will be applied to the Prepay account along with any late payment or other charges that might be applicable. Twenty-five percent (25%) of each future prepayment will be applied to the


Program Description

OverviewThe pritnary objectives of Prepay are to measure and validate the achieved energy and capacitysavings resulting I'rom offering customers a prepaid payment option, and to better understand thedrivers and persistence behind the associated energy savings. Similar programs report energysavings from 10% - 15%. The Prepay Pilot will also help PEC to determine the market forPrepay, examine customer behavior while on Prepay, determine customer motives, and evaluatecustomer preferences regarding payment channels and communication methods.

As an alternative to a monthly bill with a pre-determined payment due date, Prepay allows acustomer to deposit a lump sum into an account where charges are deducted in real time asenergy is consumed. As the account balance diminishes, customers may deposit additional fundsto continue consuming energy with no break in service.

Prepay is limited to no more than 1,000 customers who meet eligibility requirements. Areasselected are: Ra!cigh, NC (zip codes: 27601, 27603, 27606, 27609, 27610), Fayetteville, NC (zipcodes: 28311, 28303), Spring Lake, NC (zip codes: 28390), Jacksonville, NC (zip codes: 28540,28546), and Florence, SC (zip codes: 29501, 29505). The zip codes selected contain a widevariety of customer segmentation types. This will allow PEC to gather data and understand thesegments of customers who may choose to enroll in Prepay to help benefit the company in thedesign of a potential long-term program. Ideally, up to 250 participants in each area will elect toenroll in Prepay. However, if an area does not provide 250 participants in a timely manner,participation may be increased in other selected areas.

ImplementationEligible customers will be solicited initially via direct mail and email to explain Prepay andprovide information on how to enroll. Customers interested in participating in Prepay will beverified for eligibility, surveyed at enrollment (to be used later for Evaluation, Measurement andVerification ("EM&V")), and provided education on Prepay so that customers fully understandhow Prepay operates.

Participants will receive a new meter with advanced capabilities including remoteconnect/disconnect and daily automated meter reads utilizing a 2-way communication network.The customer will not need to be home in order for the meter to be installed. A wclcotnepackage will be leR at thc customer's home to provide information on Prepay, paymentlocations, and to notify the customer that the meter has been exchanged. This information willalso be available for the customer to view via the web portal progrtun detail page.

The transition of existing customers to Prepay billing will require a final post-pay bill for allusage up to the date of the transition and the corresponding meter exchange. ARer the due datefor this final bill, any deposit, plus interest, that is held will be used against any arrears with thebalance being applied as a credit to the Prepay account. If the account still has an arrearage, thearrears will be applied to the Prepay account along with any late payment or other charges thatmight be applicable. Twenty-five percent (25%) of each future prepayment will be applied to the


Prepay, any one-time service charges or other charges must be paid up-front to initiate service.

Prepay participants will not receive paper bills or paper communications throughout the program. Participants will be provided with a choice of multiple communication channels, including a specially designed web portal, which may be accessed via a smart phone, emails, text messages, phone calls, or an optional in-home display device (described below), all of which are self-selected by the customer. These communications provide the customer ways to monitor daily usage shown in number of days of power remaining, dollars remaining, and kWh remaining. Additional account history information is available via the web portal such as a

. graph showing hourly interval usage, payments made, etc. Participants may access the web portal 7 days a week, 24 hours a day and may set preferences for the type of communications they wish to receive. At least one alert type is mandatory; however, the customer may select multiple (or all) types if so desired. Once participants have selected their preferred communication channel(s), they will then receive any Prepay notifications, payment notifications, and balance notifications via their preferred channel(s).

Up to 250 in-home displays will be provided to Prepay participants on a first come, first served basis. Customers may request a display or may be offered one if they do not have access to internet service, email or a mobile device. There is no charge for the in-home display to the customer during Prepay. In-home displays will not provide payment options, but will display usage information, including daily, weekly, and monthly usage (kWh), and electric balance remaining in days and dollars (based on the customer's average daily use). Participants who elect to receive an in-home display will receive it as part of the welcome package when the Prepay meter is installed. The in-home display will go through a process to 'join" it to the meter by PEC meter personnel before providing it to the customer. Upon receipt of the device, the customer simply plugs it in to any household outlet to start receiving information. In the event the in-home display device is damaged by acts of the customer or others, the customer shall pay a replacement charge. Correspondingly, if the customer fails to return the in-home display device to the company when the customer discontinues receiving service before conclusion of the Prepay pilot, the replacement cost shall be charged to the customer. The Company reserves the right to transfer ownership of the device to the customer at the end of the Prepay pilot.

Prepay participants will be able to make payments using a variety of channels. As long as there is

a positive account balance, no minimum payment amount is required; so, customers may choose a payment frequency and amount that work best for them based on their lifestyle preferences. The customer should not utilize payment methods other than those included as part of the Prepay program, as referenced in the Residential Service - Prepay Pilot Program Schedule RPP-18 Rider (Experimental) ("Tariff') and attached in Appendix B, as such methods will cause substantial delays in posting payments to Prepay and may result in disconnection until the payment posts. In the event of extreme weather moratorium, customers will be notified via their preferred

communication channel when the event starts and ends. Disconnects will resume at the daily set

time the day after the moratorium is lifted. A minimum payment based on the customer's average usage, is required to reconnect a disconnected account. The customer is responsible for


arrears amount until it is paid in full. If initial service is requested under Prepay, any one-timeservice charges or other charges must bc paid up-I'ront to initiate service.

Prepay participants will not receive paper bills or paper communications throughout theprogram. Participants will be provided with a choice of multiple communication channels,including a specially designed web portal, which may be accessed via a smart phone, emails, textmessages, phone calls, or an optional in-home display device (described below), all of which areself-selected by the customer. These communications provide the customer ways to monitordaily usage shown in number of days of power remaining, dollars remaining, and kWhremaining. Additional account history information is available via the web portal such as a

.graph showing hourly interval usage, payments made, etc. Participants may access the webportal 7 days a week, 24 hours a day and may set preferences for the type of communicationsthey wish to receive. At least one alert type is mandatory; however, the customer may selectmultiple (or all) types if so desired. Once participants have selected their preferredcommunication channel(s), they will then receive any Prepay notifications, paymentnotifications, and balance notifications via their preferred channel(s).

Up to 250 in-home displays will be provided to Prepay participants on a first come, first servedbasis. Customers may request a display or may be offered one if they do not have access tointemct service, email or a mobile device. There is no charge for the in-home display to thecustomer during Prepay. In-home displays will not provide payment options, but will displayusage information, including daily, weekly, and monthly usage (kWh), and electric balanceremaining in days and dollars (based on the customer's average daily use). Participants who electto receive an in-home display will receive it as part of the welcome package when the Prepaymeter is installed. The in-home display will go through a process to "join" it to the meter by PECmeter personnel before providing it to the customer. Upon receipt of the device, the customersimply plugs it in to any household outlet to start receiving information, In the event the in-homedisplay device is damaged by acts of the customer or others, the customer shall pay areplacement charge. Correspondingly, if thc customer fails to return thc in-home display deviceto the company when the customer discontinues receiving service before conclusion of thePrepay pilot, the replacement cost shall be charged to the customer. The Company reserves theright to transfer ownership of the device to the customer at the end of the Prepay pilot.


a positive account balance, no minimum payment amount is required; so, customers may choosea payment frequency and amount that work best for them based on their lifestyle preferences.The customer should not utilize payment methods other than those included as part of the Prepayprogram, as referenced in thc Residential Service - Prepay Pilot Program Schedule RPP-18 Rider(Experimental) ("Tariff') and attached in Appendix 8, as such methods will cause substantialdelays in posting payments to Prepay and may result in disconnection until the payment posts. In

the event of extreme weather moratorium, customers will be notified via their preferredcommunication channel when the event starts and ends. Disconnects will resume at the daily settime the day aAer the moratorium is lifted. A minimum payment based on the customer'average usage, is required to reconnect a disconnected account. The customer is responsible for


Prepay fees, such as payment processing fees, upon enrollment.

Once a customer reaches a balance equivalent to 10 days of power remaining, they will receive a notification each day until a payment is made, or until they are disconnected. Any disconnects will occur at approximately 10 a.m., and can occur on any day including weekends and holidays.

No disconnect or reconnect fees will be charged. Reconnects can occur at any time following a disconnect order once the customer recharges their account. Reconnects are expected to occur within 2 hours of payments made via program payment channels.

Customers that move while enrolled in Prepay may be de-enrolled if they no longer meet the eligibility criteria. Customers may also choose to de-enroll at any time. The Prepay meter will be removed from the premise when a customer exits Prepay and/or at the conclusion of the program.

The following diagram illustrates the Prepay process from enrollment to payment for customers:

Customer call to enroll and i zes account with funds

In home display with customer data


+-------+(] Meter reads

AMI headend system, CIM, and prepay engine - connect/disconnect and customer payments

Customer payments (credit, debit, prepa1d card, cash) and notifi'cattons via text, email, web, rvR ~-a

Page 7 of26

any processing fees associated with their chosen method of payment. All participants will beinformed of any associated Prepay fees, such as payment processing fees, upon enrollment.

Once a customer reaches a balance equivalent to 10 days of power remaining, they will receive a

notification each day until a payment is made, or until they arc disconnected. Any disconnectswill occur at approximately 10 a.m., and can occur on any day including weekends and holidays.No disconnect or reconnect fees will be charged. Reconnects can occur at any time following a

disconnect order once thc customer recharges their account. Reconnects are expected to occurwithin 2 hours of payments made via program payment channels.

Customers that move while enrolled in Prepay may be de-enrolled if they no longer meet theeligibility criteria. Customers tnay also choose to de-enroll at any time. The Prepay meter will beremoved from the premise when a customer exits Prepay and/or at the conclusion of theprogram.

The following diagram illustrates the Prepay process from cnrollmcnt to payment for customers:

How Does Prepay Work?

4

Customercallsto enroll and Intbaccount w

Meter rAMI head endsystem, CIM, and prepayengine — connectldisconnectand customer payments

In home displaywith customer data

Customer payments(credit, debit, prepaidcard,cash)and notifications viatext, email, web, IVR

I


Objective

The primary objectives of Prepay are to measure and validate the achieved energy and capacity savings resulting from offering customers a prepaid payment option, and to better understand the drivers and persistence behind the associated energy savings. Similar programs report energy savings from 10% - 15%. The Prepay Pilot will also help PEC to determine the market for Prepay, examine customer behavior while on Prepay, determine customer motives, and evaluate customer preferences regarding payment channels and communication methods.

Program Duration

Prepay is designed to run through December 31, 2014.

Ta rgeted Sector and Eligibili ty Requirements

PEC new and existing residential customers must meet the following eligibility criteria as defined in the Tariff: some of which arc summarized below:

1. Customers must reside in one of the following zip codes: a. Florence: 29501 , and 29505 b. Fayetteville:, 28303, and 28311 c. Spring Lake: 28390 d. Jacksonville: 28540, and 28546 e. Raleigh: 27601,27603, 27606, 27609, and 27610

2. Customer may receive service under the Street Lighting Service (Residential Subdivision) Schedule SLR and the Residential Service - Load Control Rider LCSUM-2 (Energy Wise), but may not participate in any other regulated or non-regulated products or services with the exception of PEC's standard energy efficiency program offerings.

3. Customer may not participate in the following while participating in Prepay: a. Equal Payment Plan (EPP) b. Bank Draft c. e-bill d. Preference Pay e. Deferred Payment Plan (DPP) f. Long-Term Payment Plan (LPP)

4. Residences participating in Landlord Agreements Docket No. 95-652-E are not eligible to participate in the program.

5. Customer cannot have an arrears balance that exceeds one month of metered service at the time of application.

6. Customers subject to the November-March disconnect moratorium (Commission Regulation l 03-352(a)(3)(b)) or with a Special Service Termination (SST) code that prevents disconnection of service during certain times are not eligible. These include: a. Life support equipment (SST code 1)


program Objective

The primary objectives of Prepay are to measure and validate the achieved energy and capacitysavings resulting from offering customers a prepaid payment option, and to better understand thedrivers and persistence behind the associated energy savings. Similar programs report energysavings from 10% - 15%. The Prepay Pilot will also help PEC to determine the market forPrepay, examine customer behavior while on Prepay, determine customer motives, and evaluatecustomer prcferenccs regarding payment channels and communication methods.

Program Duration

Prepay is designed to run through December 31, 2014.

Targeted Sector and Eligibility Requirements

PEC new and existing residential customers must meet the following eligibility criteria asdefined in thc Tariff, some of which arc summarized below:

Customers must reside in onc of the foHowing zip codes:a. Florence: 29501, and 29505b. Fayctteville:, 28303, and 28311c. Spring Lake: 28390d. Jacksonville: 28540, and 28546e. Raleigh: 27601, 27603, 27606, 27609, and 27610Customer may receive service under the Street Lighting Service (ResidentialSubdivision) Schedule SLR and the Residential Service - Load Control Rider LC-SUM-2 (EnergyWise), but may not participate in any other regulated or non-regulatedproducts or services with thc exception of PEC's standard energy efficiency programofferings.Customer may not participate in thc following while participating in Prepay:a. Equal Payment Plan (EPP)b. Bank Draftc. e-billd. Preference Paye. Deferred Payment Plan (DPP)f. Long-Term Payment Plan (LPP)Residences participating in Landlord Agreements Docket No. 95-652-E are noteligible to participate in the program.Customer cannot have an arrears balance that exceeds one month of metered serviceat the time of application.Customers subject to the November-March disconnect moratorium (CommissionRegulation 103-352(a)(3)(b)) or with a Special Service Termination (SST) code thatprevents disconnection of service during certain times are not eligible. These include:a. Life support equipmcnt (SST code 1)


Prepay meter is installed. 8. Residence must receive adequate cellular service in order for the meter to

communicate with the pilot program infrastructure.

Communication Costs and Examples

Communications Cost Year Amounts

($000) 2012 $ 240 2013 6 201 4 6 Total $ 252

Communications materials will be developed early 20 12; therefore, examples are not yet available. Proposed forms of communication materials are: direct mail; email; and a welcome kit consisting of program information.

Estimated Number of Participants

During Prepay, as customers leave the program, PEC will accept new customers during the ARRA grant window. After the grant window, PEC will strive to manage costs while maintaining a large sample size to the extent reasonably possible. The Company's estimated number of Prepay participants is provided in the following table:

Estimated Number of Participants (Cumulative} Year Partieip_ants 2012 1,000 2013 1,000 2014 1,000

Prepay is limited to no more than 1,000 customers in North and South Carolina. After the expiration of ARRA funds in 2013, new customers will not be enrolled into Prepay but rather existing customers participating in Prepay will be supported through the duration of the program.

Program Impacts

The results of Prepay, including program impacts, will be provided to the Commission upon completion of the final EM& V report.


b. Disabled (SST code 4)c. Seriously or chronically ill (SST code 5)d. Moratorium (SST code 2)A minimum starting balance of 3 days of power based on average usage must bc paidbefore the Prepay meter is installed.Residence must receive adequate cellular service in order for the meter tocommunicate with the pilot program infrastructure.


Communications materials will be developed early 2012; therefore, examples are not yetavailable. Proposed forms of communication materials are: direct mail; email; and a welcomekit consisting of program information.


During Prepay, as customers leave the program, PEC will accept ncw customers during theARRA grant window. After the grant window, PEC will strive to manage costs whilemaintaining a large sample size to the extent reasonably possible. The Company's estimatednumber of Prepay participants is provided in the following table:

Prepay is limited to no more than 1,000 customers in North and South Carolina. After theexpiration of ARRA 1'unds in 2013, new customers will not be enrolled into Prepay but ratherexisting customers participating in Prepay will bc supported through the duration of the program.

Program Impacts

Thc results of Prepay, including program impacts, will be provided to the Commission uponcompletion of the final EM&V report.


Prepay does not conform to a number of existing Commission regulations due to the unique nature of how Prepay functions. Therefore, as part of the process of requesting regulatory approval of Prepay, PEC requests the Commission waive all (or specified portions) of the following Commission Regulations which are further defined in Appendix A:

1. Regulation 103-32 1. Meter Reading 2. Regulation 103-339. Customer Billing 3. Regulation 103-340. Adjustment of Bills 4. Regulation 103-342. Reasons For Denial or Discontinuance of Service

5. Regulation 103-352. Procedures for Termination of Service

Additional Information

Proposed Marketing Plan

PEC will use an integrated approach to market Prepay. These marketing efforts are designed to inform consumers of payment options to fit their individualized lifestyles, understand energy costs, create customer awareness of the program, educate customers on energy saving opportunities, and emphasize convenience of participation. Email and direct mail sent to selected zip codes will be used to market Prepay.

Market Potential and Estimated Market Growth

Year Eligible Market Potential 2012 30,000 2013 30,000 2014 30,000

Estimated Summer and Winter Peak Demand Reductions

Refer to Program Impacts Section.




Other Relevant Information

Prepay does not conform to a number of existing Commission regulations due to the uniquenature of how Prepay functions. Therefore, as part of the process of requesting regulatoryapproval of Prepay, PEC requests the Commission waive all (or specified portions) of thefollowing Commission Regulations which arc further defined in Appendix A:

1. Regulation 103-321. Meter Reading2. Regulation 103-339. Customer Billing3. Regulation 103-340. Adjustment of Bills4. Regulation 103-342. Reasons For Denial or Discontinuance of Service5. Regulation 103-352. Procedures for Termination of Service


Proposed Marketing Plan

PEC will use an integrated approach to market Prepay. These marketing efforts are designed toinform consumers of payment options to lit their individualized lifestyles, understand energycosts, create customer awareness of the program, educate customers on energy savingopportunities, and emphasize convenience of participation. Email and direct mail sent toselected zip codes will be used to market Prepay.




Estimated Energy Reducti on



Sales


Estimated Load Shape Impacts


Costs and Benefits

Total and Per Unit Cost and Benefit

Eligible program costs, outside those funded with DOE designated ARRA funds, will be subject

to recovery through the DSMIEE Rider. Eligible program costs will consist of Operation and

Maintenance (O&M) costs which may include but are not limited to: labor, outside contractors,

maintenance of new infrastructure, computer software, telecommunications services, materials

and supplies. Eligible program expenditures incurred, net of ARRA funded amounts, will be

recognized in the accounting periods in which they occur.

p rogram ost rojcctlons ty ype O&MC P . b T Program

Administration Communications EM&V Total Year ($000) ($000) ($000) ($000)

ARRA Funds

2011 $ 885 $ 0 $ 0 $ 885

2012 1,754 240 52 2,046

2013 368 3 34 405

2014 0 0 0 0

Subtotal $ 3,007 $ 243 $ 86 $ 3,336

PEC's General Funds

2011 $ 0 $ 0 $ 0 $ 0

2012 0 0 0 0

2013 221 3 100 324

2014 358 6 60* 424

Subtotal $ 579 $ 9 $ 160 $ 748

Total $ 3,586 $ 252 $ 246 $ 4,084 0 •• .. . .. * Because M& V acl/v/1/es normally lag program admm/Slrat10n aciiVII/es, some por11on of M& V related costs will

be incurred in a subsequent year.


Estimated Lost Energy Sales


Estimated Load Shape impacts


Costs and Senefits



to recovery through the DSM/EE Rider. Eligible program costs will consist of Operation and



and supplies. Eligible program expenditures incurred, net of ARRA funded amounts, will be


Pro ram 0&M Cost Pro'actions b T e

Year

PfogranlAdministration Communications

$000 $000EM&V

$000Total$000

ARRA Funds

2011

2012

2013

2014

Subtotal

$ 885

1,754

368

$ 3,007

$ 0

240

$ 243

$ 0

52

34

$ 86

$ 885

2,046

405

$ 3,336

PEC's General Funds

2011

2012

2013

2014

Subtotal

Total

$ 0

221

358

$ 579

$ 3,586

$ 0

$ 9

$ 252

$ 0

100

60'160

S 246

$ 0

324

424

$ 748

$ 4,084v Because Ms( V activities normally lag program adtninistration activities, some portion ofMsrt V related costs will

be incurredin a subsequent year,

Residential Prepay Pilot Program Page 1 1 of 26

($000) Cost/Unit

Program Administration $ 3,586 $ 3,586

Communications 252 252

EM&V 246 246

Total $ 4,084 $ 4,084

Participation Incentives

Financial incentives are not offered; however, up to 250 in-home display devices will be offered to participants.

Service Limitations or Conditions Imposed on Non-Participants

The Company has not proposed any conditions or limitations for customers that do not wish to participate in the Prepay. Participation in this Prepay is strictly voluntary.


The primary objectives of Prepay are to measure and validate the achieved energy and capacity savings resulting from offering customers a prepaid payment option, and to better understand the drivers and persistence behind the associated energy savings. Similar programs report energy savings from I 0% - I 5

Integrated Resource Plan

PEC's 2011 Integrated Resource Plan shows a need for additional resources throughout the 15 year planning horizon. The plan also noted that PEC is actively pursuing expansion of its demand-side management ("DSM") and energy efficiency ("EE") programs as one of the most effective ways to reduce energy costs, offset the need for new power plants, and protect the environment.

Cost Recovery Mechanism

The portion of program costs to be recovered through the DSMIEE Rider will consist of eligible Operation and Maintenance (O&M) costs, which include but are not limited to: labor, outside contractors, maintenance of new infrastructure, computer software, telecommunications services,


The following table contains a summary of total categorized Prepay costs and unitized costsreported on thc basis of Prepay benefits.


Financial incentives are not offered; however, up to 250 in-home display devices will bc offeredto participants.


The Company has not proposed any conditions or limitations for customers that do not wish toparticipate in the Prepay. Participation in this Prepay is strictly voluntary.


The primary objectives of Prepay are to measure and validate the achieved energy and capacitysavings resulting from offering customers a prepaid payment option, and to better understand thedrivers and persistence behind the associated energy savings. Similar programs report energysavings from 10% - 15


PEC's 2011 Integrated Resource Plan shows a need for additional resources throughout thc 15

year planning horizon. The plan also noted that PEC is actively pursuing expansion of itsdemand-side management ("DSM") and energy eAiciency ("EE") programs as one of the mosteffective tvays to rcducc energy costs, offset the need for new power plants, and protect theenvironment.


The portion of program costs to be recovered through the DSM/EE Rider will consist of eligibleOperation and Maintenance (O&M) costs, which include but are not limited to: labor, outsidecontractors, maintenance of new infrastructure, computer software, telecommunications services,


DSM/EE Rider:

I. O&M dollars, net of DOE designated ARRA grant funding, recognized in the period in which they occur;

2. An appropriate incentive described later in the Utility Incentives section of this fi ling.

Estimate of Avoided Capacity and Energy Costs


Estimate of Participation Incentives

Refer to Participation Incentives Section.

Cost Allocation

Program costs will be allocated as follows:

1. Jurisdictional Allocation (all costs recovered from retail jurisdiction - North Carolina and South Carolina): Energy Efficiency cost allocations will be based upon energy/sales allocation.

2. Rate Class Allocation: Allocated jurisdictional costs will be assigned to PEC's residential rate class (Schedules: RES, R-TOUD, and R-TOUE)

Proposed Capitalization Period for Long Lived Program Costs

The Company will capitalize program costs in accordance with the Company's capitalization policy. The capital assets will be funded with ARRA dollars which will reduce their accounting book basis.

Estimated Measurement and Verification Costs

The Company's estimated measurement and verification costs for this Program are provided in the following table:


materials and supplies. Eligible program expenditures, net of ARRA funded amounts, will berecognized in the accounting periods in which they occur.

In summary PEC will recover through the DSM/EE Rider:l. O&M dollars, net of DOE designated ARRA grant funding, recognized in the period in

which they occur;2. An appropriate incentive described later in the Utility Incentives section of this filing.





Cost Allocation

Program costs will bc allocated as follows:

I. Jurisdictional Allocation (all costs recovered from retail jurisdiction — North Carolinaand South Carolina): Energy Efficiency cost allocations will be based uponenergy/sales allocation.

2. Rate Class Allocation: Allocated jurisdictional costs will be assigned to PEC'sresidential rate class (Schedules: RES, R-TOUD, and R-TOUE)


The Company will capitalize program costs in accordance with thc Company's capitalizationpolicy. The capital assets will be funded with ARRA dollars which will reduce their accountingbook basis.

Estiinated Measurement and Yerification Costs

The Company's estimated measurement and verification costs for this Program are provided inthe following table:


2011 $ 0 2012 52 2013 134 2014 60* Total $ 246

... . . . . . • Because M& V actiVllles normally Jag program admmlstrat/on actTVII/es, some portwn of M& V related costs will be incurred in a subsequent year.

Measurement and Verification Reporting Plan

PEC plans to use an independent, third-party consultant specializing in the measurement and verification of energy efficiency program impacts to provide the appropriate EM&V support. The evaluation plan designed to measure the demand and energy impacts of the Prepay Program follows:

Objectives EM&V activities will provide independent, third-party estimation of energy and peak demand savings as well as an evaluation of customer satisfaction and behavioral change leading to energy conservation. Specific objectives include the following:

• Estimate the amount of observed energy savings and peak demand reductions resulting from participation in Prepay;

• Identify the specific program-induced behaviors and efficiency measures that contribute to reductions in consumption;

• Identify Prepay clements that contribute to greater conservation effects (e.g., frequency oflow-balance alerts; presence of in-home display);

• Determine whether different subgroups of participants achieve greater levels of conservation and/or satisfaction with Prepay.

Impact Evaluation The initial impact analysis tasks will consist of sample design, data collection activities and determining analysis methodologies.

Sample Design All customers on Prepay (approximately 1 ,000) will constitute the participant sample for EM& V purposes. A control group consisting of the same number of non-participants (or a multiple of the participant count) will be selected in order to control for factors other than participation and weather that may alter energy consumption. The control group will be matched to the participant group in terms of observable characteristics, primarily monthly electricity consumption patterns.

Data Collection Data utilized for EM& V will include program databases; customer billing data, paper and electronic records of program-related transactions; weather data; and telephone survey results. Monthly billing data before and after Prepay start-up will be used for each individual customer that is either a program participant or a member of a selected control group. A complete year of


e Because MR. V activities normally lag progrant administration acrivities, some portion ofM& V related costs willbe incurred in a subsettuent year.


PEC plans to use an independent, third-party consultant specializing in the measurement andvcrilication of energy el'ficiency program impacts to provide thc appropriate EM&V support.The evaluation plan designed to measure the demand and energy impacts of the Prepay Programfollows:

ObjectivesEM&V activities will provide independent, third-party estimation of energy and peak demandsavings as well as an evaluation of customer satisfaction and behavioral change leading to energyconservation. Specific objectives include the following:

~ Estimate the amount of observed energy savings and peak demand reductions resultingfrom participation in Prepay;

~ Identify the specific program-induced behaviors and eAicicncy measures that contributeto reductions in consumption;

~ Identify Prepay elements that contribute to greater conservation effects (e.g., frequencyof Iow-balance alerts; presence of in-home display);

~ Determine whether different subgroups of participants achieve greater levels ofconservation and/or satisfaction with Prepay.

Impact EvaluationThe initial impact analysis tasks will consist of sample design, data collection activities anddetermining analysis methodologies.

Sample DesignAll customers on Prepay (approximately 1,000) will constitute the participant sample for EM&Vpurposes. A control group consisting ol'he same number of non-participants (or a multiple ofthe participant count) will be selected in order to control for factors other than participation andweather that may alter energy consumption. The control group will be matched to the participantgroup in terms of observable characteristics, primarily monthly electricity consumption pattcms.

Data CollectionData utilized for EM&V will include program databases; customer billing data, paper andelectronic records of program-related transactions; weather data; and telephone survey results.Monthly billing data before and after Prepay start-up will be used for each individual customerthat is either a program participant or a member of a selected control group. A complete year of


Prepay may be more transient than the average customer, Prepay will be open to customers who have less than a full year of billing history at their current address.

The main purpose of a control group is to ensure that any predicted savings among participants are due solely to participation in Prepay. The control group allows the statistical methods of analysis employed to remove factors leading to changes in energy use outside of program participation such as a declining economy.

Measurement and Verification Methods

Data Analysis Linear fixed effects regression (LFER) analysis will be used to estimate net energy savings due to Prepay. This analysis has been applied widely in analyzing savings for other utility programs that induce changes in customer behavior, including at Puget Sound Energy, Sacramento Metropolitan Utility District, Commonwealth Edison, and National Grid. It generates a difference-in-differences estimate of program savings. Figure 1 provides an illustration of the difference-in-differences concept and its relationship to the estimation of program savings.

In the figure, average daily consumption {ADC) of energy (k\Vh) is initially the same for program and control households, because the control group is selected explicitly to match the participant group's consumption level and patterns. Average daily consumption for program households declines after the start of the program by the amount a, + a2, but it is inappropriate to conclude that this is entirely due to the program, because other factors affecting all households, such as broad economic changes, are also in play. These other factors also affect the control households, though- as shown in the figure-and so the difference between the change in ADC over time for program households (a, + a2) and for control households (a,) is the portion of the reduction in ADC attributable to the program (that is, a2).


data is desirable to be able to evaluate changes in achieved savings levels across the seasons;however, since some customers who may be interested in Prepay may be more transient than theaverage customer, Prepay will bc open to customers who have less than a full year of billinghistory at their current address.

Thc main purpose of a control group is to ensure that any predicted savings among participantsare due solely to participation in Prepay. The control group allows the statistical methods ofanalysis employed to remove factors leading to changes in energy use outside of programparticipation such as a declining economy.


Data AnalysisLinear fixed elfects regression (LFER) analysis will be used to estimate net energy savings dueto Prepay. This analysis has been applied widely in analyzing savings I'r other utility programsthat induce changes in customer behavior, including at Pugct Sound Energy, SacramentoMetropolitan Utility District, Commonwealth Edison, and National Grid. It generates adifference-in-differences estimate of program savings. Figure I provides an illustration of thediffcrence-in-differences concept and its relationship to the estimation of program savings.

In the figure, average daily consumption (ADC) of energy (kiVh) is initially the same forprogram and control households, because the control group is selected explicitly to match theparticipant group's consumption level and patterns. Average daily consumption for programhouseholds declines after thc start of the program by the amount at + az, but it is inappropriateto conclude that this is entirely due to the program, because other factors affecting allhouseholds, such as broad economic changes, are also in play. These other factors also affect thecontrol households, though—as shown in the figure—and so the difference between the changein ADC over time for program households (at + as) and for control households (at) is theportion of thc reduction in ADC attributable to the program (that is, a2).


Provides a Difference-in-Difference Estimator of Program Savings

ADC

Program 1 ~' Households BEFORE

lXl

lX!+ ct2

Program ~~ Households AFTER

Control Households BEFORE

Control Households AFTER

az= Program Savings

The linear fixed effects regression approach to be used in the impact analysis is ideal for separately identifying the reduction amounts at and a2. Formally, letting Post1 denote a dummy variable indicating whether period tis in the post-program period, and letting Treatmentk denote a dummy variable indicating whether household k is a program household, the simplest version of the model is the following:

(1)

where Ekr is the error term. Note that the constant term is indexed by the household; this is the household's fixed effect. This model can be estimated using ordinary least squares (OLS) regression to generate an unbiased estimate of average daily savings, a2.

1

The simple LFER model described above can be expanded to include two other types of variables: those that change over time, such as weather-related variables or the participation in other energy efficiency programs, and those that are fixed over time but change across households, such as housing/household characteristics. For each of the variables that change over time, four terms are added to the model: the variable itself; the variable interacted with Treatmentk to capture differential effects of the variable due to treatment category; the variable interacted with Post1 to capture differential effects of the variable due to exogenous shocks

1 To use OLS regression the data is first de-meaned to eliminate the household-specific constants from the analysis, thereby significantly reducing the number of parameters to be estimated.

Residential Prepay Pilot Program Page 16of26

Figure 1. Fixed Effects Regression Analysis Provides a Difference-in-Difference Estimator of ProgramSavings

The linear lixed effects regression approach to be used in the impact analysis is ideal forseparately identifying the reduction amounts ai and az. Formally, letting Post, denote a dummyvariable indicating whether period t is in the post-program period, and letting Treatments denotea dummy variable indicating whether household k is a program household, the simplest versionof the model is thc following:

ADCr api + a,Post, + a,Treatment, . Post, + c„

where cn is the error term. Note that the constant term is indexed by the household; this is thehousehold's fixed effect. This model can be estimated using ordinary least squares (OLS)regression to gcncrate an unbiased estimate of average daily savings, at. I

The simple LFER model described above can be expanded to include two other types ofvariables: those that change over time, such as weather-related variables or the participation inother energy efficiency programs, and those that are fixed over time but change acrosshouseholds, such as housing/household characteristics. For each of the variables that changeover time, four terms are added to the model: the variable itself; the variable intcracted withTreatment& to capture differential effects of thc variable due to treatment category; the variableintcracted with Post, to capture differential elTccts of the variable due to exogenous shocks

'o use OLS regression thc data is first de-meaned to eliminate the household-specific constants fi om the analysis,thereby significantly reducing the number of parameters to be estimated.


· Pos/1 to capture the effect of the variable on the treatment response (that is, how the variable affects program savings). For each of the variables that do not change over time, only two terms are added to the model: the variable interacted with Post" and the variable interacted with the interaction Treatmentk · Post1•

Formally, we define W 1 as a vector of variables that change over time, where the subscript indexes the values of the variables in month t, and we define Zk as a vector of housing/household characteristics for household k. In this case, we expand our linear model to:

ADCkt =a0k +a1Post1 +a2Treatmentk ·Post,

+ /]0 W, + /]1 W, · Treatmentk + /32 W, ·Post, + /3., W, · Treatmentk ·Post,

+o0Zk ·Post, + o1Zk ·Treatment* · Post1 + ekt (2)

where the coefficients f3, and ~ denote the set of coefficients associated with the variable sets W 1

and Zk, respectively. In this model, the average daily savings (ADS) is the sum of all the terms multiplying the interaction term Treatmentk · Post1:

(3)

From the above Equation (3), average daily savings are conditional on the values of W 1 and Zk. In other words, whereas the simple LFER model allows the overall average daily savings for the program over the specified period, the expanded model aJlows analysis of how certain variables such as weather variables affect savings.

Impact of behavior changes vs. efficiency measures Customer surveys will supplement the analysis to confirm behavior changes and efficiency measures (including purchases of high-efficiency equipment installation of energy-saving measures such as attic insulation) likely to contribute to the energy and peak load reductions. By correlating these self-reported changes in the household situation with the observed energy consumption, the EM& V team may be able to isolate the savings impacts due to behavioral changes versus efficiency measures. This information may also allow for an estimation of peak load reductions-for example, due to known load shapes of air conditioner usage or from reported activities occurring during peak hours.

Persistence of savings Persistence of savings will be assessed by comparing participant consumption to the control group in the first year of the program and again at the conclusion of the program. If a participant moves residences during the program, their billing data subsequent to the move will be dropped from the analysis. However, any permanent measures performed or equipment purchased as a result of the program could be considered to provide continued savings; furthermore, persistence in behavior can be assumed if the analysis shows that conservation occurs throughout the program period, rather than just after low-balance notifications or when account balances are low. Additionally, the information on efficiency measures will provide insight into persistence


across the pre- and post-program periods; and the variable interacted with the interactionTreatment& Post, to capture the effect of the variable on the treatment response (that is, how thevariable affects program savings). For each of the variables that do not change over time, onlytwo terms are added to thc model: the variable interacted with Post„and the variable interactedwith the interaction Treatments Post,.

Formally, we define W, as a vector of variables that change over time, where the subscriptindexes the values of the variables in month t, and wc define Z& as a vector of housing/householdcharacteristics for household k. In this case, we expand our linear model to:

ADCa = aee + a, Post, + a,Treatment, Post,

+PcW, +/3 W, Treatment, +//3,W, Post, + P,W, Treatment, Post,

+b,Z, Post, +iyjZs Treatment, Post, +e„

where the coefficients P and b; denote thc set of coefficients associated with the variable sets W,and Zz, respectively. In this model, the average daily savings (ADS) is the sum of all thc termsmultiplying thc interaction term Treatments Post,:

ADS as + /I&W + diZs (3)

From the above Equation (3), average daily savings arc conditional on the values of W, and Za.In other words, whereas the simple LFER model allows the overall average daily savings for thcprogram over the specified period, the expanded model allows analysis of how certain variablessuch as weather variables affect savings.

Impact of behavior changes vs. eAiciency measuresCustomer surveys will supplement the analysis to confirm behavior changes and efficiencymeasures (including purchases of high-efficiency equipment installation of energy-savingmeasures such as attic insulation) likely to contribute to the energy and peak load reductions. Bycorrelating these self-reported changes in the household situation with the observed energyconsumption, the EM&V team may be able to isolate the savings impacts due to behavioralchanges versus elTicicncy measures. This inlormation may also allow for an estimation of peakload reductions—for example, due to known load shapes of air conditioner usage or fromreported activities occurring during peak hours.

Persistence of savingsPersistence of savings will be assessed by comparing participant consumption to the controlgroup in the tirst year of the program and again at the conclusion of the program. If a participantmoves residences during the program, their billing data subsequent to the move will be droppedfrom the analysis. Ilowevcr, any permanent measures performed or cquipmcnt purchased as aresult of the program could be considered to provide continued savings; furthermore, persistencein behavior can bc assumed if the analysis shows that conservation occurs throughout theprogram period, rather than just after low-balance notifications or when account balances arelow. Additionally, the information on efficiency measures will provide insight into persistence


"net" savings in that none of the Prepay participants could have been on the Prepay billing plan without the existence of the program. While some participants may have taken energy conserving actions or purchased high efficiency equipment anyway, the matched control group is designed to ensure that the control group can be expected to exhibit the same degree of energy conserving behavior and purchases. Thus, there is no free ridership, and no "net-to-gross" adjustment is necessary.

PEC will provide the monthly usage data required to perform the statistical bill analyses, as well as oversee the EM&V effort to ensure its timely and comprehensive execution. However, the EM&V work will be conducted by the independent consultant.

Process Evaluation The process evaluation will provide customer feedback and help to identify behaviors and measures leading to energy savings. Process evaluation will include two primary data collection activities:

• Interviews with PEC program managers and contractor staff. These interviews will confirm the evaluation team's understanding of Prepay, how it is being administered, and the unique bill payment procedures and options offered to participants. Interviews will address feedback to date from customers and initial opinions of how customers are responding.

• Participant Surveys. The participant surveys will be conducted by email/web (supplemented by telephone) for a minimum of 100 customers at the beginning, middle, and end of Prepay. The surveys have several objectives:

o Provide demographic information for use in understanding how Prepay affects different subgroups of the population (e.g., by age, income, home ownership, etc.)

o Assess customer satisfaction, including benefits of Prepay and any difficulties resulting from temporary shut-off of service

o Elicit ideas for improvements in Prepay infonnation, technology, and rules o Identify actions taken by customers to reduce electricity consumption (including

behavior changes and equipment purchases), and how prepay infonnation influenced these actions.

Measurement and Ver ification Reporting Schedule

PEC intends to file annual reports to update the Commission on program activity, including the number of participating customers and the estimated kW and kWh impact of the program. Customer surveys will begin at approximately the time of participant recruitment and will be repeated part way through Year 1 and again at the end of Prepay. The statistical billing analysis will begin after approximately six months of program implementation. A tentative schedule of EM&V activities and deliverables is provided in the table below. The timeline is subject to


since the evaluation can leverage available secondary data regarding the useful lifetimes forvarious categories of equipment and measures.

Nct savingsThe analysis inherently estimates "net" savings in that none of the Prepay participants could havebeen on the Prepay billing plan without the existence of the program. While some participantsmay have taken energy conserving actions or purchased high efficiency equipment anyway, thematched control group is designed to ensure that thc control group can be expected to exhibit thesame degree of energy conserving behavior and purchases. Thus, there is no free ridership, andno "net-to-gross" adjustment is necessary.

PEC will provide thc monthly usage data required to perform the statistical bill analyses, as wellas oversee the EM&V effort to ensure its timely and comprehensive execution. However, theEM&V work will be conducted by the independent consultant.

Process EvaluationThe process evaluation will provide customer feedback and help to identify behaviors andmeasures leading to energy savings. Process evaluation will include two primary data collectionactivities:

~ Interviews with PEC program managers and contractor staff. These interviews willconfirm the evaluation team's understanding of Prepay, how it is being administered, andthe unique bill payment procedures and options offered to participants. Interviews willaddress feedback to date from customers and initial opinions of how customers areresponding.

~ Participant Surveys. The participant surveys will be conducted by email/web(supplemented by telephone) for a minimum of 100 customers at the beginning, middle,and end of Prepay. The surveys have several objectives:

o Provide demographic information for use in understanding how Prepay affectsdifferent subgroups of the population (e.g., by age, income, home ownership, etc.)

o Assess customer satisfaction, including benefits of Prepay and any diflicultiesresulting from temporary shut-off of service

o Elicit ideas for improvements in Prepay information, technology, and ruleso Identify actions taken by customers to reduce electricity consumption (including

behavior changes and equipmcnt purchases), and how prepay informationinfluenced these actions.

Measurement and Verification Reporting Schedule

PEC intends to fllc annual reports to update the Commission on program activity, including thenumber of participating customers and the estimated kW and kWh impact of thc program.Customer surveys will begin at approximately the time of participant recruitment and will be

repeated part way through Year I and again at the end of Prepay. The statistical billing analysiswill begin afler approximately six months of program implementation. A tentative schedule ofEM&V activities and deliverables is provided in the table below. The timeline is subject to


Prepay review Q1 2012 Impact Analysis:

Selection of control group 04 2012 Conduct billing data analysis Q4 2012 Draft impact findings Ql 2013

Process Evaluation: Staff and contractor interviews Ql 2012 Customer surveys 01 2012, 04 2012 Survey data analysis Q2 2012, Q4 2012

Report QI 2013

Year 2 EM& V Schedule Activity Approximate Timcframe Full-year (12 months) analysis 02 2013 Full-lear report Q3 2013 End-of-Prepay surveys and analysis Q4 2013/Ql 2014 End-of-Prepay report Q2 2014

*

Methodologies Used to Produce Impact Estimates

Please refer to section Measurement and Verification methods which provides information regarding the methodologies used to produce impact estimates associated with this Program.

Independent Third Party Verification

Navigant Consulting is the third party entity engaged to provide EM&V services.


The allocated cost associated with the prepay program will be recovered in the annual costrecovery rider on a uniform cents per kWh basis applicable to the benefited rate classes.


change and is predicated upon regulatory approval being received that would allow for theprogram to commence no later than April 2012.

Year I EM@ V Schedule

Year 2 EM&V Schedule

Methodologies Used to Produce Impact Estimates

Please refer to section Measuremcnt and Verification methods which provides informationregarding the methodologies used to produce impact estimates associated with this Program.




The allocated cost associated with the prepay program will bc recovered in the annual cost-

recovery rider on a uniform cents per kWh basis applicable to the benefited rate classes.


PEe's proposed Residential Service - Prepay Pilot Program Schedule RPP-18 Rider (Experimental) is attached in Appendix B.

Utility Incentives

PEC is requesting the recovery of the measured and verified net lost revenues associated with

Prepay if ( l) it is ultimately determined that the pilot program was cost effective; and (2) subsequent to the final EM&V of Prepay, PEC implements Prepay as a fully-deployed EE

program after appropriate South Carolina Office of Regulatory Staffs review and Commission approval. PEC proposes to defer the recovery of Prepay's net lost revenues until such time as

EM&V results become available. For each Prepay vintage associated with the program, recoverable net lost revenues will be limited to thirty-six months. The thirty-six month term for recoverable net lost revenues will cease upon (a) the implementation of a Commission approved alternate recovery mechanism, or (b) the implementation of new rates approved by the

Commission in a general rate case or comparable proceeding to the extent the rates are set to explicitly or implicitly recover the net lost revenues associated with Prepay.

PEC is not requesting a Program Performance Incentive ("PPI") for the Prepay pilot program.


Tariffs

PEC's proposed Residential Service - Prepay Pilot Program Schedule RPP-18 Rider(Experimental) is attached in Appendix J3.

Utility Incentives

PEC is requesting the recovery of the measured and verified net lost revenues associated withPrepay if (I) it is ultimately determined that the pilot program was cost effective; and (2)subsequent to the final EM&V of Prepay, PEC implements Prepay as a fully-deployed EF.

program after appropriate South Carolina Office of Regulatory Staffs review and Commissionapproval. PEC proposes to defer the recovery of Prepay's net lost revenues until such time asEM&V results become available. For each Prepay vintage associated with the program,recoverable net lost revenues will be limited to thirty-six months. The thirty-six month term forrecoverable nct lost revenues will cease upon (a) the implementation of a Commission approvedalternate recovery mechanism, or (b) the implementation of new rates approved by theCommission in a general rate case or comparable proceeding to the extent thc rates are sct to

explicitly or implicitly recover the net lost revenues associated with Prepay.



Prepay does not strictly conform to a number of existing Commission Rules and Regulations (hereinafter referred to as "Regulations"). Therefore, as part of the process of requesting regulatory approval of Prepay, PEC hereby requests that the Public Service Commission of South Carolina ("the Commission") waive all (or specified portions) of the following existing Regulations, for the stated reasons:

Regulation l 03-321. Meter Reading. PEC requests waiver of this Regulation in its entirety. This Regulation presently states that "Unless extenuating circumstances prevent, meters shall be read and bills rendered on a monthly basis not less than twenty-eight days or more than thirty-four days. " PEC will not render traditional monthly after-the-fact paper bills to Prepay participants. Prepay participants will have the ability, through multiple means (including phone calls, email, IVR, in-home display devices, and text messaging) to view their daily charges. PEC will generate a normal bill internally for reconciliation purposes and will maintain these records in accordance with Regulation 103-311, but such bills will not be sent to the participant.

Regulation 103-339. Customer Billing. • This Regulation states "The electricaL utility shall biLl each customer as promptLy as

possible following the reading of the meter and render a receipt of payment upon request." As stated above, PEC will not be rendering traditional after-the-fact hard copy bills to Prepay participants based upon meter readings.

• PEC requests waiver of the entirety of Subsection 2, Bill Forms. As stated in the requested waiver of 103-321 above, PEC will not render traditional monthly after-thefact hard-copy bills to Prepay participants. Prepay participants will have the ability, through multiple means (see waiver of 103-321 above), to view their daily charges. Prepay participants have round-the-clock electronic access to their account and can make payments virtually instantaneously in whatever amount they desire, by phone (credit or debit card); internet (via the participant's computer or internet-enabled mobile device); or at any MoneyGram location. PEC will generate a normal bill internally for reconciliation purposes and will maintain these records in accordance with Regulation 103-311, but such bills will not be sent to the participant.

• PEC requests waiver of Subsection 5, Charges for Discontinuance and Reconnection, which states in part: " ... the electrical utility may make reasonable charges, to be approved by the Commission, for the cost incurred in discontinuing the service and reconnection and require payment for service billed and for service used which has not previousLy been billed." PEC has tariff provisions on file with and approved by the Commission reflecting such charges, but those charges will not be applicable to Prepay participants, who will not be charged for discontinuation of service or reconnection.

• PEC requests waiver of Subsection 6, Estimated Bills. This Regulation states that a ut ility "shaLl not send a customer an estimated bill, except for a good cause ... " and "In no instance will more than one estimated bill be rendered within a sixty-day


Appendix A

Request to Waive Regulations

The bill payment flexibility sought under Prepay does not strictly conform to a number ofexisting Commission Rules and Regulations (hereinafter referred to as "Regulations").Therefore, as part of the process of requesting regulatory approval of Prepay, PEC herebyrequests that thc Public Scrvicc Commission of South Carolina ("the Commission") waive all (orspecified portions) of the following existing Regulations, for thc stated reasons:

Regulation 103-321. Meter Reading.PEC requests waiver of this Regulation in its entirety. This Regulation presently statesthat "Unless extenuating circumstances prevent, me(ers shall be read and bills renderedon a monthly basis not less than twenty-eight days or more Ihan thirty four days. " PECwill not render traditional monthly after-the-fact paper bills to Prepay participants.Prepay participants will have the ability, through multiple means (including phone calls,email, IVR, in-home display devices, and text messaging) to view their daily charges.PEC will generate a normal bill internally for reconciliation purposes and will maintainthese records in accordance with Regulation 103-311, but such bills will not be sent to theparticipant.

Regulation 103-339. Customer Billing.~ This Regulation states "The electrical utility shall bill each customer as promptly as

possible following the reading of the meter and render a receipt of payment uponrequest." As stated above, PEC will not be rendering traditional after-the-fact hardcopy bills to Prepay participants based upon meter readings.

~ PEC requests waiver of the entirety of Subsection 2, Bill Forms. As stated in thercquestcd waiver of 103-321 above, PEC will not render traditional monthly after-the-fact hard-copy bills to Prepay participants. Prepay participants will have the ability,through multiple means (sce waiver of 103-321 above), to view their daily charges.Prepay participants have round-the-clock electronic access to their account and canmake payments virtually instantaneously in whatever amount they desirc, by phone(credit or debit card); internet (via the participant's computer or internet-enabledmobile device); or at any MoneyGram location. PEC will generate a normal billinternally for reconciliation purposes and will maintain these records in accordancewith Regulation 103-311, but such bills will not be sent to the participant.

~ PEC requests waiver of Subsection 5, Charges for Discontinuance and Reconncction,which states in part: "...the elec(rical utility may make reasonable charges, lo beapproved by the Commission, for the cost incurred in discon(inuing the service andreconnection and require paymen( for service billed and for service used which hasnot previously been billed. " PEC has tariff provisions on file with and approved bythe Commission reflecting such charges, but those charges will not be applicable toPrepay participants, who will not be charged for discontinuation of service orreconnection.

~ PEC requests waiver of Subsection 6, Estimated Bills. This Regulation states that autility "shall not send a customer an estimated bill, except for a good cause... " and"In no instance will more than one estimated bill be rendered within a sixty-day

itesidential Prepay Pilot Program Page 21 of 26

" As stated in the requested waiver of I 03-321 above, PEC will not render traditional monthly after-the-fact hard-copy bills to Prepay participants, for actual or estimated meter readings. Prepay participants will have the ability, through multiple means, to view their actual daily charges. Because customers will be paying in advance for service, as opposed to paying after the fact for usage already incurred, the concept of estimated bills is not applicable. It should be noted, however, that unusual circumstances such as a cellular provider experiencing a widespread outage could result in an estimated daily reading; but since the next actual daily reading will correct any inaccuracies of the previous day's estimated daily reading, this will not impact the customer's billing. In any event, PEC will not disconnect the customer's service based on an estimated reading.

Regulation 103-340. Adjustment of Bills. • PEC requests waiver of Subsection 5, which addresses Equal Payment Plans. Such

plans will not be offered to Prepay participants because, as noted before, PEC will not be rendering bills for previously-incurred usage based upon monthly meter readings. Prepay participants will, in effect, have freedom to tailor their own equal payment plan by, for instance, applying a fixed, pre-determined amount to their Prepay account at the start of each month, then tracking their daily usage to see whether it will be necessary to add an additional amount to ensure service through the first of the following month.

• PEC requests waiver of Subsection 6(c), which states: "The customer shall be allowed to pay the deficient amount, in equal installments added to the regular monthly bills, over the same number of billing periods which occurred during the interval the customer was subject to pay the deficient amount." In the event a Prepay customer is undercharged due to human or machine error, the amount of the adjustment will be applied to the customer's account, and 25% of each payment made by the customer will be allocated to the adjustment. Again, there will be no monthly bills, and because the customer directly controls how much money they apply to the account and how often, the concept of equal installments paid over the same number of months as the debt was incurred will not be applicable.

Regulation 103-342. Reasons For Denial or Discontinuance of Service. • PEC requests waiver of a portion of Subsection ( d)(2): "A customer 's bill may be

adjusted to reflect normal usage should any tampering reflect other than normal meter readings and the customer's bill may include the establishment of a deposit in accordance with the commission 's regulation 103-3 32 et seq. " The term "customer's bill" is no longer applicable because, as stated elsewhere in these waiver requests, Prepay customers will not receive a monthly hard-copy bill for usage already incurred. This subsection will be applicable to Prepay customers if the term "customer's bill" is replaced by "customer's account." PEC will not charge any security deposits to Prepay customers, even if the meter has been tampered with.

• PEC requests waiver of Subsection (g): "For nonpayment of bill for service rendered provided that the electrical utility has made reasonable efforts to effect collection and has complied with the provisions of regulation 103-352. " Again, there will be no monthly bills rendered under Prepay, nor will PEC be involved in collection activities for delinquent bills or debts arising from non-payment for energy usage previously incurred.


RegulatioPEC requests waiver of Subsection 5, which addresses Equal Payment Plans. Suchplans will not be offered to Prepay participants because, as noted before, PEC will notbe rendering bills for previously-incurred usage based upon monthly meter readings.Prepay participants will, in effect, have freedom to tailor their own equal paytnentplan by, for instance, applying a fixed, pre-determined amount to their Prepayaccount at the start of each month, then tracking their daily usage to see whether itwill be necessary to add an additional amount to ensure scrvicc through the first ofthe following month.PEC requests v'aiver of Subsection 6(c), which states: "The customer shall beallowed to pay the deficient amount, in equal installments added to the regularmonthly bills, over the saine number of billing periods which occurred during theinterval the customer was subject to pay the deficient amount. " In the event a Prepaycustomer is undercharged due to human or machine error, the amount of thcadjustment will be applied to the customer's account, and 25% of each payment madeby thc customer will be allocated to the adjustmcnt. Again, there will be no monthlybills, and because the customer directly controls how much money they apply to theaccount and how ellen, the concept of equal installments paid over the same numberof months as the debt was incurred will not be applicable.

n 103-342. Reasons For Denial or Discontinuance of Service.RegulatioPEC requests waiver of a portion of Subsection (d)(2): "A customer 's bill may beadjusted to reflect normal usage should any tampering reflect other than normalmeter readings and the customer 's bill may include the establishment ofa deposit inaccordance with the commission 's regulation l03-332 et seq.

" The term "customer'bill" is no longer applicable because, as stated elsewhere in these waiver requests,Prepay customers will not receive a monthly hard-copy bill for usage alreadyincurred. This subsection will be applicable to Prepay customers if the term"customer's bill" is replaced by "customer's account." PEC will not charge anysecurity deposits to Prepay customers, even if the meter has been tampered with.PEC requests waiver of Subsection (g): "For nonpayment ofbillfor service renderedprovided that the electrical utility has made reasonable efforts to effect collection andhas complied with the provisions of regulation l03-352." Again, there will be nomonthly bills rendered under Prepay, nor will PEC be involved in collection activitiesfor delinquent bills or debts arising from non-payment for energy usage previouslyincurred.

period... " As stated in the requested waiver of 103-321 above, PEC will not rendertraditional monthly after-the-fact hard-copy bills to Prepay participants, for actual orestimated meter readings. Prepay participants will have the ability, through multiplemeans, to view their actual daily charges. Because customers will be paying inadvance for service, as opposed to paying after the fact for usage already incurred, theconcept of estimated bills is not applicable. It should be noted, however, that unusualcircumstances such as a cellular provider experiencing a widespread outage couldresult in an estimated daily reading; but since the next actual daily reading willcorrect any inaccuracies of the previous day's estimated daily reading, this will notimpact thc customer's billing, In any event, PEC will not disconnect the customer'service based on an estimated reading.

n 103-340. Adjustment of Bills.

Residential PrePay Pilot Program Page 22 of 26

Procedures for Termination of Service. • PEC requests waiver of Subsection (a) of this Regulation in its entirety. This

subsection addresses a written notice of termination to customers subject to termination of service, to be mailed "Not less than ten (1 0) days prior to termination C?l service ... II and the required contents of that notice. Prepay participants will not receive this 1 0-day notice. Instead, they will begin receiving daily alerts 10 days before the projected day upon which their Prepay account will reach zero, via one or more electronic media of their choice (including phone calls, email, IVR, in-home display devices, and text messaging), stating how much energy remains in their account and urging them to add funds to their account to avoid service interruption. These alerts will not contain information required by Regulation 103-352(a) relative to I 0-day mailed "final notices." However, the infonnation regarding the participant's recourse to contact the ORS and the circumstances under which service to Prepay participants may be disconnected will be available on PEC's website and will be provided to all Prepay participants in the introductory materials provided to each participant. Regarding Regulation 103-352(a)(3)(a), customers who qualify as a special needs account customer will not be eligible for Prepay; however, PEC will continue to publish its procedures for termination of service on its website, which will also contain similar information relative to Prepay. The December to March disconnection moratorium (1 03-352(a)(3)(b )) for customers for whom "termination of electric service would be especially dangerous to such person 's health II will not be available to Prepay participants. PEC will, however, defer disconnections on a dayby-day basis in the event of extreme hot or cold weather (in accordance with disconnect procedures filed with the ORS in 2006), the same as with all other South Carolina PEC customers.

• PEC requests waiver of Subsection (b) of this Regulation in its entirety. This subsection states: "Not more than two business days prior to termination of service, the electrical utility shall make reasonable efforts by telephone or in person to contact the customers that are subject to termination ofservice to notify him that his service is subject to termination for non-payment. Alternatively, not more than three business days prior to termination of service, the electrical utility shall notify the customer by mail that he is subject to termination of service for non-payment. The electrical utility shall maintain records of the efforts made to contact such customers. II Prepay participants will not be contacted in the manner prescribed by Subsection (b). Instead, they will begin receiving daily alerts 10 days before the projected day upon which their Prepay account will reach zero, via one or more electronic media of their choice (including telephone), stating how much energy remains in their account and urging them to add funds to their account to avoid service interruption.

• PEC requests waiver of Subsection (c) in its entirety. This subsection requires utilities to "provide for the arrangement of a deferred payment plan to enable a residential customer to make payment by installments where such customer is unable to pay the amount due for electrical service, " and specifies how the utility shall administer such installment plans by adding a portion of the customer' s debt to future monthly bills. Deferred payment plans will not be applicable to Prepay participants because, as noted before, PEC will not be rendering monthly bills for previously-


Rcgulation 103-352. Procedures for Termination of Service.PEC requests waiver of Subsection (a) of this Regulation in its entirety. Thissubsection addresses a written notice of termination to customers subject totermination of service, to be mailed "Not less than ten (10) days prior to temninationof service..." and the required contents of that notice. Prepay participants will notreceive this 10-day notice. Instead, they will begin receiving daily alerts 10 daysbefore the projected day upon which their Prepay account will reach zero, via one ormorc electronic media of their choice (including phone calls, email, IVR, in-homedisplay devices, and text messaging), stating how much energy remains in theiraccount and urging them to add funds to their account to avoid service interruption.These alerts will not contain information required by Regulation 103-352(a) relativeto 10-day mailed "final notices." However, the information regarding theparticipant's recourse to contact the ORS and the circumstances under which serviceto Prepay participants may be disconnected will be available on PEC's wcbsite andwill be provided to all Prepay participants in the introductory materials provided toeach participant. Regarding Regulation 103-352(a)(3)(a), customers who qualify as aspecial needs account customer will not be eligible for Prepay; however, PEC willcontinue to publish its procedures I'or termination of service on its wcbsite, which willalso contain similar information relative to Prepay. The December to Marchdisconnection moratorium (103-352(a)(3)(b)) for customers for whom "terminationofelectric service would be especially dangerous to such person 's health" will not beavailable to Prepay participants. PEC will, however, defer disconnections on a day-by-day basis in the event of extrcme hot or cold weather (in accordance withdisconnect procedures filed with the ORS in 2006), the same as with all other SouthCarolina PEC customers.PEC requests waiver of Subsection (b) of this Regulation in its entirety. Thissubsection states: "Not more than (wo business days prior to termination ofservice,the electrical utility shall make reasonable effor(s by telephone or in person tocontact the customers that are subj ec( to termination ofservice to notify him that hisservice is subject to (ermination for non-payment. Alternatively, not more than threebusiness days prior to termination of service, the electrical utility shall notify thecustomer by mail that he is subject to termination of service for non-payment. Theelectrical utili(y shall maintain records of the efforts made to contact suchcustomers." Prepay participants will not be contacted in the manner prescribed bySubsection (b). Instead, they will begin receiving daily alerts 10 days before theprojected day upon which their Prepay account will reach zero, via one or moreelectronic media of their choice (including telephone), stating how much energyremains in their account and urging them to add funds to their account to avoidservice interruption.PEC requests waiver of Subsection (c) in its entirety. This subsection rcquircsutilities to "provide for the arrangement of a deferred payment plan to enable aresidential customer to make payment by installments where such customer is unableto pay the amount due for electrical service," and specifies how the utility shalladminister such installment plans by adding a portion of the customer's debt to futuremonthly bills. Deferred payment plans will not be applicable to Prepay participantsbecause, as noted before, PEC will not be rendering monthly bills for previously-

Residential Prepay Pilot Program Page 23 o(26

monthly meter readings. Because Prepay participants will pay for their usage before it is incurred, they will be protected from accumulating balances for failure to pay for previously-incurred usage. They will be able to prepay for electricity in increments that meet their financial needs or constraints, and will be able to track their daily usage and thus decide when to add an additional amount to their Prepay account to avoid service interruption.

• PEC requests waiver of the following portion of Subsection (d): " ... or to make arrangements for the satisfaction of the balance of his account through a deferred payment plan ... " As explained in the requested waiver of Regulation 103-352(c) above, PEC will not be offering deferred payment plans to Prepay participants. However, when a Prepay participant informs PEC that he is having difficulty paying enough to avoid service interruption, PEC will advise the customer that he may wish to call the local social service agency for assistance (as it presently does with all customers). This information will also be available on PEC's website and will be provided to all Prepay participants in the introductory materials provided to each volunteer participant.

• PEC requests waiver of Subsection (e), which requires the utility to "maintain a record of all deferred payment plans established with customer subject to termination for a period of two years." As explained in the waiver to Regulation 1 03-352(c) above, deferred payment plans will not be applicable to Prepay customers. However, as noted earlier, PEC does maintain customer records in accordance with the 2-year provision of Regulation l 03-311 and will continue to maintain those records for all customers, including Prepay participants. Those customer records will contain records of any deferred payment plans established before the customer enrolled in Prepay.

• PEC requests waiver of Subsection (f) in its entirety. This subsection requires utilities to "provide a copy of the termination notice to any third party identified by the customer upon establishment of the service account or at any time thereq(ter. " As explained earlier, Prepay participants will not receive written disconnect notices, but will receive daily alerts on various media of their choice for the last 10 days before the projected date upon which the balance on their Prepay account is projected to reach zero. Third-party notification of impending disconnection will not be offered in this Program. However, third parties provided with the customer's account number will be able to make payments on the customer's account from anywhere in the country, by phone (credit or debit card); or at any MoneyGram location.

• PEC requests waiver of Subsection (g), which specifies that "Electric service may be terminated only on Monday through Thursday between the hours of 8:00 a.m. and 4:00p.m., unless provisions have been made for the availability of the acceptance of payment and the reconnection of service. Electric service may not be terminated on the day preceding any day on which the electric uti/ ity 's collection offices are closed, unless provisions have been made for the availability of the acceptance of payment and the reconneclion of service. All employees of electrical utilities assigned to terminate service shall be authorized to accept payment from customers subject to termination of service or in lieu thereof at the electrical utility's option, allow such customer at least one full working day beyond the initial date set for termination the opportunity to make sati!)factory arrangements on the account at the offices of the


incurred usage based upon monthly meter readings. Because Prepay participants willpay for their usage before it is incurred, they will be protected from accumulatingbalances for failure to pay for previously-incurred usage. They will be able to prepayfor electricity in increments that meet their financial needs or constraints, and will beable to track their daily usage and thus decide when to add an additional amount totheir Prepay account to avoid service interruption.

~ PEC requests waiver of the following portion of Subsection (d): "...or to makearrangements for the satisfaction of Ihe balance of his account through a deferredpayment plan..." As explained in the requested waiver of Regulation 103-352(c)above, PEC will not be offering deferred payment plans to Prepay participants.However, when a Prepay participant informs PEC that he is having difficulty payingenough to avoid service interruption, PEC will advise the customer that he may wishto call the local social service agency for assistance (as it presently does with allcustomers). This information will also be available on PEC's website and will beprovided to all Prepay participants in the introductory materials provided to eachvolunteer participant.

~ PEC requests waiver of Subsection (e), which requires the utility to "main(ain arecord ofall deferred payment plans es(ablished with customer subject to terminationfur a period of two years." As explained in the waiver to Regulation 103-352(c)above, deferred payment plans will not be applicable to Prepay customers. However,as noted earlier, PEC does maintain customer records in accordance with the 2-yearprovision of Regulation 103-311 and will continue to maintain those records for allcustomers, including Prepay participants. Those customer records will containrecords of any deferred payment plans established before thc customer enrolled inPrepay.

~ PEC requests waiver of Subsection (f) in its entirety. This subsection requiresutilitics to "provide a copy of the (ermination notice to any Ihird party identified bythe cus(orner upon establishmen( of the service accourrt or a( any time thereafter."As explained earlier, Prepay participants will not receive written disconnect notices,but will receive daily alerts on various media of their choice for thc last 10 daysbefore the projected date upon which thc balance on their Prepay account is projectedto reach zero. Third-party notification of impending disconnection will not be offeredin this Program. I-lowever, third parties provided with the customer's account numberwill be able to make payments on thc customer's account from anywhere in thecountry, by phone (credit or debit card); or at any MoneyGram location.

~ PEC rcqucsts waiver of Subsection (g), which specifies that "Electric service may beter(nina(ed only on Monday through Thursday between (he hours of 8(00 a.m. and4(00 p.m., unless provisions have been made for the availability of the acceptance ofpayment and the reconnec(ion of service. Electric service may not be terminated onIhe day preceding any day on which the electric utility 's collection offices are closed,unless provisions have been made for the availability of the accep(ance ofpaymentand (he reconnec(ion of service. All employees of electrical utilities assigned toterminate service shall be authorized (o accept payment porn customers subj ec( totermination of service or in lieu thereof, a( the elec(rical utility's op(ion, allow suchcirstomer a( least one full working day beyond the initial da(e setfor termination (heopportunity to make satisfactory arrangements on the account at Ihe offices of the


" Prepay partiCipants will be automatically disconnected at approximately I 0 a.m. when a negative balance exists, regardless of the day of the week, holidays, etc. Prepay participants have round-the-clock electronic access to their account and can make payments virtually instantaneously in whatever amount they desire, by phone (credit or debit card); internet (via the participant's computer or internet-enabled mobile device); or at any MoneyGram location. Because there will be no need for a utility employee to visit the premise when service is disconnected, the requirement for employees to accept payment from Prepay participants (or grant them an extra day to make payment) will not be applicable.


electrical utility..." Prepay participants will be automatically disconnected atapproximately l0 a.m. when a negative balance exists, regardless of the day of theweek, holidays, etc. Prepay participants have round-the-clock electronic access totheir account and can make payments virtually instantaneously in whatever amountthey desire, by phone (credit or debit card); internet (via thc participant's computer orinternet-enabled mobile device); or at any MoncyGram location. Because there willbe no need for a utility employee to visit the pretnise when service is disconnected,thc requirement for employees to accept payment from Prepay participants (or grantthem an extra day to make payment) will not be applicable.

Residential Prepay Pilot Program Page 25 of'26

B

PEC' s proposed Residential Service - Prepay Pilot Program Schedule RPP-18 Rider (Experimental) ("Tariff')


Attpendlx 11

PEC's proposed Residential Service - Prepay Pilot Program Schedule RPP-18 Rider(Experimental) ("Tariff ')


Power & Light Company d/b/a Progress Eneq,,'Y Carolinas, Inc. EXPERIMENTAL (South Carolina Only)

AVAILABILITY

RESiDENTIAL SERVICE - PREPAY PILOT PROGRAM SCHEDULE RPP-18

This Schedule is available at Company's sole option on an experimental basis to a maximum of I ,000 residential customers, in South and North Carolina combined, in designated areas where Company offers prepaid billing service. Designated areas include Florence (zip codes: 29501, 29505). The electric service provided to Customer is to be used for domestic purposes in and about a residential dwelling unit, including electric service used on a farm and in the preparation of the farm's products for market. A residential dwelling unit served under this Schedule may be used as a boarding house, fraternity house, tourist home, or like establishment, provided such residential dwelling unit is one which ordinarily would be used as a private residence.

Service under this Schedule is not available: (I) for processing (or handling) for market of farm products produced by others; (2) for separately metered domestic or farm operations; (3) for individual motors in excess of 10 HP (in exceptional cases, motors as large as 15 HP may be served upon approval by the Engineering Department); (4) for commercial or industrial purposes; (5) in conjunction with Residential Service Energy Conservation Discount Rider RECD, Meter-Related Optional Programs Rider MROP. or Net Metering for Renewable Resource Rider NM; (6) for Customer with special termination codes limiting service termination, including but not limited to households utilizing medical life support equipment and households qualifying for the December-March winter moratorium on service termination; (7) to Customer who has designated a third party to receive notification of any pending termination notices; (8) in those areas where Company does not offer prepaid power service; (9) for Customer with greater than one month arrearage at the time of application; (I 0) for service in conjunction with Company's non-regulated products or services; ( II) for service in conjunction with Area Lighting Service Schedule ALS; (12) for other uses not specifically provided for by the provisions herein; or (13) for resale service. This Schedule is also not available to residents served under a Landlord Agreement. Customer may not participate in the Equal Payment Plan, bank draft program, e-bill program, or an installment payment plan whi le participating under this Schedule.

This Schedule is avai lable to customers served under the Residential Service Load Control Rider LC-SUM with applicable billing credits being applied to the prepay account. Service under this Schedule shall terminate on December 31, 2014, unless extended or tenninated by order of the Public Service Commission of South Carolina.

APPLICABILITY

This Schedule is applicable to all electric service of the same available type supplied to Customer's premises at one point of delivery through one prepaid metering system.

TYPE OF SERVICE

The types of service to which this Schedule is applicable are altemating current, 60 hertz, single-phase 3 wires at Company's standard voltages of 120/240 volts served from a self-contained meter base of 200 amperes with metering capable of rendering prepaid service.

MONTHLY AND DAILY RATES

A. Basic Facilities Charge: $6.50 per month ($0.21355 per day)

RPP-18 Sheet I of3

Carolina Power & Light Company d/b/aProgress Energy Carolinas, Inc.(South Carolina Only)

EXPERIMENTAL

RESIDENTIAL SERVICE - PREPAY PILOT PROGRAMSCI IEDULE RPP-18

AVAILABILITY

This Schedule is available at Company's sole option on an experimental basis to a maximum of 1,000residential customers, in South and North Carolina combined, in designated areas where Company offersprepaid billing service. Designated areas include Florence (zip codes: 29501, 29505). The electric serviceprovided to Customer is to be used for domestic purposes in and about a residential dwelling unit, includingelectric service used on a I'arm and in the preparation of the farm's products for market. A residentialdwelling& unit served under this Schedule may be used as a boarding house, fraternity house, tourist home, orlike establishment, provided such residential dwelling unit is one which ordinarily would be used as aprivate residence.

Service under this Schedule is not available: (I) for processing (or handling) for market of farm productsproduced by others; (2) for separately metered domestic or farm operations; (3) for individual motors inexcess of 10 HP (in exceptional cases, motors as large as 15 HP may be served upon approval by theEngineering Department); (4) for commercial or industrial purposes; (5) in conjunction with ResidentialService Energy Conservation Discount Rider RECD, Meter-Related Optional Programs Rider MROP, orNet Metering for Rcncwablc Resource Rider NM; (6) for Customer with special termination codes limitingservice termination, including but not limited to households utilizing medical life support equipmcnt andhouseholds qualilying for the December-March winter moratorium on service termination; (7) to Customerwho has designated a third party to receive notification of any pending termination notices; (8) in thoseareas where Company does not offer prepaid power service; (9) for Customer with grcatcr than one montharrearage at the time of application; (10) for service in conjunction with Company's non-regulated productsor services; (11) for scrvicc in conjunction with Area Lighting Service Schedule ALS; (12) for other usesnot specifically provided for by the provisions herein; or (13) for resale service. This Schedule is also notavailable to residents served under a Landlord Agreement. Customer may not participate in the EqualPayment Plan, bank draII program, e-bill program, or an installment payment plan while participating underthis Schedule.

This Schedule is available to customers scrvcd under thc Rcsidcntial Service Load Control Rider LC-SUMwith applicable billing credits being applied to the prepay account. Service under this Schedule shallterminate on December 31, 2014, unless extended or terminated by order of the Public Service Commissionof South Carolina.

~P

PI .

!CA B I I. IT Y

This Schedule is applicable to all electric service of the same available type supplied to Customer's premisesat one point of delivery through one prepaid metering system.

TYPE OF SERVICE

The types of service to which this Schedule is applicable are alternating current, 60 hertz, single-phase 3

wires at Company's standard voltages of 120/240 volts served from a self-contained meter base of 200amperes with metering capable of rendering prepaid service.


A. Basic Facilities Charge: $6.50 per month ($0.2/355 per dayj

RPP-18 Sheet I of 3

Period of July -October Billing Period of November - June

9.868¢ per kWh 9.349¢ per kWh

C. Other Charges:

In the event Customer receives service under Street Lighting Service (Residential Subdivisions) Schedule SLR, such monthly charges, plus applicable SC Franchise Tax, shall be divided by 30.4, rounded to 5 significant digits, and billed on a daily basis consistent with the billing of the Basic Facil it ies Charge.

D. Monthly Reconc iliation:

Monthly billing will be calculated using the above rates and conventional bill ing practices. Following calculation of the monthly bill, an adjustment will be made to the prepay account for any difference between the calculated monthly bill and the bill calculated at the daily rates stated above.

FUEL AND DSM/EE ADJUSTMENT

Fuel and related environmental costs as set fotth in Rider No. 39B and demand side management and energy efficiency costs as set forth in Rider DSM/EE-3 are included in the above charges and are subject to adjustment by order of the Public Service Commission of South Carolina. The rates applicable under Rider DSM/EE-3 are provisional and are therefore subject to true-up with interest upon further review by the Office of Regulatory Staff and the Public Service Commission ofSouth Carolina.

SALES AND FRANCHISE TAX OR PAYMENT IN LIEU THEREOF

To the above charges will be added any applicable South Carolina sales tax, and for those customers within any municipal or other local governmental jurisdiction, an appropriate amount to reflect any franchise fee, business license tax, or similar percentage fee or tax, or charge in lieu thereof imposed by such entity.

PAYMENTS AND BILLING

Prepaid electric service shall be purchased only at locations designated by Company. Customer is responsible for any fees or other charges a<;sociated with the selected payment option. Payments will be accepted at all MoneyGram locations. Payments may also be made via credit or debit card, for single or recurring payments, via telephone. the internet or an internet-enabled mobile device; however, a $1 per transaction fee will be immediately deducted by Company for payments using credit or debit cards. If service has been disconnected, Customer must purchase a minimum of 2 days of power, based upon Customer's average consumption, to have service restored. Reconnection of service is expected within no greater than 2 hours of receipt of payment when using these payment options.

C ustomer should not utilize other payment methods, including but not limited to paystations, EasyPay or US Postal Service, as such methods will cause substantial delays in posting payments to Customer's meter and may result in disconnection until the payment posts.

If Customer incurs a charge, including but not limited to an outstanding balance following disconnection or a Service Charge, it will be immediately deducted from Customer's payment.

In the event Customer has an indebtedness with Company for electric service previously provided, twentyfive percent (25%) of payments w ill be applied to any arrearage that exists at the time prepay service is initiated until the indebtedness is satisfied. In the event Customer has an electric service deposit with Company at the time Customer elects to take service under this Schedule, the deposit, plus interest, shall be posted to the prepaid account once all outstanding indebtedness for prior service is satisfied, unless otherwise directed by Customer.

RPP-18 Sheet 2 of3

B. Kilowatt-Hour Charge:

Billing Period ofJuly —OctoberBilling Period of November- June

9.868il per kWh9.3495 per kWh

C. Other Charges:

In the event Customer receives service under Street Lighting Service (Residential Subdivisions)Schedule SLR, such monthly charges, plus applicable SC Franchise Tax, shall be divided by 30.4,rounded to 5 significant digits, and billed on a daily basis consistent with thc billing of the BasicI'acilities Charge.

D. Monthly Reconciliation:

Monthly billing will be calculated using the above rates and conventional billing practices.Follovving calculation of the monthly bill, an adjustment will be made to the prepay account for anydifference between thc calculated monthly bill and the bill calculated at the daily rates stated above.


Fuel and related environmental costs as set forth in Rider No. 39B and demand side management and energyefliciency costs as set forth in Rider DSM/EE-3 are included in the above charges and are subject toadjustment by order of the Public Service Commission of South Carolina. The rates applicable under RiderDSM/EE-3 are provisional and are therefore subject to true-up with interest upon further review by theOffice of Regulatory Staff and thc Public Service Commission of South Carolina.


To the above charges will be added any applicable South Carolina sales tax, and for those customers withinany municipal or other local govermnental jurisdiction, an appropriate amount to reflect any franchise fee,business license tax, or similar percentage fee or tax, or charge in lieu thereof imposed by such entity.

PAYMEN'I'S AND BILI.ING

Prepaid electric scrvicc shall be purchased only at locations designated by Company. Customer isresponsible for any fees or other charges associated with the selected payment option. Payments will beaccepted at all MoncyGram locations. Payments may also bc made via credit or debit card, for single orrecurring payments, via telephone, the internet or an intcmct-enabled mobile device; however, a $ 1 pertransaction fee will be immediately deducted by Company for payments using credit or debit cards. Ifservice has been disconnected, Customer must purchase a minimum of 2 days of power, based uponCustomer's average consumption, to have service restored. Reconnection of service is expected within nogreater than 2 hours of receipt of payment when using these payment options.

Customer should not utilize other payment methods, including but not limited to paystations, EasyPay or USPostal Service, as such methods will cause substantial delays in posting payments to Customer's meter andmay result in disconnection until the payment posts.

If Customer incurs a charge, including but not limited to an outstanding balance following disconnection ora Service Charge, it will bc immediately deducted from Customer's payment.

In the event Customer has an indebtedness with Company for electric service previously provided, twenty-five percent (25'/o) of payments will be applied to any arrearage that exists at the time prepay service is

initiated until thc indebtedness is satisfied. In the event Customer has an electric service deposit withCompany at the time Customer elects to take service under this Schedule, the deposit, plus interest, shall beposted to the prepaid account once all outstanding indebtedness for prior service is satisfied, unlessotherwise directed by Customer.

RPP-18 Sheet 2 of 3

AND RECONNECTION OF SERVICE

At such time as the value of the electric service consumed equals or exceeds the prepaid purchases, electric service will be disconnected by the prepaid metering system until additional purchases are made. Disconnection will occur at approximately I 0:00 a.m. when a negative balance exists and may occur on holidays or weekends. Daily charges associated with the Basic Facilities Charge and Schedule SLR, if applicable, will continue to accrue during the period of service disconnection and will be immediately deducted from the next payment.

CONTRACT PERIOD

The initial Contract Period for service under this Schedule shall be for thirty (30) days. A customer may request termination of service under this payment option at any time following expiration of the initial Contract Period with any outstanding payment balance being refunded after all indebtedness is satisfied.

REAL TIME USAGE INFORMATION AND IN-HOME DISPLAYS

Consumption, billing information and other corporate communications such as bill inserts will be communicated via an internet/web portal, electronic mail messages, text messages, and telephone, as appropriate and designated by Customer. Upon request, an optional in-home display device will be available at no charge to the first 250 customers requesting this device in lieu of other methods of contact. Customer shall select one or more alert notifications regarding program notices, payment notices or balance notices via their designation communication option(s). Company will not mail or deliver regular monthly bill payment and consumption information to Customer.

[n the event the in-home display device is damaged by acts of Customer or others, Customer shall pay a replacement charge of $190. Correspondingly, if Company requests and Customer fails to return the inhome display device to Company at such time as Customer discontinues receiving service under this Schedule, Customer shall also pay a charge of $190 to Company. Company reserves the right, in its sole discretion, to transfer ownership of the device to Customer at the end of the pilot.

GENERAL

Service rendered under this Schedule is subject to the provisions of the Service Regulations of Company on file with the Public Service Commission of South Carolina. The Public Service Commission of South Carolina has waived the application of certain Regulations regarding meter reading, disconnection of service, bill presentation and notice requirements due to the unique nature of Prepay. In case of conflict between any provisions of this Schedule and the Service Regulations, the provisions of this Schedule and the Commission waiver of its Regulations shall apply.

Effective for prepaid service and purchases on and after----~ 2012 SCPSC Docket , Order No. ___ _

RPP-18 Sheet 3 of3

DISCONNECTION AND RECONNECTION OF SERVICE

At such time as thc value of the electric service consumed equals or exceeds the prepaid purchases, electricservice will be disconnected by the prepaid metering system until additional purchases are made.Disconnection will occur at approximately 10:00 a.m. when a negative balance exists and may occur onholidays or weekends. Daily charges associated with the Basic Facilities Charge and Schedule SI.R, ifapplicable, will continue to accrue during the period of service disconnection and will be immediatelydeducted from the next payment.

CONTRACT PERIOD

The initial Contract Period for service under this Schedule shall be for thirty (30) days. A customer mayrequest termination of scrvicc under this payment option at any time following expiration of the initialContract Period with any outstanding payment balance being refunded after all indebtedness is satisfied,


Consumption, billing information and other corporate communications such as bill inserts will becommunicated via an internet/web portal, electronic mail messages, text messages, and telephone, asappropriate and designated by Customer. Upon request, an optional in-home display device will bcavailable at no charge to thc first 250 customers requesting this device in lieu of other methods of contact.Customer shall select onc or more alert notifications regarding program notices, payment notices or balancenotices via their designation communication option(s). Company will not mail or deliver regular monthlybill payment and consumption information to Customer.

In thc event the in-home display device is damaged by acts of Customer or others, Customer shall pay areplacement charge of $ 190. Correspondingly, if Company requests and Customer fails to return the in-home display device to Company at such time as Customer discontinues rccciving service under thisSchedule, Customer shall also pay a charge of $ 190 to Company. Company reserves the right, in its solediscretion, to transfer ownership of the device to Customer at the end of the pilot.

GENERAL

Service rendered under this Schedule is subject to the provisions of the Service Regulations of Company onfile with the Public Service Coinmission of South Carolina. The Public Service Commission of SouthCarolina has waived the application of certain Regulations regarding meter reading, disconnection ofservice, bill presentation and notice requirements due to the unique nature of Prepay. In case of conflictbetween any provisions of this Schedule and the Service Regulations, the provisions of this Schedule andthe Commission waiver of its Regulations shall apply.

Effective for prepaid service and purchases on and af'ter

SCPSC Docket , Order No.,2012

RPP- I 8 Sheet 3 of3

Attachment 2

Redlined Changes

COVER PAGE

SCPSC 2009-190-E

Program Name: Residential Prepay Pilot Program (Experimental)



Target End-uses: All Residential Electric End-Uses Can Be Affected By This Program

Duration: Approval date - December 31, 2014

In accordance with the Public Service Commission of South Carolina's ("SCPSC" or "the Commission") June 26, 2009 Order No. 2009-373 issued in Docket No. 2008-151-E, Progress Energy Carolinas, Inc. ("PEC") respectfully submits the attached request for approval of the exper imental Residential Prepay Pilot Program ("Prepay").

Program Description

The primary objectives of Prepay arc to measure and validate the achieved energy and capacity savings resulting from offering customers a prepaid payment option, and to better understand the drivers and persistence behind the associated energy savings. Similar programs report energy savings from 10% - 15%. The Prepay Pilot will also help PEC to determine the market for Prepay, examine customer behavior while on Prepay, determine customer motives, and evaluate customer preferences regarding payment channels and communication methods.

Consideration to be Offered

Participants will have access to a web portal and ability to make cash payments prior to consumption of electricity. Participants will not be charged a security deposit, disconnect fees, or reconnect fees; and will have access to multiple self-selected communication channels, including phone calls, email, integrated voice response (fVR), and text messaging to schedule notilications or alerts regarding their usage and account balance. In addition, up to 250 in-home displays will be available to participants on a first come, first served basis.

Residential Prepay Pilot Program Page I of26

PEC DSM/EE PROGRAM APPROVAL REQUEST

COVER PAGE

SCPSC 2009-190-E

Program Name: Rcsidcntial Prepay Pilot Program (L'xpcrimcntal)

Program Type: Fncrgy Efliciency


Target End-uses: All Residcmial Elcctrio End-Uses Can Be AtTcctcd By This Program

Duration: Approval date - December 31, 2014

In accordance with thc Public Service Commission of South Carolina's ("SCPSC" or "thcCommission") June 26, 2009 Order No. 2009-373 issued in Docket No. 2008-151-E, ProgressEnergy Carolinas, Inc. ("PEC") respectfully submits the auachcd rcqucst for approval ol'hecxpcrimcntsl Resideniial Prepay Pilot Program ("Prepay").

Program Description

The primary objectives of Prepay arc to measure and validate the achieved cncrgy and capacitysavings resulting from offering customers a prepaid payment option, and to bener understand thcdrivers and persistencc behind the associated energy savings. Similar programs report energysavings I'rom 10% - 15%. The Prepay Pilot will also help PEC to dctcrmine the market forPrepay, examine customer behavior while on Prepay, dctcrmine customer motives, and cvaluatccustomer preferences regarding payment channels and communication meihods.

Consideration to be Ofl'crcd

Participants will haec access to a wcb portal and ability to make cash payments prior toconsumption of electricity. Participants will not bc charged a security deposit, disconnect fccs,or reconnect fees; and will have access to multiple sell'-selcctcd communication channels,including phone calls, email, intcgruted voice response (IVR), and text mcssaging to schcdulcnotifications or alerts regarding their usage and account balance. In addition, up to 250 in-homedisplays will be available to participants on a first come, first served basis.

Reardemtat Prepay Piler Program P geiafse

Cost of the Program (4-Year Summa ry)

Year A RRJ\ PEC General Funds Totals ($000) ($000) ($000)

2011 $885 $ 0 $ 885 2012 2,046 0 2,046 2013 405 ~324 729 2014 0 424 424 Total $ 3,336 $ 6477.±~ $ 4,084

Proposed Funding

Prepay costs will be funded from a Department Of Energy ("DOE") designated American Recovery and Reinvestment Act ("ARRA") grant for the period of February 2011 - April 2013. All remaining costs eligible for recovery will be funded from PEC' s general funds. These remaining costs will be subject to cost recovery through a DSM/EE annual cost-recovery rider consistent with the Commission' s Ruling in Docket No. 2008- 151-E.

Residcnual Prepay Pilot Program Page 2 of26

Total Cost of the Prugram (4-Year Summary)

Proposed Funding

Prepay costs will be funded 1'rom a Department Of Energy ("DOF.") designated AmericanRccovcry und Reinvcstmcnt Act ("ARRA") grant for the period of February 2011 — April 201 3.All remaining costs eligible for recovery will be funded from PEC's general funds. Theseremaining costs will be subject to cost recovery through a DSM/FE annual cost-recovery riderconsistent with thc Commission's Ruling in Docket No. 2008-15(-E.

Residential Prepay Pilot Program Page 2 ol'26

Pilot Program

Contents Program Description ........................................................................•............................................................ 5

Program Objective ..................................................................................................................................... 8

Program Duratlon ...................................................................................................................................... S

Targeted Sector and Eligibi lity Requirements ........................................................................................... 8

Communication Costs and Examples ........................................................................................................ 9

Estimated Number of Participants ............................................................................................................ 9

Program Impacts ....................................................................................................................................... 9

Other Relevant Information .................................................................................................................... 10

Additionallnformation ................................................................................................................................ 10

Proposed Market ing Plan ........................................................................................................................ 10

Market Potential and Estimated Market Growth ................................................................................... 10

Estimated Summer and Winter Peak Demand Reductions ..................................................................... 10

Estimated Energy Reduction ................................................................................................................... 10

Estimated Lost Energy Sales .................................................................................................................... 11

Estimated Load Shape Impacts ........................... .................................................................................... 11

Costs and Benefits ....................................................................................................................................... 11

Tot al and Per Unit Cost and Benefit ........................................................................................................ 11

Participation lncentives ........................................................................................................................... 12

Service Limitations or Condit ions Imposed on Non-Partlcipants ............................................................ 12

Cost-Effectiveness Evaluation ..................................................................................................................... 12

Integrated Resource Plan ............................................................................................................................ 12


Estimate of Avoided Capacity and Energy Costs ..................................................................................... 13

Estimate of Participation Incentives .................. ..................................................................................... 13

Cost Allocation ........................................................................................................................................ 13

Proposed Capitalization Period for Long Lived Program Costs ............................................................... 13

Estimated Measurement and Verification Costs ............................................................................ 13~

Measurement and Verification Reporting Plan ........................................................................................... 14

Residential Prepay l'alot l'rogram Page 3 of26


ContentsProgram Description

Program Objective...

Program Duration.

Targeted Sector and Eligibility Requirements..

Communication Costs and Examples.

Estimated Number of Participants..

Program Impacts ..

Other Relevant Information..

Additional Information ...

Proposed Marketing Plan...

Market Potential and Estimated Market Growth.

Estimated Summer and Winter Peak Demand Reductions...

Estimated Energy Reduction.

Estimated Lost Energy Sales..

Estimated Load Shape Impacts ..

Costs and Benefits..

Total and Per Unit Cost and Benefit...

Participation Incentives...

Service Umitations or Conditions imposed on Non-Participants.....

Cost-Effectiveness Evaluation ...

Integrated Resource Plan.

Cost Recovery Mechanism ..

Estimate of Avoided Capacity and Energy Costs ..

Estimate of Participation Incentives ...

Cost Agocatlon ...

Proposed Capitalization Period for Long Lived Program Costs ...

Estimated Measurement and Verification Costs.

Measurement and Verification Reporting Plan...

..10

..10

..10

..10

..10

..10

.,12

.....„12

..12

..12

..12

..13

..13

..13

..13

..14


Schedule ............................................................................... 18

Methodologies Used to Produce Impact Estimates ................................................................................ 19

Independent Third Party Verification ...................................................................................................... 19


Tariffs ........................................................................................................................................................... 20

Utility lncentives .......................................................................................................................................... 20

Appendix A .............................................................................................................................................. 21

Rcs1dcntial Prepay Pilot Program Page 4 of26

Measurement and Verification Methods...

Measurement and Verification Reporting Schedule.

Methodologies Used to Produce Impact Estimates..

Independent Third Party Verification...

Cost Recovery Mechanism ..

Tariff..

Utility Incentives.

Appendix A,.....

..15

..18

..19

..19

..19

..20

..20

...21

Rcsrdcntial Prepay Pilot Program Page aof26

Prepay arc to measure and validate the achieved energy and capacity savings resulting from offering customers a prepaid payment option, and to better understand the drivers and persistence behind the associated energy savings. Similar programs report energy savings from 10% - 15%. The Prepay Pilot will also help PEC to determine the market for Prepay, examine customer behavior while on Prepay, determine customer motives, and evaluate customer preferences regarding payment channels and communication methods.

1\s an alternative to a monthly bill with a pre-determined payment due date, Prepay allows a customer to deposit a lump sum into an account where charges arc deducted in real time as energy is consumed. As the account balance diminishes, customers may deposit additional funds to continue consuming energy with no break in service.

Prepay is limited to no more than 1,000 customers who meet eligibility requirements. Areas selected are: Raleigh, NC (zip codes: 2760 I, 27603, 27606, 27609, 2761 0), Fayetteville, NC (~ip codes: 283 II , 28303), Spring Lake, NC (Lip codes: 28390), Jacksonville, NC (zip codes: 28540, 28546), and Florence, SC (zip codes: 2950 I , 29505). The 7.ip codes selected contain a wide variety of customer segmentation types. This will allow PEC to gather data and understand the segments of customers who may choose to enroll in Prepay to help benefit the company in the design of a potential long-term program. Ideally, up to 250 participants in each area will elect to enroll in Prepay. However, if an area does not provide 250 participants in a timely manner, participation may be increased in other selected areas.

Implementation Eligible customers will be solicited initially via direct mail and email to explain Prepay and provide information on how to enroll. Customers interested in participating in Prepay will be verified for eligibility. surveyed at enrollment (to be used later for Evaluation. Measurement and Yeritication ("EM& Y")), and provided education on Prepay so that customers fully understand how Prepay operates.

Participants will receive a new meter with advanced capabilities including remote connect/disconnect and daily automated meter reads utilizing a 2-way communication nct\vork. The customer will not need to be home in order for the meter to be installed. A welcome package will be left at the customer's home to provide information on Prepay, payment locations, and to notify the customer that the meter has been exchanged. This information will also he available for the customer to view via the web portal program detail page.

The transition of existing customers to Prepay billing will require a final post-pay bill for all usage up to the date of the transition and the corresponding meter exchange. A ftcr the due date tor this final bill, any deposit, plus interest, that is held will be used against any arrears with the balance being applied as a credit to the Prepay account. If the account still has an arrearage, the arrears will be applied to the Prepay account along with any late payment or other charges that might be applicable. Twenty-five percent (25%) of each future prepayment will be applied to the

Residential Prepay Pilot Program PageS of26

Program Description

OverviewThe primary objectives of Prepay arc to measure and validate the achieved energy and capacitysavings resulting from offering customers a prepaid payment option, and to bcttcr understand thedrivers and persistcncc behind the associated cncrgy savings. Similar programs rcport energysavings from 10% - 15%. The Prepay Pilot will also help PEC to dctcrminc the market forPrepay, examine customer behavior while on Prepay, determine customer motives, and cvaluatccustomer prcfcrences regarding payment channels and communication methods.

As an alternative to a monthly bill with a prc-determined payment duc date. Prepay allows acustomer to dcposii a lump sum into an account where charges arc deducted in real time asenergy is consumed. As the account balance diminishes, customers may deposit additional fundsto continue consuming energy wiih no break in service.

Prepay is limited to no morc than 1,000 customers who meet eligibility rcquircmcnts. Areasselected are: Raleigh, NC (zip codes; 27601, 27603, 27606, 27609, 27610), I'aycttcville, NC (zipcodes: 28311, 28303), Spring Lake, NC (zip codes: 28390), Jacksonville, NC (zip codes: 28540,28546), and lllorence, SC (zip codes: 29501, 29505). The zip codes selected contain u widevariety of customer segmentation types. This will allow PEC to gather data and understand thcsegments of customers who may choose to enroll in Prepay to help bcneiit thc company in thedesign of a potential long-term program. Ideally, up to 250 panicipants in each arcs will elect toenroll in Prepay. However, if an area does not provide 250 panicipants in a timely manner,

participation may bc incrcascd in other sclccted areas.

ImplementationFligiblc customers will be solicited initially via direct mail and email to explain I'repay andprovide information on how to enroll. Customers intercstcd in participating in Prepay will bcverified for eligibility, survcycd at cnrollmcnt (to bc used later ior Fvaluation, Mcasurcmcnt andVerification ("EM&V")), and provided education on Prepay so that customers fully understandhow Prepay opcratea

Participants will receive a new meter with advanced capabilities including remoteconnect/disconnect and daily automated meter reads utilizing a 2-way communication network.The customer will not nccd to be home in order for thc meter to bc installed. A welcomepackage will bc leg at thc customer's home to provide information on Prepay, paymentlocations, and to notify the customer that thc meter has bean exchanged. This inlormation willalso he available for thc customer to view via the wcb portal program detail page.

Thc transition of existing customers to Prepay billing will require a linal post-pay bill for all

usage up to thc date of'thc transition and thc corresponding meter exchange. Aller the due datefor this linal bill, any deposit, plus interest, that is held will be used against any arrears with thcbalance being applied as a credit to the I'repay account. If the account still has an arrearage, thearrears will bc applied to the Prepay account along with any late payment or other charges thatmight bc applicable. Twenty-five percent (25%) of each future prepayment will be applied to the

Rosidemiut Prepay Pilot Program Paso 5 Ilf 26

If initial service is requested under Prepay, any one-time service charges or other charges must be paid up-front to initiate service.

Prepay participants will not receive paper bills or paper communications throughout the program. Participants will be provided with a choice of multiple communication channels, including a specially designed web portal, which may be accessed via a smart phone, cmails, text messages, phone calls, or an optional in-home display device (described below), all of which are self-selected by the customer. These communications provide the customer ways to monitor daily usage shown in number of days of power remaining, dollars remaining, and kWh remaining. Additional account history information is available via the web portal such as a graph showing hourly interval usage, payments made, etc. Participants may access the web portal 7 days a week, 24 hours a day and may set preferences for the type of communications they wish to receive. At least one alert type is mandatory; however, the customer may select multiple (or all) types if so desired. Once participants have selected their preferred communication channcl(s), they will then receive any Prepay notifications, payment notifications, and balance notifications via their preferred channel(s).

Up to 250 in-home displays will be provided to Prepay participants on a first come, first served basis. Customers may request a display or may be offered one if they do not have access to internet service, email or a mobile device. There is no charge for the in-home display to the customer during Prepay. In-home displays will not provide payment options, but will display usage information, including daily, weekly, and monthly usage (kWh), and electric balance remaining in days and dollars (based on the customer's average daily use). Participants who elect to receive an in-home display will receive it as part of the welcome package when the Prepay meter is installed. The in-home display will go through a process to "join" it to the meter by PEC meter personnel before providing it to the customer. Upon receipt of the device, the customer simply plugs it in to any household outlet to start receiving information. In the event the in-home display device is damaged by acts of the customer or others, the customer shall pay a replacement charge. Correspondingly, if the customer fails to return the in-home display device to the company when the customer discontinues receiving service before conclusion of the Prepay pilot, the replacement cost shall be charged to the customer. The Company reserves the right to transfer ownership of the device to the customer at the end of the Prepay pilot.

Prepay participants will be able to make payments using a variety of channels. As long as there is a positive account balance, no minimum payment amount is required; so, customers may choose a payment frequency and amount that work best for them based on their lifestyle preferences. The customer should not utilize payment methods other than those included as part of the Prepay program, as referenced in the Residential Service - Prepay Pi lot Program Schedule RPP-18 Rider (Experimental) (''Tariff'') and attached in Appendix B, as such methods will cause substantial delays in posting payments to Prepay and may result in disconnection until the payment posts. In the event of extreme weather moratorium, customers will be notified via their preferred communication channel when the event starts and ends. Disconnects will resume at the daily set time the day after the moratorium is lifted. A minimum payment based on the customer's average usage, is required to reconnect a disconnected account. The customer is responsible for

Residential Prepay Pi l111 Program Page6 of26

arrears amount until it is paid in I'ull. If initial service is requested under Prepay, any one-timeservice charges or other charges must bc paid up-front to initiate service.

Prepay participants will not receive paper bills or paper communications throughout theprogram. Participants will be provided with a choice of multiple communication channels,including a specially designed web portal, which may be acccsscd via a smart phone, cmails, textmessages, phone calls, or an optional in-home display device (described below), all of which arcself-sclccted by thc customer. These communications provide the customer ways to monitordaily usage shown in number of days ol power remaining, dollars remaining, and kWhremaining. Additional account history information is available via the wcb portal such as a

graph showing hourly interval usage, payments made, etc. Participants may access the wcbportal 7 days a week, 24 hours a day and may set prefcrcnces for the type of communicationsthey wish to receive. At least one alert type is mandatory; however, ihc customer may selectmultiple (or all) types if so desired. Once participants have selected their prcfcrredcommunication channel(s), they will then receive any Prepay notifications, paymentnotilications, and balance notifications via their preferred channel(s).

Up to 250 in-home displays will bc provided to Prepay participants on a lirst come. tirst servedbasis. Customers may request a display or may bc olfercd one if they do not have access tointernet service, email or a mobile dcvicc. There is no charge for the in-home display to thccustomer during Prepay. In-home displays will not provide payment options, but will displayusage information. including daily, weekly, and monthly usage (kWh), and electric balanceremaining in days and dollars (based on the customer's average daily usc). Participants who clcctto receive an in-home display will receive it as part of the welcome package when the Prepaymeter is installed. The in-home display will go through a process to "join" it to thc meter by PFCmeter pcrsonncl before providing it to thc customer. Upon receipt of the device, the customersimply plugs it in to any household outlet to stmt receiving information. In the event thc in-homedisplay device is damaged by acts of ihe customer or others, the customer shall pay areplacement charge. Correspondingly, if the customer fails to return the in-home display deviceto thc company when thc customer discontinues receiving service before conclusion of thcPrepay pilot, the replacement cost shall be charged to the customer. Thc Company reserves theright to transfer ownership of thc device to the customer at thc end of the Prepay pilot.


a positive account balance, no minimum payment amount is required; so, customers may choose

a payment frequency and amount that v ork best for them based on their lifestyle preferences.

Thc customer should not utilize payment methods other than those included as part of thc Prepay

program, as referenced in the Residential Service - Prepay Pilot Program Schedule RPP-18 Rider

(Fxperimcntal) ('ariff') and attached in Appendix II, as such methods will cause substantial

delays in posting payments to Prepay and may result in disconnection until thc payment posts. In

the event of extrcme weather moratorium. customers will bc notilicd via their preferred

communication channel when the event starts and ends. Disconnccts will resume at the daily set

time the day after the momiorium is lilted. A minimum payment based on the customer's

average usage, is required to reconnect a disconnected accounh The customer is responsible for

Rcstdentiet Prepay Pilot Program Page 6 of 26

will be informed of any associated Prepay fees, such as payment processing fees, upon enrollment.

Once a customer reaches a balance equivalent to 10 days of power remaining, they wi II receive a notification each day until a payment is made, or until they arc disconnected. Any disconnects will occur at approximately 10 a.m., and can occur on any day including weekends and holidays. No disconnect or reconnect fees will be charged. Reconnects can occur at any time following a disconnect order once the customer recharges their account. Reconnects arc expected to occur within 2 hours of payments made via program payment channels.

Customers that move while enrolled in Prepay may be de-enrolled if they no longer meet the eligibility criteria. Customers may also choose to de-enroll at any time. The Prepay meter will be removed from the premise when a customer exits Prepay and/or at the conclusion of the program.

The following diagram illustrates the Prepay process from enrollment to payment for customers:

How Does Prepay Work?

Customer cans to enroll and initia rzes account w ith funds

In home display with customer data

Rcs1denual Prepay Pilot Program

- 0 Meter reads AMI head end system, CIM, and prepay engine- connect/disconnect and customer payments

Customer payments (credit, debit, prepaid card, cash) and notifications vfa text, email, web, JVR

Page 7 of26

any processing fccs associated with their chosen method of payment. All participants will be

informed of any associated Prepay fccs. such as payment processing fccs, upon enrnllmen.

Once a customer reaches a balance equivalent to 10 days of power remaining, they will reccivc a

notiiication each day until a payment is made, or until they arc disconnected. Any disconnectswill occur at approximately 10 a.m., and can occur on any day including weekends and holidays.No disconnect or reconnect fccs will bc charged. Reconnccts can occur at any time following adisconnect order once thc customer rechargcs their account. Rcconnects arc expected to occurwithin 2 hours of payments made via program payment channels.

Customers that move while enrolled in Prepay may be de-enrolled if they no longer meet thceligibility criteria. Customers may also choose to de-enroll at any time. Thc Prepay mctcr will beremoved from the premise when a customer exits Prepay and/or at the conclusion of thepfogfaltl.

Thc following diagram illustrates the Prepay process from enrollment to payment for customers:

How Does Prepay Work'P

to enrollaccollllt

AMI head endsystem, CIM, and prepayentgne — connectldisconnectand customer payments

In home tgspiaywith customer data

ash

Customer payments(credit debit, prepaidcard, cash)and noutlcationa viatext, email,web, IVR

$~& Pmgrmm Energy

acsrdentiol Prepay Pdot Program Page 7 oi26

The primary objectives of Prepay arc to measure and validate the achieved energy and capacity savings resulting from offering customers a prepaid payment option, and to better understand the drivers and persistence behind the associated energy savings. Similar programs report energy savings from I 0% - 15%. The Prepay Pilot will also help PEC to determine the market for Prepay, examine customer behavior while on Prepay, determine customer motives, and evaluate customer preferences regarding payment channels and communication methods.

Program Duration

Prepay is designed to run through December 31,2014.


PEC new and existing residential customers must meet the following eligibility criteria as defined in the Tariff, some of which are summari7.ed below:

I. Customers must reside in one of the following zip codes: a. Florence: 2950 I, and 29505 b. fayetteville:, 28303, and 28311 c. Spring Lake: 28390 d. Jacksonville: 28540, and 28546 c. Raleigh: 27601,27603,27606, 27609, and 27610

2. Customer may receive service under the Street Lighting Service (Residential Subdivision) Schedule SLR and the Residential Service - Load Control Rider LCSUM-2 (Energy Wise), but may not participate in any other regulated or non-regulated products or services with the exception of PEC's standard energy efficiency program offerings.

3. Customer may not participate in the following while participating in Prepay: a. Equal Payment Plan (EPP) b. Oank Draft c. c-bill d. Preference Pay e. Deferred Payment Plan (DPP) r. Long-Term Payment Plan (LPP)

4. Residences participating in Landlord Agreements Docket No. 95-652-E arc not eligible to participate in the program.

5. Customer cannot have an arrears balance that exceeds one month of metered service at the time of application.

6. Customers subject to the November-March disconnect moratorium (Commission Regulation I 03-352(a)(3)(b)) or with a Special Service Termination (SST) code that prevents disconnection of service during certain times arc not eligible. These include: a. Life support equipment (SST code I)


Program Objective

Thc primary objectives of I'repay are to measure and validate the achieved cncrgy and capacitysavings resulting from offering customers a prepaid payment option, and to beuer understand thedrivers and persistcncc behind the associated energy savings. Similur programs report energysavings from 10% - 15%. Thc Prepay Pilot will also help I'EC to dcterminc the market forPrepay, examine customer behavior while on Prepay, dctcrmine customer motives, and evaluatecustomer pre!'erenccs regarding payment channels and communication methods.

Program Duration

Prepay is designed to run through Deccmbcr 31, 2014.


PEC new and existing residential customers must meet thc following eligibility criteria asdefined in the TarilY, some of which are summarized below:

Customers must reside in onc of the following zip codes:a. Florcncc: 29501, and 29505b. Fayettcvillc:, 28303, and 28311c. Spring Lake: 28390d. Jacksonville: 28540, and 28546c. Raleigh: 27601, 27603, 27606, 27609, and 27610Customer may rcccive service under the Street Lighting Service (ResidentialSubdivision) Schedule SLR and the Residential Service - l.oad Control Rider LC-SUM-2 (EncrgyWisc), but may not participate in any other rcgulatcd or non-regulatedproducts or services with the exception of PEC's standard energy efficiency programotfcrings.Customer may nut participate in thc following while participating in Prepay;a. Equal Payment Plan (L'PP)b. Bank Draftc. c-billd. Prcfcrencc Paye. Defi:rrcd Payment Plan (DPP)

Long-Term Payment Plan (LPP)Residences participating in Ixtndlord Agreements Docket No. 95-652-E arc notcligiblc to participate in thc program.Customer cannot have an arrears balance that excccds onc month of metered serviceat the time of application.Customers subject to thc Novcmbcr-March disconnect moratorium (CommissionRegulation 103-352(a)(3)(h)) or with a Special Service Termination (SST) code thatprevents disconnection ol'scrvicc during certain times arc not cligiblc. These include:a. Life support cquipmcnt (SST code 1)

Residential Prepay Pilot Proaram Page 8 af26

(SST code 5) d. Moratorium (SST code 2)

7. A minimum starting balance of3 days of power based on average usage must be paid before the Prepay meter is installed.

8. Residence must receive adequate cellular service in order for the meter to communicate with the pilot program infrastructure.


Communications Cost Year Amounts

($000) 2012 s 240 2013 3~ 2014 6 Total $ 24Q252

Communications materials will be developed early 20 12; therefore, examples are not yet available. Proposed forms of communication materials arc: direct mail; email; and a welcome kit consisting of program information.

Estimated Number of Participan ts

During Prepay, as customers leave the program, PEC will accept new customers during the i\RRA grant window. After the grant window, PEC will strive to manage costs while maintaining a large sample si:r.c to the extent reasonably possible. The Company's estimated number of Prepay participants is provided in the following table:

Estimated Number of Partici1>ants (Cumulalive) Year Participants 2012 1,000 2013 I 000 2014 1,000

Prepay is limited to no more than 1,000 customers in North and South Carolina. After the expiration of i\RRA funds in 2013. new customers will not be enrolled into Prepay but rather existing customers participating in Prepay will be supported through the dun1tion of the progr<~m .

Program Impacts

The results of Prepay, including program impacts, will be provided to the Commission upon completion of the final EM&Y report.

Res•dcnual Prepay Pilot Program Page 9of26

b. Disabled (SST code 4)c. Seriously or chronically ill (SST code 5)d. Moratorium (SST code 2)A minimum starting balance of 3 days of power based on average usage must be paidbefore thc Prepay meter is installed.Residence must rcccive adequate cellular service in order for the meter tocommunicate svith the pilot program infrastructure.

Comntunication Costs and Examples

Communications materials will he developed early 2012; thcrcforc, examples are not yctavailable. Proposed forms uf communication materials are: direct mail; email; and a welcomekit consisting of program inl'ormation.


During Prepay, as customers leave the program, PEC will accept new customers during theARRA grant window. AI)cr the grant window, PEC will strive to manage costs whilemaintaining a large sample sire to the extent reasonably possible. Thc Company's estimatednumber of Prepay participants is provided in the I'ollowing table:

Prepay is limited to no more than 1.000 customers in North and South Carolina. After theexpiration of ARRA funds in 2013, new customers will not bc enrolled into Prepay but ratherexisting customers participating in Prepay will be supported through the duration of the program.

Program Impacts

Thc results of Prepay, including program impacts, will be provided to the Commission uponcompletion of thc final EMfkV rcpon.

Residential Prepay Puef Prearem Page 9 of26

Relevant Information

Prepay docs not conform to a number of existing Commission regulations due to the unique nature of how Prepay functions. Therefore, as part or the process of requesting regulatory approval of Prepay, PEC requests the Commission waive all (or specified portions) of the following Commission Regulations which arc further defined in Appendix A:

I. Regulation I 03-321. Meter Reading 2. Regulation 103-339. Customer Rilling l._Rcgulation 103-340. Adjustment of Bills ~ Regulation 1()3~342. R.:asons For Dcni al or J)i~epntinuance of Service 4,-S"Rcgulation I 03-352. Procedures for Termination of Service


Proposed Marl<eting Plan

PEC will use an integrated approach to market Prepay. These marketing efforts are designed to inform consumers of payment options to tit their individualized lifestyles, understand energy costs. create customer awareness of the program, educate customers on energy saving opportunities, and cmphasi7.c convenience of participation. Email and direct mail sent to selected zip codes will be used to market Prepay.


Year Eligible Market Potential 2012 30,000 2013 30,000 2014 30,000






Other Relevant information

Prepay docs not conform to a number of existing Commission regulations duc to the uniquenature of how I'repay functions. Therefore, as part of thc process of requesting regulatoryapproval of Prepay, PFC requests the Commission waive all (or specified portions) of theIollowing Commission Regulations which arc further defined in Appendix A:

1. Regulation 103-321. Mctcr Reading2. Regulation 103-339. Customer Billing

Regulation 103-340. Adjustmcnt of BillsItc u

' -142 ctso . rirl)cnialurl&iv intinuanc.d-v.Regulation I03-352. Procedures for Termination of Service

'I c

Additional information

Proposetl Marlteting Plan

PFC will use an integrated appniach to market Pr«pay. These marketing efforts arc designed toinform consumers of payment options to tit their individualized lil'cstyles, understand energycosts, create customer awareness of thc program, educate customers on energy savingopportunitics, and emphasize convenience oi'articipation. Email and direct mail sent toselected zip codes will be used to market Prepay.

Market Potential and Estimated Market Crowth



Esthnatcd EnerID Reduction

Rel'cr to Program Impacts Section.

Rasidroiiat Prepay Pilot Program Page IO of 26

Sales


Estimated Load Shape Impacts


Costs and Benefits



to recovery through the DSM/EE Rider. Eligible program costs will consist of Operation and



and supplies. Eligible program expenditures incurred, net of /\RRA funded amounts, will be

recogni7.cd in the accounting periods in which they occur.

p rogram ost rojecttons )y . ype O&M C P . b T Program

Administration Communications EM&V Total Year {$000} ($000) ($000) ($000)

/\RRA Funds

2011 $ 885 $ 0 $ 0 $ 885

2012 1,754 240 52 2,046

2013 368 3 34 405

2014 0 0 () 0

Subtotal $ 3,007 $ 243 $ 86 $ 3,336

PEC's General Funds

2011 $ 0 $ 0 $ 0 $ 0

2012 0 0 0 0

2013 221 3 100 324

2014 358 6 60• 424

Subtotal $ 579 $ 9 $ 160 $ 748

Total $ 3,586 $ 252 $ 246 $ 4,084 . . ..

• Because M& V actmtres normally lag program admmrstratwn acllvllles. some portiOn of M& V related costs will be Incurred In a subsequent year.

Residential Prepay Pilot Program Page II of26

Estimated Lost Energy Sales

Rcfcr to Program Impacts Section.

Esti mated Load Shape Impacts

Rcl'cr to Program Impacts Section.

Costs atsd Benefits

Total and Per Unit Cost and BeneIIt

Eligible program cosis, outside those funded with DOF. designated ARRA funds, will be subject

to recovery through thc DSM/ELi Rider. Fligible program costs will consist of Operation and

Maintenance (OgcM) costs which may include but are nut limited to: labor, outside contractors,

maintenance of ncw infrastructure, computer sogvvare, telecommunications services, materials

and supplies. Eligible program expenditures incurred, net of ARRA funded amounts, will bc


Pro ram OdcM Cost Pro'actions b T eProgram

Administration Communications EM8:V TotalYear $000 $000 $000 $000)

ARRA Funds

2011

2012

2013

2014

Subtotal

$ 885

1,754

368

$ 3,007

$ 0

240

$ 243

$ 0

52

34

$ 8G

S 885

2,046

405

S 3,336

neral FundsPFC's Ge

2011

2012

2013

2014

Subtotal

Total

$ 0

221

358

$ 579

$ 3,58G

$ 0

$ 252

$ 0

$ 160

$ 246

$ 0

324

424

$ 748

$ 4,084* Rscauss hrdt V acti rmss iiarmally lag program adnri nisiraiian ace uiiics, some portion ofhrcrs V rclaicd costs will

hc mcurrsd in a suhsequcni year.

ttesidcnuat Prepay Pilot Program Page ll of26

following table contains a summary of total categorized Prepay costs and unitized costs reported on the basis of Prepay benefits.

Cost Element Cost ($000) Cost/Unit I-- -

Program Administration $ 3,586 $ 3,586

Communications 252 252

EM&V 246 246

Total $ 4,084 $ 4,084

Participa tion Jnct>ntives

Financial incentives arc not offered; however, up to 250 in-home display devices wi ll be offered to participants.


The Company has not proposed any conditions or limitations for customers that do not wish to participate in the Prepay. Participation in this Prepay is strictly voluntary.


The primary objectives of Prepay arc to measure and validate the achieved energy and capacity savings resulting from offering customers a prepaid payment option, and to better understand the drivers and persistence behind the associated energy savings. Similar programs report energy savings from I 0% - 15


PEC's 2011 Integrated Resource Plan shows a need for additional resources throughout the 15 year planning horizon. The plan also noted that PEC is actively pursuing expansion of its demand-side management ("DSM") and energy efficiency eEE:,) programs as one of the most effective ways to reduce energy costs, offset the need for new power plants, and protect the environment.


The portion of program costs to be recovered through the DSM/EE Rider will consist of eligible Operation and Maintenance (O&M) costs, which include but are not limited to: labor, outside contractors, maintenance of new infrastructure, computer software, telecommunications services,


Thc following table contains a summary of total catcgorizcd Prepay costs and unitized costsreported on the basis of Prepay benciits.


Financial inccntivcs are not offi:red; however, up to 250 in-home display devices will be olfcredto participants.


The Company has not proposed any conditions or limitations for customers that do not wish toparticipate in the Prepay. Participation in this I'repay is strictly voluntary.


Thc primary objectives of Prepay arc to measure and validate the achicvcd energy and capacitysavings resulting from offering customers a prepaid payment option, and to better understand thcdrivers and pcrsistcnce behind the associated energy savings. Similar programs rcport cncrgysavings from 10% - 15


(PFC's 2011 Integrated Resource Plan shows a need for additional resources throughout thc 15

year planning horizon. The plan also noted that PFC is actively pursuing expansion of its

~demand-side management ("DSM") and cncrgy eAiciency ("LrLrg programs as one of the mostelfcctive ways to reduce energy costs, olYsct the nccd for new power plants, and pmtcct thcenvironment.


The portion of program costs to bc recovcrcd through the DSM/FE Rider will consist of eligibleOperation and Maintenance (OkM) costs, which include but are not limited to: labor, outsidecontractors, maintenance ol'new infrastructure, computer soiiwarc, telecommunications services,

ttesidcntial Prepay Puot Prearsm Puav 12 er26

amount<;, will be recognized in the accounting periods in which they occur.

In summary PEC will recover through the DSM/EE Rider: I. O&M dollars, net of DOE designated ARRA grant funding, recognized in the period in

which they occur; 2. An appropriate incentive described later in the Utility Incentives section of this filing.





Cost Allocation


1. Jurisdictional Allocation (all costs r·ccovered from retail jurisdiction - North Carolina and South Carolina): Energy Efficiency cost allocations will be based upon energy/sales allocation.

2. Rate Class Allocation: Allocated jurisdictional costs will be assigned to PEC's residential rate class (Schedules: RES, R-TOUD, and R-TOUE)


The Company will capitalize program costs in accordance with the Company's capitalization policy. The capital assets will be funded with ARRA dollars which will reduce their accounting book basis.

Estimated Measurement and V('rifica tion Costs

The Company's estimated measurement and verification costs for this Program are provided in the following table:

Rcsidentiul Prepay Pi lot Progrum Page 13 of26

materials and supplies. Eligible program expenditures, net of ARRA funded amounts, will berecognized in the accounting periods in which they occur.

In summary PEC will recover through thc DSM/EF. Rider:l. 0/kM dollars, nct of DOE dcsignatcd ARRA grant funding, recognized in the period in

which they occur;2. An appropriatc incentive described later in the Utility Incentives section of this filing.


Rel'cr to Program Impacts Section.

Estimate of Participation incentives

Rclcr to Participation Incentives Section.

Cost Allocation


1. Jurisdictional Allocation (all costs recovered from retail jurisdiction — North Carolinaand South Curolina): Energy Ffficiency cost allocations will be based uponcncrgy/sales allocation.

2. Rale Class Allocation: Allocated jurisdictional costs will be assigned to pEC'sresidential rotc class (Schedules: RES, R-TOUD, and R-TOUE)

Proposed Capitalization Period for hong l.ived Program Costs

Thc Company will capitulizc program costs in accordance with the Company's capitalizationpolicy. Thc capital assets will bc funded with ARRA dollars which will reduce their accountingbook basis.

Fstimated Measurenient and Verification Costs

The Company's cstimatcd measuremcnt and vcrificatinn costs I'or this Program are provided inthc following table:

Residential Prepay Pilot Progium Pago 13 of 26

2011 $ 0 2012 52 2013 134 2014 60* Total $ 246 ... . . . . • BecarlSe M& V acnwues nomrally lag program odnunrstratron ocllvmes. some portron of M& V related costs will

be incurred in a subseque/11 year.


PEC plans to usc an indepcndenL third-party consultant specializing in the measurement and verification of energy efficiency program impacts to provide the appropriate EM&V support. The evaluation plan designed to measure the demand and energy impacts of the Prepay Program follows:

Objectives EM&V activities will provide independent, third-party estimation of energy and peak demand savings as well as an evaluation of customer satisfaction and behavioral change leading to energy conservation. Specific objectives include the following:

• Estimate the amount of observed energy savings and peak demand reductions resulting from participation in Prepay;

• Identify the specific program-induced behaviors and efficiency measures that contribute to reductions in consumption;

• Identify Prepay clements that contribute to greater conservation effects (e.g., frequency of low-balance alerts; presence of in-home display);

• Detcnnine whether different subgroups of participants achieve greater levels of conservation and/or satisfaction with Prepay.

Impact Evaluation The initial impact analysis tasks will consist of sample design, data collection activities and determining analysis methodologies.

Sample Design All customers on Prepay (approximately 1,000) will constitute the participant sample for EM&V purposes. A control group consisting of the:: same number of non-participants (or a multiple of the participant count) will be selected in order to control for factors other than participation and weather that may alter energy consumption. The control group will be matched to the participant group in terms of observable characteristics, primarily monthly electricity consumption patterns.

Data Collection Data utilized for EM&V will include program databases; customer billing data, paper and electronic records of program-related transactions; weather data; and telephone survey results. Monthly billing data before and after Prepay start-up will be used for each individual customer that is either a program participant or a member of a selected control group. A complete year of

Rcsidentiul Prepay Pi lot Progrum Page 14 of26

Becoroe Mdr Y ocnriiies normolly log program mbemcrmrrioo ocomries, some porooo ofM/ V related cosis willbe incr riced io o su cseeocoi yeor.


PFC plans to usc an independent. third-party consultant specializing in ihe measuremcnt andverification of energy cfliciency program impacts to provide the appropriate EMkV support.Thc evaluation plan dcsigncd to measure the demand and energy impacts of the Prepay Programfollows:

ObjectivesEMbkV activities will provide independent, third-party estimation of energy and peak demandsavings as well as an evaluation of customer satisfaction and behavioral change leading to energyconservation. Spcciilc objectives include thc following:

~ Faiimatc the amount of observed energy savings and peak demand reductions resultingfrom participation in Prepay;

~ Identify the specific program-induced behaviors and eflicicncy measures that contributeto reductions in consumption;

~ Identify Prepay clemcnts that coniribute to greater conservation cifccts (c.g., I'rcquencyof low-balance alerts; prcscncc of in-home display);

~ Determine wheihcr diiYercnt subgroups oi'articipants achieve greater levels ofconservation and/or satisfaction with Prepay.

Impact EvaluationThe initial impact analysis tasks will consist of sample design, data collcciion activities anddetermining analysis methodologies.

Sample DesignAll cusiomcrs on Prepay (approximately l,000) will constitute the participant sample for EMtkVpurposes, A control group consisting oi'he same number of non-participants (or a multiple ofthc participant count) will be selected in order to control for I'actors other than participation andweather that may a! tcr energy consumption. 1'hc control group will be matched to the panicipantgroup in terms ofobservable characteristics, primarily monthly electricity consumption patterns.

Data CollectionData utilized for EM8.V will include program databases; customer billing data, paper andelectronic records of program-related transactionvq wcathcr data; and tclephonc survey results.Monthly billing data bei'ore and aflcr Prepay start-up will bc used for each individual customerthat is cithcr a program participant or a member of a selected control group. A complete year of

RcsiJcnusl Prepay Pilot Program Page 14 of 26

Prepay may be more transient than the average customer, Prepay will be open to customers who have less than a full year of billing history at their current address.

The main purpose of a control group is to ensure that any predicted savings among participants are due solely to participation in Prepay. The control group allows the statistical methods of analysis employed to remove factors leading to changes in energy usc outside of program participation such as a declining economy.


Data Analysis Linear fixed effects regression (LF'ER) analysis will be used to estimate net energy savings due to Prepay. This analysis has been applied widely in analy7.ing savings for other utility programs that induce changes in customer behavior, including at Puget Sound Energy, Sacramento Metropolitan Utility District, Commonwealth Edison, and National Grid. It generates a difTcrence-in-differenccs estimate of program savings. Figure I provides an illustration of the difference-in-differences concept and its relationship to the estimation of program savings.

In the figure, average daily consumption (ADC) of energy (kWh) is initially the same for program and control households, because the control group is selected explicitly to match the participant group's consumption level and patterns. Average daily consumption for program households declines after the start of the program by the amount a1 + a2, but it is inappropriate to conclude that this is entirely due to the program, because other factors affecting all households, such as broad economic changes, are also in play. These other factors also affect the control households, though-as shown in the figure-and so the difference between the change in ADC over time for program households (a1 + a2) and for control households (a1) is the portion of the reduction in ADC attributable to the program (that is, a2) .

Residential Prepay l'ilot Program Page 15 of26

data is desirable to be able to evaluate changes in achieved savings levels across thc seasons;however, since some customers who may bc intercstcd in Prepay may bc more transient than theaverage customer, Prepay will be open to customers who have less than a full year of billinghistory at their current address.

Thc main purpose of a control group is to ensure that any prcdicied savings among participantsare due solely to panicipation in Prepay. Thc control group allows the statistical rncthods ofanalysis cmploycd to remove I'actors leading to changes in cncrgy usc outside of programpanicipation such as a declining economy.

Measuremenl and Verification Methods

Data Analysisl.inear fixed elTcctc regression (LFFR) analysis ivill be used to estimate nct energy savings dueto Prepay. This analysis has bccn applied widely in analyzing savings for other utility programsthat induce changes in customer behavior, including at Puget Sound Energy, SacramentoMetropolitan Utility District, Commonwealth Fdison, and Ptational Grid. It generates adifference-in-differcnccs estimate of program savings. Figurc I provides an illustration oi'hcdifference-in-dilfcrcnccs concept and its relationship to the estimation of program savings.

In the figurc, average daily consumption (ADC) of energy (kWh) is initially thc same forpmgram and control households, because the control group is sclectcd explicitly to match thcparticipant group's consumption level and pattcms. Average daily consumption for programhouseholds declines after thc start of thc program by thc umount rrt + at, but it is inappropriateto conclude that this is entirely due to the program, because other I'actors aiTccting allhouseholds, such as broad economic changes, are also in play. These other factors also atTect thecontrol households, though—as shown in the figure—and so thc dilTcrcnce between the changein ADC over time for program households (at + a ) and for control households (rzt) is theportion of the reduction in ADC attributable to the program (that is, tzt).

Rmidentiat Prepay Piler Program Page 15 of 26

Fixed Effects Regression Analysis Provides a Difference·in·Diffcrence Estimator of Program Savings

/\DC

Program Households er.m1l~

Program Households M1"tR

Control Households enfoRe

Control Households APTtM

a2• Program Savings

The linear 11xcd effects regression approach to be used in the impact analysis: is ideal for separately identifying the reduction amounts a 1 and a2• Formally, letting Post, denote a dummy variable indicating whether period t is in the post-program period, and letting Treatment* denote a dummy variable indicating whether household k is a program household, the simplest version of the model is the fo llowing:

( I )

where likt is the error term. Note that the constant term is indexed by the household; this is the household's fixed effect. This model can be estimated using ordinary least squares (OLS) regression to generate an unbiased estimate of average daily savings, a2•

1

The simple I ,FER model described above can be expanded to include two other types of variables: those that change over time, such as weather-related variables or the participation in other energy efficiency progr<1ms, and those that are fixed over time but change across households, such as housing/household characteristics. For each of the variables that change over time, four terms arc added to the model: the variable itself; the variable interacted with Treatmenlk to capture differential effects of the variable due to treatment category; the variable interacted with Post, to capture differential effects of the variable due to exogenous shocks

1 To usc OLS regression the data is first de-meaned to eliminate the household-specific constants from ·the analysis, thereby significantly reducing the number of parameters to be estimat~d.


Figure 1. Fixed EHects Regression Analysts Provides a Difference-ln.Difference Estimator of ProgramSavings

)The linear lixed eiYects regression approach to bc used in the impact analysis: is ideal forseparately identifying the reduction amounts crt and at. Iiormally, Icuing Post, denote a dummyvariable indicating whether period t is in thc post-program period, and letting Treurmenrr dcnotca dummy variable indicating whether household k is a program household, thc simplest versionof the model is thc fullowing:

yiDCu mam+a,Post, +atTreafmenfa Post, +du

where sr, is thc error term. Note that thc constant term is indexed by thc household; this is thchousehold's fixed clTect. This model can be cstimatcd using ordinary least squares (OI,S)rcgrcssion to gcncrate an unbiased estimate of average daily savings, rrt. I

The simple I.FER model dcscribcd above can be expanded to include two other types ofvariables: those that change over time, such as weather-related variables or thc participation inother energy cAiciency programs, and those that arc lixed over time but change acrosshouseholds, such as housing/household characteristics. For each ol'he variables that changeover time, four terms arc added to thc modch thc variable itself; thc variable intcractcd withTrearmenfr to capture dilyerential effects of the variable due to treatment category; the variableintcmctcd with Post, to capture dilfercntial effects of thc variable duc to cxogcnous shocks

'o usc OLS regression thc data is first dc-moaned to elimmaie thc household-spccllic constants from thc analysis,thereby significantly reducing dm number of puruinctcrs to be esumaied

Rcsldcnual Prepay Pilot Program Page 16 of 26

Treatmenlk · Post, to capture the effect of the variable on the treatment response (that is, how the variable afTccts program savings). For each of the variables that do not change over time, only two terms arc added to the model: the variable interacted with Post, and the variable interacted with the interaction Treatment* · Post,.

Formally, we define W, as a vector of variables that change over time, where the subscript indexes the values of the variables in month t, and we define Zt as a vector of housing/household characteristics for household k. In this case, we expand our linear model to:

ADCtt = a0, +a1Post, +a211-eatment, ·Post,

+PoW, + /31 W, · Treatment• + /32 W, ·Post, + /33 W, · Treatment• ·Post,

+00Zk ·Post, +01Z, ·Treatment*· Post, +&11 (2)

where the coefficients /J; and b; denote the set of coefficients associated with the variable sets W, and Zt, respectively. In this model, the average daily savings (ADS) is the sum of all the terms multiplying the interaction term 'fi·eatment* · Post,:

(3)

From the above Equation (3), average daily savings arc conditional on the values of W, and Z*. ln other words, whereas the simple LFER model allows the overall average daily savings for the program over the specified period, the expanded model allows analysis of how certain variables such as weather variables affect savings.

Impact of behavior changes vs. efficiency measures Customer surveys will supplement the analysis to confirm behavior changes and efficiency measures (including purchases of high-efficiency equipment installation of energy-saving measures such as attic insulation) likely to contribute to the energy and peak load reductions. By correlating these self-reported changes in the household situation with the observed energy consumption, the EM& V team may be able to isolate the savings impacts due to behavioral changes versus efficiency measures. This information may also allow for an estimation of peak load reductions-for example, due to known load shapes of air conditioner usage or from reported activities occurring during peak hours.

Persistence of savings Persistence of savings will be assessed by comparing participant consumption to the control group in the first year of the program and again at the conclusion of the program. If a participant moves residences during the program, their bi lling data subsequent to the move will be dropped from the analysis. llowevcr, any permanent measures performed or equipment purchased as a result of the program could be considered to provide continued savings; furthermore, persistence in behavior can be assumed if the analysis shows that conservation occurs throughout the program period, rather than just after low-balance notifications or when account balances arc low. Additionally, the information on efficiency measures will provide insight into persistence

Residential Prepay Pilot Program Puge 17 of26

across thc prc- and post-program periods; and the variable intcraclcd with thc interactionTrcatmenti I'ost, to capture the effect of the variable on the treatment response (that is, how thcvariable alfccts program savings). For each of the variables that Jo not change over time, onlytwo terms arc added to the model: the variable interactcd with Posts and the variable interaciedwith thc interaction Treatments Post,.

I'ormally, wc dcline W, as a vector of variables that change over time, whcrc the subscriptindcxcs the values of thc variables in month t, and we define Ze as a vector ofhousing/householdcharacteristics Ior household k. In this case, we expand our linear model to:

r(DC„=aiu+a,Past,+a,Treatment, Posr,

+/)oW,+/)iW, Treatment, +/I Wi Post +PtW, Treatment,.Past,

+iyoZ, Past, +HZ, Treatment, Post, +s„ (2)

whcrc the cocflicients /I and 4 denote the set of coeAicients associated with the variable sets W,and Zu respectively. In this model, thc avcmge daily savings (A!)S) is thc sum of all thc termsmultiplying thc interaction term 7'reaniienti Pos/x

A DSo = at + /I, VV, + iy, I, (3)

From the above L'quation (3), average daily savings arc conditional on the values of W, and Zi.ln other word~, whereas the simple LFER model allows the overall average daily savings for lhcprogram over thc specified period, thc expanded model allows analysis of how certain variablessuch as weather variables affect savings.

Impact of behavior changes vs. efficiency measuresCustomer surveys will supplement the analysis to confirm behavior changes and eAicicncymeasures (including purchases of high-eAiciency equipment installation of energy-savingmeasures such as attic insulation) likely to contribute to the energy and peak load reductions. Bycorrelating these self-rcportcd changes in the household situation with thc observed cncrgyconsumption, the FM/kV team may bc able to isolutc lhc savings impacts due to behavioralchanges versus cfliciency measures. This infiirmation may also allow for an estimation of peakload reductions—for cxamplc, duc to known load shapes ol air conditioner usage or fniinreported activities occurring during peak hours.

Persistence of saviogsPersistence ol'avings will bc assessed by comparing panicipant consumption to the controlgroup in thc iirst year of thc program and again at thc conclusion of thc program. If a participantmoves residences during the program, their billing data subsequent to the move will be droppedfrom thc analysi~. Ilowevcr, any permanent measures pcrformcd or equipment purchased as aresult of the program could be considered to provide continued savings; furthcrmorc, persistenccin behavior can bc assumed if thc analysis shows that conservation occurs throughout theprogram period, rather than just after low-balance notifications or when account balances arelow. Additionally, the information on cfflcicncy measures will provide insight into persistence

I!csiiteotiat Prepay Pilot Program Page l7 o(2G

'·net" savings in that none of the Prepay participants could have been on the Prepay b1lling plan without the existence of the program. While some participants may have taken energy conserving actions or purchased high efficiency equipment anyway, the matched control group is designed to ensure that the control group can be expected to exhibit the same degree of energy conserving behavior and purchases. Thus, there is no free ridership, and no "net-to-gross" adjustment is necessary.

PEC will provide the monthly usage data required to perform the statistical bill analyses, as well as oversee the EM&V effort to ensure its timely and comprehensive execution. However, the EM&V work will be conducted by the independent consultant.

Process Evaluation The process evaluation will provide customer feedback and help to identify behaviors and measures leading to energy savings. Process evaluation will include two primary data collection activities:

• Interviews with PEC program managers and contractor staff. These interviews will confirm the evaluation team ·s understanding of Prepay, how it is being administered, and the unique bill payment procedures and options offered to participanL~. Interviews will address feedback to date from customers and initial opinions of how customers are responding.

• Participant Surveys. The participant surveys will be conducted by email/web (supplemented by telephone) for a minimum of 100 customers at the beginning, middle, and end of Prepay. The surveys have several objectives:

o Provide demographic information for use in understanding how Prepay affects different subgroups of the population (e.g., by age, income, home ownership, etc.)

o /\ssess customer satisfaction, including benefits of Prepay and any difficulties resulting from temporary shut-off of service

o Elicit ideas for improvements in Prepay information, technology, and rules o Identify actions taken by customers to reduce electricity consumption (including

behavior changes and equipment purchases), and how prepay information inOucnced these actions.

Mcasur(HllClH and Verification Reporting Schedule

PEC intends to tile annual reports to update the Commission on program activity, including the number of participating customers and the estimated kW and kWh impact of the program. Customer surveys will begin at approximately the time of participant recruitment and will be repeated part way through Year l and again at the end of Prepay. The statistical billing analysis will begin after approximately six months of program implementation. A tentative schedule of EM&V activities and dcliverables is provided in the table below. The timeline is subject to

Residential Prepay Palot Program Page 18 of26

since thc evaluation can leverage available secondary data regarding the useful lifetimes forvarious categories of equipment and measures.

Net savingsThe analysis inherently estimates "nct" savings in that none of the Prepay panicipants could havebeen on thc Prepay billing plan without the existcncc of the program. While some participantsmay have taken cncrgy conserving actions or purchased high cfliciency equipment anyway, thematched control group is designed to ensure that thc control group can bc cxpccted to exhibit thcsame degree of energy conserving behavior and purchases. Thus, there is no I'rce ridership, andno "net-to-gross" adjustmcnt is ncccssary.

PIIC will provide the monthly usage data required to perform thc statistical bill analyses, as wellas oversee thc EM&V effort to ensure its timely and comprehensive cxccution. However, thcEM&V work will bc conducted by the independent consultant.

Process EvaluationThe process evaluation will provide customer feedback und help to identify behaviors andmeasures leading to cncrgy savings. Process evaluation will include two primary data collectionactivities:

~ Interviews with PEC program managers and contractor staff. 'I'hcsc interviews willconfirm the evaluation team's understanding of Prepay, how it is being administcrcd, andthc unique bill payment procedures and options offere to panicipants. Interviews willaddress fccdbuck to date from customers and initial opinions of how customers areresponding.

~ Participant Surveys. The participant surveys will bc conducted by email/web(supplemented by telephone) for a minimum of 100 customers at the beginning, middle,and end of Prepay. The surveys have several objectives:

o Pruvidc demographic inl'ormation for use in understanding how Prepay affectsdilTcrent subgroups of the population (c.g., by age, income, home ownership, etc.)

o Assess customer satisfaction, including bcncfits of Prepay and any diflicuiticsresulting from temporary shut-off of service

o Elicit ideas lbr improvements in Prepay information, technology, und ruleso Identify actions taken by customers to reduce electricity consumption (including

behavior changes and equipment purchases), and how prepay informationinliucnced these actions.

Measurement and Verification Reporting Schedule

PEC intends to lile annual reports to update thc Commission on program activity, including thcnumber of panicipating customers and the cstimatcd kW and kWh impact of thc program.Customer surveys will begin at approximately thc time of participant rccruiuncnt and will bcrepeated part way through Year I and again at the cnd of Prepay. The statistical billing analysiswill begin aller approximately six months of program implcmcntation. A tentative schcdulc ofEM&V activities and dcliverables is provided in thc table below. The timeline is subject to

Residential Prepay Pilot Program Page I 8 of 26

I EM&V Schedule Activity Approximate T imeframe Prepay review 0 12012 Impact Analysis:

Selecti<m of control group Q4 2012 Conduct billing data analysis Q4 2012 Draft impact findings Q1 2013

Process Evaluation: Staff and contractor interviews Q I 2012 Customer surveys Ql 2012, Q4 2012 Survey data analysis 0 2 2012, 0 4 201 2

Report Q1 2013

Year 2 EM&V Schedule Activity Approximate T imeframe Full-year (12 months) analysis Q2 2013 Full-year report Q3 201 3 End-of-Prepay surveys and analysis Q4 2013/Q l 2014 End-of-Prepay report Q2 2014

Mcthoclologies Used to Produce Impact Estimates

Please refer to section Measurement and Verification methods which provides infonnation regarding the methodologies used to produce impact estimates associated with this Program.




The allocated cost associated with the prepay program will be recovered in the annual costrecovery rider on a unifonn cents per kWh basis applicable to the benefited rate classes.

Residential Prepay Pilot Program Page 19of26

change and is predicated upon regulatory approval being reccivcd that would allow for thcprogram to commence no later than April 2012.

Year I EMdrV Schedule

Year 2 EMdeV Schedule

Methodologies Vsed to Pro&luce Impact Estimates

Please refer to section Mcasuremcnt and Verification methods which provides informationregarding thc methodologies used to produce impact cstimatcs associated with this Program.

independent Third Party Verilication

Navigant Consulting is the third pany entity engaged to provide FMgtv services.


The allocated cost associated with thc prepay program will be rccovercd in the annual cosi-recovery rider on a uniform cents per kWh basis applicable to the benefited rate classes.

ttesidennal Prepay Pilot Progrant Page taof26

Pilot Program Schedule RPP-18 Rider (Experimental) is attached in Appendix B.

Utility Incentives

PEC is requesting the recovery of the measured and verified net lost revenues associated with Prepay if (1) it is ultimately determined that the pilot program was cost effective; and (2) subsequent to the final EM&Y of Prepay, PEC implements Prepay as a fully-deployed t::E progrum after appropriate South Carolina Office of Regulatory Staffs review and Commission approval. PEC proposes to defer the recovery of Prepay's net lost revenues until such time as F.M& Y results become available. For each Prepay vintage associated with the program, recoverable net lost revenues will be limited to thirty-six months. The thirty-six month term for recoverable net lost revenues will cease upon (a) the implementation of a Commission approved alternate recovery mechanism, or (b) the implementation of new rates approved by the Commission in a general rate case or comparable proceeding to the extent the rates are set to explicitly or implicitly recover the net lost revenues associated with Prepay.


Rcsidenual Prepay Pilot Program Page 20of26

Tariffs

PEC's proposed Residential Service - Prepay Pilot Program Schedule RPP-l 8 Rider(Fxperimental) is attached in Appendix B.

Utility incentives

PL'C is requesting thc recovery of thc measured and verified net lost rcvcnues associated with

Prepay if (l) it is ultimately determined that the pilot program was cost elfectivc; and (2)subsequent to thc final EM&V of Prepay, PFC implements Prepay as a fully-deployed EF,

program aller appropriate South Carolina OAicc of Regulatory Staffs review and Commission

approval. PFC proposes to defi:r the recovery of Prepay's nct lost revcnucs until such time asFMgrV results become available. For each Prepay vintage associated with the program,rccoveruble nct lost revenues will be limited to thirty-six months. The thirty-six month term forrecoverable nct lost revenues will cease upon (a) the implementation of a Commission approvedalternate recovery mechanism, or (b) (he implementation of new rates approved by theCommission in a general rate case or comparable proceeding to the cxtcnt the rates are set to

explicitly or implicitly recover the nct lost revenues associated with Prepay.

PL'C is not requesting u Program Perfbrmancc incentive ("PPl") for thc Prepay pilot program.


Prepay docs not strictly conform to a number of cx1sllng Commission Rules and Regulations {hereinafter referred to as "Regulations"). Therefore, as part of the process of requesting regulatory approval of Prepay, PEC hereby requests that the Public Service Commission of South Carolina ("the Commission") waive all (or specified portions) of the following existing Regulations, for the stated reasons:

Regulation I 03-321. Meter Reading. PEC requests waiver of this Regulation in its entirety. This Regulation presently states that "Unless extenuating circumstances prevent, meters shall be read and bilfs rendered on a monthly basis not less than twenty-eight days or more than thirty-four days. " PEC will not render traditional monthly after-the-fact paper bills to Prepay participants. Prepay participants will have the ability, through multiple means (including phone calls, email, IVR, in-home display devices, and text messaging) to view their daily charges. PEC will generate a normal bill internally for reconciliation purposes and will maintain these records in accordance with Regulation I 03-31 1, but such bills will not be sent to the participant.

Regulation 103-339. Customer Billing. • This Regulation states "The elecrricalutiliOI shall hill each customer as promptly a.~-- ···

possible [ollowing rhe reqding of the meter and render a receiat of pqvment upon request. ·· As stated above, PEC will not be rendering traditional atier-thc-fact hard copy bills to Prepay participants based upon meter readings.

• PEC requests waiver of the entirety of Subsection 2, Bill Forms. As stated in the requested waiver of I 03-321 above, PEC will not render traditional monthly after-thefact hard-copy bills to Prepay participants. Prepay participants will have the ability, through multiple means (sec waiver of I 03-321 above), to view their daily charges. Prepay participants have round-the-clock electronic access to their account and can make payments virtually instantaneously in whatever amount they desire, by phone (credit or debit card); internet (via the participant's computer or internet-enabled mobile device); or at any MoneyGram location. PEC will generate a normal bill internally for reconciliation purposes and will maintain these records in accordance with Regulation 103-311, but such bills will not be sent to the participant.

• PEC requests waiver of Subsection 5, Charges for Discontinuance and Reconnection, which states in part: " ... the electrical utility may make reasonable charges, to be approved by the Commission, for the cost incurred in discontinuing the service and reconnect ion and require payment for service billed and for service used which has not previously been billed." PEC has tariff provisions on file with and approved by the Commission reflecting such charges, but those charges will not be applicable to Prepay participants, who will not be charged for discontinuation of service or reconnection.

• PEC requests waiver of Subsection 6, Estimated Rills. This Regulation states that a utility ''shall not send a customer an estimated bill, except for a good cause ... " and "In no instance will more than one estimated bill be rendered within a sixty-day

Residential l'rcpny Pilot Program Page 2 1 of26

Formatted: Bulleted + level: I + Aligned at: o.s· + Indent at: 0.75"

Appendix A

Request to Waive Regulations

The bill payment flexibility sought under Prepay docs not strictly conform to a number ofexisting Commission Rules and Regulations (hcreinal)cr referred to as "Regulations").Therefore, as part of thc process of requesting regulatory approval of Prepay, PFC herebyrequests that thc Public Service Commission ol'South Carolina ("the Commission") waive all (orspeci tied ponions) of thc following existing Regulations, for thc stated reasons:

Regulation 103-321. Meter Reading.PL'C requests svaiver of this Regulation in its entirety. This Regulation presently statesthat "Unless ex(enuu(lag clrcuaix(andes preven(, nie(ers el(all be read and bills renderedon a man(lrly basis nu( less (han nvenry-elgh( duys or more (haa (hir(y four days. " PECwill not render traditional monthly uger-thc-fact paper bills to Prepay participants.Prepay participants will have the ability, through multiple means (including phone calls,email, IVR, in-home display devices, and text mcssaging) to view their daily charges.PL'C will generate a normal bill intcmally 1'or reconciliation purposes and will maintainthese records in accordance with Regulation 103-311, but such bills will not be sent to theparticipant.

Regulation 103-339. Customer Billing.~ I

'ulation states " h ler(rlcal u(ill shall hill each crit(amer r rrini (I ai

I I II win ili rea in (Ire aie( r un(I nrler a re el ( o uon n( u ore tier "

s stated abov will not d rin traditiona al)er-thc-fact hardt)illa(i(Pre a atsici a B du nmeter ~in

~ PFC rcqucsts waiver of thc entirety of Subsection 2, Bill Forms. As stated in therequcstcd waiver of 103-321 above, PL'C will not render traditional monthly atter-the-fact hard-copy bills to Prepay participants. Prepay participants will have the ability,through multiple means (scc waiver of 103-321 above), to view their daily charges.Prepay participants have round-the-clock electronic access to their account and canmake payments virtually instantaneously in whatever amount they desire, by phone(credit or debit card); internet (via the participant's computer or intemct-enabledmobile device); or at any Money&i(am location. PL'C will gcncratc a normal bill

internally for reconciliation purposes and will maintain these records in accordancewith Regulation 103-311, but such bills will not be sent to thc participant.

~ PL'C requests waiver of Subsection 5, Charges for Oiscontinuance and Reconnection,which states in part: "...(he elec(rlcal u(ill(y may make reasonable charges, (o beapproved by the Canimlsxlon, for (he cosi incurred in dixcon(lnrilng (he .service andreconnecrlun und require paynien( for service billed airdfor service used which haxno( previously been billed. " PFC has tarilY provisions on file with and approved bythe Commission regccting such charges, but those charges will not be applicable toPrepay panicipants, who will not be charged for discontinuation of service orreconncction.

~ PEC requests waiver of Subsection 6, Estimated Bills. This Regulation states that autility "(hull no( send a mix(oaier an esrlma(ed bill. excep(for a good carixe... " and"In nu instance will nrore (han one e((ima(ed hill be rendered wlrhln a six(y-day

Formatted i aoiinind + level: I + nnonid at:0.5" + tnrxntat: 0.75"

Residcntiul Prepay Pilot Program Page 21 o(26

" As stated in the requested waiver of I 03-32 I above, PEC will not render traditional monthly after-the-fact hard-copy bills to Prepay participants, for actual or estimated meter readings. Prepay participants will have the ability, through multiple means, to view their actual daily charges. 13ecausc customers will be paying in advance for service, as opposed to paying after the fact for usage already incurred, the concept of estimated bills is not applicable. It should be noted, however, that unusual circumstances such as a cellular provider experiencing a widespread outage could result in an estimated daily reading; but since the next actual daily reading will correct any inaccuracies of the previous day's estimated daily reading, this will not impact the customer's billing. In any event, PEC will not disconnect the customer's service based on an estimated reading.

Regulation 103-340. Adjustment of Bills. • PEC requests waiver of Subsection 5, which addresses Equal Payment Plans. Such

plans will not be offered to Prepay participants because, as noted before, PEC will not be rendering bills for previously-incurred usage based upon monthly meter readings. Prepay participants will, in effect, have freedom to tailor their own equal payment plan by, for instance, applying a fi xed, pre-determined amount to their Prepay account at the start or each month , then tracking their daily usage to see whether it will be necessary to add an additional amount to ensure service through the first of the following month.

• PEC requests waiver of Subsectjon 6(c), which states: ''The customer shall beallowed to pay the deficient amount, in equal installments added to the regular monthly bills, over the same number of billing periods which occurred during the interval the customer was subject to pay the deficient amount. " In the event a Prepay customer is undercharged due to human or machine error, the amount of the adjustment will be applied to the customer's account, and 25% of each payment made by the customer will be allocated to the adjustment. Again, there will be no monthly bills, and because the customer directly controls how much money they apply to the account and how often, the concept of equal installments paid over the same number of months as the debt was incurred will not be applicable.

Bs.g!J.JJI~.i.9n .. ..! .. Q,}~.:? .. 4 2. r~ CH!iP.!l $ I: c1Llli:.!1 i u I or I )i scon.ti..D...bi.P n~.g, .. ~li..S.i<.O!.i.£.£" • PEC requests waiver or a portion of Subsection (d)(2): "A customer 's bill may be

adjusted to reflect norma/ usage should any tampering reflect other than normal meter readings and the customer's bill may include the establishment of a deposit in accordance with the commission 's regulation 103-332 et seq." The term "customer's bill" is no longer applicable because, as stated elsewhere in these waiver requests, Prepay customers will not receive a monthly hard-copy bill for usage already incurred. This subsection will be applicable to Prepay customers if the term "customer' s bill" is replaced by "customer's account." PEC will not charge any security deposits to Prepay customers, even ifthe meter has been tampered with.

• PEC requests waiver of Subsection ~g): "For nonpayment of bill for service rendered provided that the electrical utility has made reasonable efforts to effect collection and has complied with the provisions of regulation I 03-352. " Again, there will be no monthly bills rendered under Prepay, nor will PEC be involved in


l Formatted: Tab stopS: o.o6··, Left --J

Formatted: No bullets or numbering, Tab stops: 0.06", Left

period... " As stated in thc requested waiver of 103-321 above, PEC will not rendertraditional monthly alter-ihe-fact hard-copy bills to Prepay participants, for actual orestimated meter readings. Prepay participants will have thc ability, through multiplemeans, to view their actual daily charges. Because customers will be paying inadvance fiir service, as opposed to paying ai)cr the fact for usage already incurred, theconcept of estimated bills is not applicable. It should be noted, however, that unusualcircumstances such as a cellular provider experiencing a widespread outage couMresult in an cstimatcd daily reading; but since thc next actual daily reading willcorrect any inaccuracies of the previous day's estimated daily reading, this will notimpact thc customer's billing. In any event, PEC will not disconnect the customer'sservice based on an estimated reading.

Regulation 103-340. Adjustment of Bills.PFC requests waiver of Subsection 5, which addresses Equal Payment Plans. Suchplans will not be olfered to Prepay participants because, as noted before, PEC ivili notbc rendering bills I'or previously-incurred usage bused upon monthly meter readings.Prepay participants will, in elTcct, have freedom to tailor their own equal paymentplan by, for instance, applying a lixed, pre-determined amounl to their Prepayaccount at thc start ol'each month, then tracking their daily usage to sce whcthcr itwill be necessary to add an additional amount to ensure service through the first ofthc following month.PEC requests waiver of Subsection 6(c), which states: "The msttomer shall beallowed to pay the d%ctent antount, in equal installntents added to the regularmontlily bills, over the seine number of billing piriods which occtirred dtrring theinterval the customer was siijhect to pay the deficient amount. " In the event a Prepaycustomer is undercharged duc to human or machine error, thc amount of thcadjustment will be applied to thc customer's account, and 25% of each payment madeby the customer will be allocated to thc adjustmcnt. Again, there will bc no monthlybills, and because the customer directly controls how much money they apply to theaccount and how oitcn, thc concept of equal installments paid over the sarnc numberof months as the debt was incurred will not be applicable.

tennessee: Tsa stem: 0,06", left

Rcguitt((t211 103-34~, j(cgtv'otn'~i)~riu~li 332~olin3tgi2qgQQeiyM1„~ PFC requests waiver ol'0 portion of Subsection (d)(2): fd customer 't bill may be

adjusted to reflect norntal usage should any tantperi ng reflect other than normalmeter readings und the customer'4 bill may ittcluds tire establishinettt ofa deposit inaccordance irith the comniissi on 's regidati on l03-332 et seq. " The term "cussomcr'sbill" is no longer applicable because, as stated clscwherc in these waiver requests,Prepay customers will not rcccive a monthly hard-copy bill for usage alreadyincurred. This subsection will bc applicable to Prepay customers if thc term"customer's bill" is rcplaccd by "customer's accounty PIIC will not charge anysecurity deposits to Prepay customers, cvcn if thc meter has been tampcrcd with.

~ I'EC requests waiver ol'ubsection (d)(g)(g): "For nonpayment of bill for servicerendered provided that the electrical utility has made reasonable ePorts to effectcollecdon and has complied with tire provisions of regtdation 103-352. " Again, therewill bc no monthly bills rcndercd under Prepay, nor will PFC bc involved in

Residential Prepay Pilot tnogrsm Page 22 or 26

activities lor delinquent bills or debts arising from non-payment for energy usage previously incurred.

Regulation 103-352. Procedures for Termination of Service. • PEC requests waiver of Subsection (a) of this Regulation in its entirety. This

subsection addresses a written notice of termination to customers subject to termination of service, to be mailed "Not less than ten (10) days prior to termination of service ... " and the required contents of that notice. Prepay participants will not receive this I 0-day notice. Instead, they will begin receiving daily alerts 10 days before the projected day upon which their Prepay account will reach zero, via one or more electronic media of their choice (including phone calls, email, IVR, in-home display devices, and text messaging), stating how much energy remains in their account and urging them to add funds to their account to avoid service interruption. These alerts will not contain infonmation required by Regulation 103-352(a) relative to I 0-day mailed "tina! notices." However, the information regarding the participant's recourse to contact the ORS and the circumstances under wh ich service to Prepay participants may be disconnected will be available on PEC's website and will be provided to all Prepay participants in the introductory materials provided to each participant. Regarding Regulation 103-352(a)(3)(a), customers who qualify as a special needs account customer will not be eligible for Prepay; however, PEC will continue to publish its procedures for termination of service on its website, which will also contain similar information relative to Prepay. The December to March disconnection moratorium (103-352(a)(3)(b)) for customers for whom "termination of electric service would be especially dangerous to such person's health" wil I not be available to Prepay participants. PEC will, however, defer disconnections on a dayby-day basis in the event of extreme hot or cold weather (in accordance with disconnect procedures filed with the ORS in 2006), the same as with all other South Carolina PEC customers.

• PEC requests waiver of Subsection (b) of this Regulation in its entirety. This subsection states: "Not more than two business days prior to termination of service, the electrical wility shall make reasonable efforts by telephone or in person to contact the customers that are subject to termination of service to notify him that his service is subject to termination for non-payment. Alternatively, not more than three business days prior to termination of service, the electrical utility shall notify the customer by mail that he is subject to termination of service for non-payment. The electrical wilily shall maintain records of the efforts made to contact such customers. " Prepay participants will not be contacted in the manner prescribed by Subsection (b). Instead, they wi ll begin receiving daily alerts 10 days before the projected day upon which their Prepay account will reach zero, via one or more electronic media of their choice (including telephone), stating how much energy remains in their account and urging them to add funds to their account to avoid service interruption.

• PEC requests waiver of Subsection (c) in its entirety. This subsection requires utilities to "provide for the arrangement of a deferred payment plan to enable a residential customer to make payment by installments where such customer Is unable to pay the amount due for electrical service," and specifies how the utility shall administer such installment plans by adding a portion of the customer's debt to future


Rcgulati

collection activities for delinquent bills or debts arising I'rom non-payment for energyusage previously incurred.

on 103-352. Procedures for Termination of Service.PEC requests waiver of Subsection (a) of this Regulation in its entirety. Thissubsection addresses a written notice of termination to customers subject totermination of scrvicm to bc mailed "rstot less tha» te» (l0j days prior tu rerminatloir%service..." and the required contents of that notice. Prepay participants will notreceive this 10-day notice. Instead, they will begin rccciving daily alerts 10 daysbefore the projcctcd day upon which their Prepay account will reach zero, via onc ormore clcctronic media of their choice (including phone calls, email, IVR, in-homedisplay devices, and text mcssaging), stating how much energy remains in theiraccount and urging them to add funds to their account to avoid scrvicc interruption.These alcns will not contain information required by Regulation 103-352(a) relativeto 10-day mailed "final notices.'owever, the information regarding theparticipant's recourse to contact the ORS and thc circumstances under which scrviccto Prepay participants may bc disconnected will bc available on PFC's wcbsite andwill be provided to all Prepay participants in the introductory materials provided touuch participant. Regarding Regulation 103-352(a)(3)(a), customers who qualify as aspecial nccds account customer will not bc cligiblc for Prepay; however, Pl C willcontinue to publish its procedures for termination of service on its wcbsite, which willalso contain similar information relative to I'repay. The December to Marchdisconnection moratorium (103-352(aX3)(b)) for customers for whom "termi»etio»ofelectric service would be especially dangerous tu such person's lreulth" will not bcavailable to Prepay participants. PFC will, hosvcver, defer disconncctions on a day-by&ay basis in ihc event ol'xtremc hot or cold weather (in accordance withdisconnect proccdurcs filed with thc ORS in 2006), thc same as with all other SouthCarolina PEC customers.PEC requests waiver of Subsection (b) of this Regulation in its entirety. 'I'his

subsection states: "trtot mure than nvo business days prior to termi»atio» of service,tire eleetncal »tiliry stroll »iake reaso»able efforts by relepho»e or i» person racu»tact the crtstumers that are subject tu ter»ri»ation ofsen'ice io notify him that hissenrice is s»bject tu termi »etio» for»un-payr»e»t. Atter»uti eely, not more than threebusiness days prior to ten»i»aria» of senlce, tire «leitrlcal utility shall norify thecosta»ier by»rail that he is subject tu terminatio» of service for»o»-payme»t. Theelectrical iitility shall mal»ral» records of the efforts made to ca»tact .suchcustomers." Prepay participants will not be contacted in the manner prescribed bySubsection (b). Instead, they will begin rccciving daily alerts 10 days before thcprojected day upon which their Prepay uccount will reach zero, via onc or moreelcctmnic media of their choice (including tclcphonc), stating how much energyremains in their account and urging them to add funds to their account to avoidscrvicc inicrruption.PEC rcqucsts waiver ol'ubsection (c) in its cntircty. This subsection rcquircsutilities ui "provide for the arrungeme»t of a deferred payme»t plan to enable unside»rial customer ra make payment by inst»lime»ts where such customer is u»ableto psry tire amuu»t due for elecrrical service," and specifies how thc utility shalladminister such installment plans by adding a portion ol'he customer's debt to future

Residential Prepay Pilot Program Pago 23 of 26

will not be applicable to Prepay participants because, as noted before, PF.:C will not be rendering monthly bills for previouslyincurred usage based upon monthly meter readings. Because Prepay participants will pay lor their usage before it is incurred, they will be protected from accumulating balances for failure to pay for previously-incurred usage. They will be able to prepay for electricity in increments that meet their financial needs or constraints, and will be able to track their daily usage and thus decide when to add an additional amount to their Prepay account to avoid service interruption.

• PEC requests waiver of the following portion of Subsection (d): " ... or to make arrangements for the satisfaction of the balance of his account through a deferred payment plan ... " As explained in the requested waiver of Regulation 103-352(c) above, PEC will not be offering deferred payment plans to Prepay participants. However, when a Prepay participant informs PEC that he is having difficulty paying enough to avoid service interruption, PEC will advise the customer that he may wish to call the local social service agency for assistance (as it presently docs with all customers). This information will also be available on PEC's website and will be provided to all Prepay participaruts in the introductory materials provided to each volunteer participant.

• PEC requests waiver of Subsection {e), which requires the utility to "maintain a record of all deferred payment plans established with customer subject to termination for a period of two years." As explained in the waiver to Regulation 103-352{c) above, deferred payment plans will not be applicable to Prepay customers. However, as noted earlier, PEC does maintain customer records in accordance with the 2-year provision of Regulation I 03-311 and will continue to maintain those records for all customers, including Prepay participants. Those customer records will contain records of any deferred payment plans established before the customer enrolled in Prepay.

• PEC requests waiver of Subsection (I) in its entirety. This subsection requires utilities to "provide a copy of the termination notice to any third party identified by the c11stomer 11pon establishment of the service account or at any time thereafter. " As explained earlier, Prepay participants will not receive written disconnect notices, but will receive daily alerts on various media of their choice for the last 10 days before the projected date upon which the balance on their Prepay account is projected to reach zero. Third-party notification of impending disconnection will not be offered in this Program. However, third parties provided with the customer' s account number will be able to make payments on the customer's account from anywhere in the country, by phone (credit or debit card); or at any MoneyGram location.

• PEC requests waiver of Subsection (g), which specifies that "Electric service may be terminated only on Monday through Thursday between the hours of 8:00 a.m. and 4:00p.m., unless provisions have been made for the availability of the acceptance of payment and the reconnection of service. Electric service may not be terminated on the day preceding any day on which the electric 11tility 's collection offices are closed, unless provisions have been made for the availability of the acceptance of payment and the reconnection of service. All employees of electrical utilities assigned to terminate service shall be alllhori:ed to accept payment from customers subject to termination of service or in lieu thereof, at the electrical utility's option, allow such

Residential Prepay Pilot Program J>agc 24 of26

monthly bills. l)ufo(red payment plans will nut be applicable to Prepay participantsbecause, as noted before, PFC will not be rendering monthly bills for prcviously-incurred usage based upon monthly mctcr readings. Because Prepay participants willpay for their usage before it is incurred, they will be protected from accumulatingbalances for failure to pay for previously-incurred usage. They will bc able to prepay1'or clcctricity in increments that meet their linancial needs or constraints, and will bcable to track their daily usage and thus decide when to add an additional amount totheir Prepay account to avoid service interruption.

~ PEC requests waiver ol'he following portion of Subsection (d): "...or to makearrangemenis for the satisfactiun of (he balance of his accoun( through a deferredpayment plan..." As explained in thc rcquestcd waiver of Regulation 103-352(c)above, PFC will not be offering deferred payment plans to Prepay participants.I lowcver, when a Prepay panicipant informs PEC that he is having dilliculty payingenough to avoid service interruption, PEC will advise thc customer that he may wishto call the local social service agency for assistance (as it presently docs with allcustomers). This inl'ormation will also bc available on PEC's websitc and will bcprovided to all Prepay participants in thc introductory materials provided to eachvoluntccr participunb

~ PEC requests waiver of Subsection (e), which requires the utility to "niaintain arecord ofall deferred puynieni plans established wi(h customer subfem to (erniinuiionfor a period of ni o years. " As cxplaincd in thc waiver to Regulation 103-352(c)above, dc(i:rred payment plans will not be applicable to Prepay customers. However,as noted earlier, PFC does maintain customer records in accordance with the 2-yearprovision of Regulation 103-311 and will continue to maintain those records for allcustomers, including Prepay participants. Those customer records will containrecords of any deferred payment plans cstablishcd before the customer cnrollcd in

Prepay.~ Pl)C requests waiver of Subsection (f) in its entirety. This subsection requires

utilitics to "provide a copy of the termination no(ice to any third party identified by(lie cuitoiner upon establishnnnt of the service accunn( or at any (ime ihereafier."As explained earlier, Prepay participants will not receive written disconnect notices,but will rcccivc daily sleds on various media ol'heir choice for thc last 10 daysbefore thc projcctcd date upon which thc balance on their Prepay account is projectedto reach zero. Third-party notification of impending disconnection will not be offeredin this Program. Hosvevcr, third parties provided with the customer's account numberwill be able to make payments on the customer's account from anywhere in thecountry. by phone (credit or debit card); or at any MoneyGram location.

~ PEC requests waiver of Subsection (g), which specifies that "Electric service may beterminu(ed only on klonduy throngh Fhiirsduy berween the hours of g: 00 a.m, and4:00 p.tn., unless prov(stunt huve been otade for (Iie uvailabili(y of ihe acceptance ofpaymen( and the recunnec(ion of service. Elec(ric.service may noi be terminated onihe day preceding any day on u hlclr the electric utility '.s collemion offices ure closed,unless provisioru have beeir ntade for the availability of the acceptunce ofpaymentand the reconnection of service. A/t employees of electrical utilities assigned toterminate setsice shall be au(huriced (o accept poymentfiom nrstomers subfec( toteivnina(ion of service or in lie(i thereof, at the electrical utiliry'4 option, allow erich

Residential Prepay Pilot Program Pago 24 o(26

at least one full working day beyond the initial date set for termination the opportunity to make satisjact01y arrangements on the account at the offices of the electrical utility ... " Prepay participants will be automatically disconnected at approximately I 0 a.m. when a negative balance exists, regardless of the day of the week, holidays, etc. Prepay participants have round-the-clock electronic access to their account and can make payments virtually instantaneously in whatever amount they desire, by phone (credit or debit card); internet (via the participant's computer or internet-enabled mobile device); or at any MoneyGram location. Oecausc there will be no need for a utility employee to visit the premise when service is disconnected, the requirement for employees to accept payment from Prepay participants (or grant them an extra day to make payment) will not be applicable.


customer at icosi ane fiiii working day beyond the initial dare set for terminarion theopponunity to make satisfactory arrangeuients on the account at the offices of theeiecrricai utiiity..." Prepay participants will be automatically disconnected at

approximately 10 a.m. when a negative balance exists, regardless of thc day of theweek, holidays, ctc. Prepay panicipants have ruund-the-clock electronic access totheir uccount and can make payments virtually instantaneously in whatever amountthey desire, by phone (credit or debit card); internet (via the participant's computer orinternet-enabled mobile device); or at any MoneyGram location. Because there willbe no need for a utility cmployec to visit thc premise when service is disconnected,thc requirement I'or cmployecs to accept payment l'rom Prepay participants (or grantthem an extra day to make payment) will not bc applicable.

Rcsidcnuat Prepay Pilot I'rcgram Page 25 of 26

proposed Residential Service · Prepay Pilot Program Schedule RPP-18 Rider (Experimental) ("Tariff")


Appendix 8

PFC's proposed Residential Service - Prepay Pilot Program Schedule RPP-18 Rider(tixperimental) (

fPari fp')

Rasldonual Prepay Pilot Program Pago 26 of 26

Power & Light Company d/b/a Progress Energy Carolinas, Inc. EXPERIMENTAL (South Carolina Only)

AVAILABILITY

RESIDENTIAL SERVICE- PREPAY PILOT PROGRAM SCHEDULE RPP-18

This Schedule is available at Company's sole option on an experimental basis to a maximum of 1,000 residential customers, in South and North Carolina combined, in designated areas where Company offers prepaid billing service. Designated areas include Florence (zip codes: 2950 I, 29505). The electric service provided to Customer is to be used for domestic purposes in and about a residential dwelling unit, including electric service used on a farm and in the preparation of the farm's products for market. A residential dwel ling unit served under this Schedule may be used as a boarding house, fraternity house, tourist home, or like establishment, provided such residential dwelling unit is one which ordinarily would be used as a private residence.

Service under this Schedule is not available: (I) for processing (or handling) for market of fann products produced by others; (2) for separately metered domestic or farm operations; (3) for individual motors in excess of I 0 HP (in exceptional cases, motors as large as 15 HP may be served upon approval by the Engineering Department); (4) for commercial or industrial purposes; (5) in conjunction with Residential Service Energy Conservation Discount Rider RECD, Meter-Related Optional Programs Rider MROP, or Net Metering for Renewable Resource Rider NM; (6) for Customer with special termination codes limiting service termination, including but not limited to households utilizing medical life support equipment and households qualifying for the December-March winter moratorium on service termination; (7) to Customer who has designated a third party to receive notification of any pending termination notices; (8) in those areas where Company does not offer prepaid power service; (9) for Customer with greater than one month arrearage at the time of application; (I 0) for service in conjunction with Company's non-regulated products or services; (11 ) for service in conjunction with Area Lighting Service Schedule ALS; (12) for other uses not specifically provided for by the provisions herein; or (13) for resale service. This Schedule is also not available to residents served under a Landlord Agreement. Customer may not participate in the Equal Payment Plan, bank draft program, e-bill program, or an installment payment plan while participating under this Schedule.

This Schedule is available to customers served under the Residential Service Load Control Rider LC-SUM with applicable billing credits being applied to the prepay account. Service under this Schedule shall terminate on December 31, 2014, unless extended or terminated by order of the Public Service Commission of South Carolina.

APPLICABILITY

This Schedule is applicable to all electric service of the same available type supplied to Customer's premises at one point of delivery through one prepaid metering system.

TYPE OF SERVICE

The types of service to which this Schedule is applicable are alternating current, 60 hertz, single-phase 3 wires at Company's standard voltages of 120/240 volts served from a self-contained meter base of 200 amperes with metering capable of rendering prepaid service.


A. Basic Facilities Charge: $6.50 per month ($0.2 1355 per day)

RPP-18 Sheet I of 3

Carolina Power & Light Company d/b/aProgress Energy Carolinas, Inc.(South Carolina Only)

EXPERIMENTAL

RESIDENTIAL SERVICE - PREPAY PILOT PROGRAMSCHEDULE RPP-18

AVAILABILITY

This Schedule is available at Company's sole option on an experimental basis to a maximum of 1,000residential customers, in South and North Carolina combined, in designated areas where Company offersprepaid billing service. Designated areas include Florence (zip codes: 29501, 29505). The electric serviceprovided to Customer is to bc used for domestic purposes in and about a residential dwelling unit, includingelectric service used on a farm and in the preparation of the farm's products for market. A residentialdwelling unit scrvcd under this Schedule may be used as a boarding house, fraternity house, tourist home, orlike establishment, provided such residential dwelling unit is one which ordinarily would be used as aprivate residence.

Scrvicc under this Schedule is not available: (I) for processing (or handling) for market of farm productsproduced by others; (2) for separately metered domestic or farm operations; (3) for individual motors inexcess of 10 HP (in exceptional cases, motors as large as 15 HP may be served upon approval by theEngineering Department); (4) for commercial or industrial purposes; (5) in conjunction with ResidentialService Energy Conservation Discount Rider RECD, Meter-Related Optional Programs Rider MROP, orNct Metering for Renewable Resource Rider NM; (6) for Customer with special termination codes limitingservice termination, including but not limited to households utilizing medical life support equipment andhouseholds qualifying for the December-March winter moratorium on service termination; (7) to Customerwho has designated a third party to receive notification of any pending termination notices; (8) in thoseareas where Company does not offe prepaid power service; (9) for Customer with greater than onc montharrearage at the time of application; (10) for service in conjunction with Company's non-regulated productsor services; (! I) for service in conjunction with Area Lighting Service Schedule ALS; (12) for other usesnot specifically provided for by the provisions herein; or (13) for resale service. This Schedule is also notavailablc to residents served under a Landlord Agreement. Customer may not participate in the EqualPayment Plan, bank draft program, e-bill program, or an installment payment plan while participating underthis Schedule.

This Schedule is availablc to customers served under thc Residential Service Load Control Rider LC-SUMwith applicable billing credits being applied to the prepay account. Service under this Schedule shallterminate on December 31, 2014, unless extended or terminated by order of the Public Service Commissionof South Carolina.

APPLICABILITY

This Schedule is applicable to all electric service of the same available type supplied to Customer's premisesat one point of delivery through one prepaid metering system.

TYPE OF SFRVICE

The types of service to which this Schedule is applicable are alternating current, 60 hertz, single-phase 3

wires at Company's standard voltages of 120/240 volts served from a self-contained meter base of 200amperes with metering capable of rendering prepaid service.

MONTH Y ND DAILY RATES

A. Basic Facilities Charge: $6.50 per month P0.2/355 per day)

RPP-18 Sheet I of 3

Period of July -October Billing Period of November- June

9.868¢ per kWh 9.349¢ per kWh

C. Other Charges:

In the event Customer receives service under Street Lighting Service (Residential Subdivisions) Schedule SLR, such monthly charges, plus applicable SC Franchise Tax, shall be divided by 30.4, rounded to 5 significant digits, and billed on a daily basis consistent with the billing of the Basic Facilit ies Charge.


Monthly billing will be calculated using the above rates and conventional billing practices. Following calculation of the monthly bill, an adjustment will be made to the prepay account for any difference between the calculated monthly bill and the bill calculated at the daily rates stated above.


Fuel and related environmental costs as set forth in Rider No. 398 and demand side management and energy efficiency costs as set forth in Rider DSM/EE-3 are included in the above charges and are subject to adjustment by order of the Public Service Commission of South Carolina. The rates applicable under Rider DSM/EE-3 are provisional and are therefore subject to true-up with interest upon further review by the Office of Regulatory Staff and the Public Service Commission of South Carolina.


To the above charges will be added any applicable South Carolina sales tax, and for those customers within any municipal or other local governmental jurisdiction, an appropriate amount to reflect any franchise fee, business license tax, or similar percentage fee or tax, or charge in lieu thereof imposed by such entity.


Prepaid electric service shall be purchased only at locations designated by Company. Customer is responsible for any fees or other charges associated with the selected payment option. Payments will be accepted at all MoneyGram locations. Payments may also be made via credit or debit card, for single or recurring payments, via telephone, the internet or an internet-enabled mobile device; however, a $1 per transaction fee will be immediately deducted by Company for payments using credit or debit cards. If service has been disconnected, Customer must purchase a minimum of 2 days of power, based upon Customer's average consumption, to have service restored. Reconnection of service is expected within no greater than 2 hours of receipt of payment when using these payment options.

Customer should not utilize other payment methods, including but not limited to paystations, EasyPay or US Postal Service, as such methods will cause substantial delays in posting payments to Customer's meter and may result in disconnection until the payment posts.

If Customer incurs a charge, including but not limited to an outstanding balance following disconnection or a Service Charge, it will be immediately deducted from Customer's payment.

In the event Customer has an indebtedness with Company for electric service previously provided, twentyfive percent (25%) of payments will be applied to any arrearage that exists at the time prepay service is initiated until the indebtedness is satisfied. In the event Customer has an electric service deposit with Company at the time Customer elects to take service under this Schedule, the deposit, plus interest, shall be posted to the prepaid account once all outstanding indebtedness for prior service is satisfied, unless otherwise directed by Customer.

RPP-18 Sheet 2 of3

B. Kilowatt-Hour Charge:

Billing Period of July —OctoberBilling Period of November — June

9.868iI per kWh9.349il per kWh

C. Other Charges:

In the event Customer receives service under Street Lighting Service (Residential Subdivisions)Schedule SLR, such monthly charges, plus applicable SC Franchise Tax, shall be divided by 30.4,rounded to 5 significant digits, and billed on a daily basis consistent with the billing of thc BasicFacilities Charge.


Monthly billing will be calculated using the above rates and conventional billing practices.Fo! lowing calculation of the monthly bill, an adjustmcnt will be made to the prepay account for anydiffercncc bctwccn thc calculated monthly bill and thc bill calculated at the daily rates stated above.


Fuel and related environmental costs as set forth in Rider No. 39B and demand side management and energyefficiency costs as set forth in Rider DSM/EE-3 are included in the above charges and are subject toadjustment by order of the Public Service Commission of South Carolina. Thc rates applicable under RiderDSM/EE-3 are provisional and arc therefore subject to true-up with interest upon further review by theOffice of Regulatory Staff and the Public Service Commission of South Carolina.

SALES AND FRANCHISE TAX OR P YMENT IN LIEU TIJEREOF

To the above charges will be added any applicable South Carolina sales tax, and for those customers withinany municipal or other local governmental jurisdiction, an appropriate amount to reflect any franchise fcc,business license tax, or similar percentage fee or tax, or charge in lieu thereof imposed by such entity.


Prepaid electric service shall be purchased only at locations designated by Company. Customer isresponsible for any fees or other charges associated with the selected payment option. Payments will beaccepted at all MoncyGram locations. Payments may also be made via credit or debit card, for single orrecurring payments, via telephone, the internet or an internet-enabled mobile device; however, a $ 1 pertransaction fee will be immediately deducted by Company for payments using credit or debit cards. Ifservice has been disconnected, Customer must purchase a minimum of 2 days of power, based uponCustomer's average consumption, to have service restored. Rcconnection of service is expected within nogreater than 2 hours of receipt of payment when using these payment options.

Customer should not utilize other payment inethods, including but not limited to paystations, EasyPay or USPostal Service, as such methods will cause substantial delays in posting payments to Customer's meter and

may result in disconnection until the payment posts.

If Customer incurs a charge, including but not limited to an outstanding balance following disconnection ora Service Charge, it will be immediately deducted from Customer's payment.

In thc event Customer has an indebtedness with Company for electric service previously provided, twenty-five percent (25'/0) of payments will be applied to any arrearage that exists at the time prepay service is

initiated until the indebtedness is satisfied. In the event Customer has an electric service deposit with

Company at the time Customer elects to take service under this Schedule, thc deposit, plus interest, shall be

posted to the prepaid account once all outstanding indebtedness for prior service is satisfied, unlessotherwise dircctcd by Customer.

RPP-18 Sheet 2 of'3

AND RECONNECTION OF SERVICE

At such time as the value of the electric service consumed equals or exceeds the prepaid purchases, electric service will be disconnected by the prepaid metering system until additional purchases are made. Disconnection will occur at approximately I 0:00 a.m. when a negative balance exists and may occur on holidays or weekends. Daily charges associated with the Basic Facilities Charge and Schedule SLR, if applicable, will continue to accrue during the period of service disconnection and will be immediately deducted from the next payment.

CONTRACT PERIOD

The initial Contract Period for service under this Schedule shall be for thirty (30) days. A customer may request tennination of service under this payment option at any time following expiration of the initial Contract Period with any outstanding payment balance being refunded after all indebtedness is satisfied.


Consumption, billing infonnation and other corporate communications such as bill inserts will be communicated via an internet/web portal, electronic mail messages, text messages, and telephone, as appropriate and designated by Customer. Upon request, an optional in-home display device will be available at no charge to the first 250 customers requesting this device in lieu of other methods of contact. Customer shall select one or more alert notifications regarding program notices, payment notices or balance notices via their designation communication option(s). Company will not mail or deliver regular monthly bill payment and consumption information to Customer.

In the event the in-home display device is damaged by acts of Customer or others, Customer shall pay a replacement charge of $190. Correspondingly, if Company requests and Customer fails to return the inhome display device to Company at such time as Customer discontinues receiving service under this Schedule, Customer shall also pay a charge of $190 to Company. Company reserves the right, in its sole discretion, to transfer ownership of the device to Customer at the end of the pilot.

GENERAL

Service rendered under this Schedule is subject to the provisions of the Service Regulations of Company on file with the Public Service Commission of South Carolina. The Public Service Commission of South Carolina has waived the application of certain Regulations regarding meter reading, disconnection of service, bill presentation and notice requirements due to the unique nature of Prepay. In case of conflict between any provisions of this Schedule and the Service Regulations, the provisions of this Schedule atl!d the Commission waiver of its Regulations shall apply.

Effective for prepaid service and purchases on and after ____ _, 2012 SCPSC Docket , Order No. ___ _

RPP-18 Sheet 3 of 3

DISCONNECTION AND RECONNECTION OF SERVICE

At such time as the value of the electric service consumed equals or exceeds the prepaid purchases, electricservice will be disconnected by the prepaid metering system until additional purchases are made.Disconnection will occur at approximately 10:00 a.m. when a negative balance exists and may occur onholidays or weekends, Daily charges associated with the Basic Facilities Charge and Schedule SLR, ifapplicable, will continue to accrue during the period of service disconnection and will be immediatelydeducted from the next payment.

CONTRACT PERIOD

The initial Contract Period for service under this Schedule shall be for thirty (30) days. A customer mayrequest termination of service under this payment option at any time following expiration of the initialContract Period with any outstanding payment balance being refunded after all indebtedness is satisfied.


Consumption, billing information and other corporate communications such as bill inserts will bccommunicated via an internet/web portal, electronic mail messages, text messages, and telephone, asappropriate and designated by Customer. Upon request, an optional in-horne display device will beavailable at no charge to the first 250 customers requesting this device in lieu of other methods of contact.Customer shall select one or inore alert notifications regarding program notices, payment notices or balancenotices via their designation communication option(s). Company will not mail or deliver regular monthlybill payment and consumption information to Customer.

In the event the in-home display device is damaged by acts of Customer or others, Customer shall pay areplacement charge of $ 190. Correspondingly, if Company requests and Customer fails to return the in-home display device to Company at such time as Customer discontinues receiving service under thisSchedule, Customer shall also pay a charge of $ 190 to Company. Company reserves the right, in its solediscretion, to transfer ownership of the device to Customer at the end of the pilot.

GENERAL

Service rendered under this Schedule is subject to the provisions of the Service Regulations of Company onfile with thc Public Service Commission of South Carolina. The Public Service Commission of SouthCarolina has waived the application of certain Regulations regarding meter reading, disconnection ofservice, bill prcscntation and notice requirements due to the unique nature of Prepay. In case of conflictbetween any provisions of this Schedule and the Service Regulations, the provisions of this Schedule andthe Commission waiver of its Regulations shall apply.

Effective for prepaid service and purchases on and aflerSCPSC Docket , Order No.

, 2012

RPP-18 Sheet 3 of 3

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