2011 Utility Payment Conference Case Study Best Practices

2011 Utility Payment Conference Case Study: Best Practices and Multi. Payment Channels – PGE’s Innovative Programs & Initiatives Tuesday, Sept 20 th 10: 45 – 11: 45 Presented by Wes Friesen, Manager – Revenue Collection & Community Offices for Portland General Electric (Note: the views expressed here are Wes’s and not necessarily PGE’s; Also, PGE does not endorse any vendors or suppliers) 1

Company Overview Portland General Electric § Oregon’s largest utility § Headquarters is located in Portland, Oregon § Fully integrated electric utility that serves 825, 000 residential, commercial and industrial customers § PGE is a recognized leader in the utility industry and has safely and dependably powered northwest Oregon since 1889 2

PGE’s Print & Mail Team

Print & Mail Services Info. Print 5000 Color Printers; Pitney Bowes Inserters (APS, FPS); other print and mail related equipment and software Only electric utility in the nation that is MPTQM certified Have earned multiple national awards for Excellence (e. g. 2008, 2009, 2010 earned NAPL’s Gold/Silver Awards) 100% Same Day production of bills for over 9 straight years, with zero significant errors! Maximize postal discounts ($3 m savings) via selective/intelligent inserting and automation/sortation work sharing; early adopter of Intelligent Mail Bar. Code

Customer Bills (June 2011) Paper Bills = 742, 977 (87. 7 %) E-Bills = 103, 977 (12. 3%) E-Bills are growing in number and %; paper bills are relatively flat in numbers Multi-Channel Bill Redesign initiative in process (moving Bills & related communications from very good to great) Paper comes from PGE Customer Boise Cascade, using sustainable fiber sources: construction/lumber mill wood waste; re-cycled paper; sustainable and certified tree farms/forests Environmental Certification (SFI) in place for envelope & forms vendors; certification in process for print & mail services SFI certification

Payment Departments Cash Remittance Mail-in Payments Electronic Billing and Payments Electronic and Third Party Community Offices Walk-in payments 6

Payment Trends 7

PGE’s Cash Remittance Team

Cash Remittance § Processes all mail-in payments for PGE § Light and Power § Agency § Non-Light and Power § Process 80+% of payments ARC § Implementing Image Cash Letter for remainder § Hardware: § Utilize OPEX 7. 5 and 51 s w/3690 i § Burroughs Quantum's § Software § Running on a UNISYS Lockbox platform 9 NOTE: PGE does not endorse any vendors/suppliers

Cash Remittance § Marksense • Redeem PGE Gift Cards • Address changes/customer comments § Bangtail envelopes for promoting PGE programs § One Check and Consolidated Bill payments § Archive of Bill Stub and Check Images 10

ISO 9001 Certification Background: Goal is Continuous Improvement Became Certified in 2009 111 Procedures, 85 Forms and full-day Audits Benefits: Changes: Quarterly Review of Vendors/Suppliers Issues Database Documented Procedures Quality Manual Change Management System Training Manual 11 Vendor reviews resulted in better service and relationships Clear training setup Changes tracked to procedures Communication of changes made more quickly Pride in meeting goals and passing audits

Agency Portal § Allows Agencies to view PGE customer’s account with permission from customer § Able to view any commitments previously made on an account, view account balances, and create a commitment on the account § Reduces calls and call times for both PGE and agency personnel § Automatically deletes commitment from account once money is posted § Huge success with Agencies – high satisfaction! 12

PGE’s Electronic Bills & Payments Team

Electronic Bills & Payments § Express Pay Locations § VCOM Kiosks § Bill Matrix § Mobile Payments via Text Message § Automatic Monthly Payments § PGE IVR check payment § Online Payments 14 You are enrolled in Auto Pay

Express Pay Locations PGE’s Express Pay stations let you pay your PGE bill at grocery stores, pharmacies and other convenient places. PGE has contracted with Fidelity Express; transitioning to Western Union. There is a $1. 50 convenience fee charged for each payment made at an Express Pay location. The $1. 50 convenience fee must be paid in cash. 15

VCOM Advantages For Customers: Convenient Locations Customer can use the system in English or Spanish Pay 24 hours a day, 7 days a week depending on the store location Ability to pay by cash or debit card (no credit cards or money orders) For PGE: Provides another convenient payment option for customers Very low cost to process payments because the customer is paying a $1. 50 fee for the service and completing the transaction on their own. 16

Bill. Matrix Advantages For Customers: A COMPANY OF Customers can use the system in English or Spanish Payments can be made via the web from a link on PGEs website or over the phone Customers can use VISA, Master. Card or Discover card, as well as any ATM / debit card that displays the Star. SM System logo. Note: There is a $600 maximum per transaction For PGE: Provides another convenient payment option for customers Very low cost to process payments because the customer is paying a $3. 95 fee for the service and completing the transaction on their own. 17

Mobile Options 18

Other Checking Account Options § Automatic Monthly Payments § Auto Pay § PGE IVR check payment § In house w/no fee § Online Payments § Recurring § One-time 19

PGE’s Community Offices Team

Community Offices • Processes walk-in and drop box payments at 7 different locations • Created PGE Gift Card Program • Process Master. Card credit and debit cards with no fee to customer • Started processing checks via Remote Deposit in February 2008; BOC in 2009 • Electronic surveying of customer experience • Elder Friendly Certified Offices 21

Community Offices Remote Capture/BOC § § Eligible items are converted to ACH § Reduction in bank fees § Bank deals with Administrative returns § Slight reduction in float time of checks § 22 Checks are captured and sent to the bank along with MICR info from the checks Payback period was less than 6 months

Gift Cards History: § Before 2007, PGE had a Gift Certificate program § Had to know address or PGE account number § Red tape did not allow PGE reps to give out personal information or verify amount owed § Money went directly on account and card was sent to PGE customer informing them of gift applied to account § 23 Not a very popular program

Gift Cards Challenges: § § How to buy or redeem gift cards § Tracking redemption of cards § Cost of gift cards § 24 Public Utility Commission’s rule on 1 year “suspense” payment rule Reconciling Redeemed/Paid accounts

Gift Cards In 2007: 979 cards sold = $36, 124 In 2008: 1, 574 cards sold = $63, 720 In 2009: 2, 539 cards sold = $76, 829 In 2010: 1, 499 cards sold = $71, 653 25

Credit Cards § Currently receiving Master. Card payments with no fee in Community offices § VISA and Master. Card can be used through Bill Matrix with a $3. 95 fee § Customer feedback supports wanting more credit card options § Challenges in getting approved in revenue requirements; looking at trying to get residential fees covered in 2013 test year § 26 Looking at future opportunities on PGE website

Future Plans § Real-time (More Frequent) Payment Posting § Quick Response 2 D barcode (payments, marketing) § Pre-paid metering § Credit Cards accepted on PGE website for residential customers for a small fee or free starting in 2013 (free only if covered in rates) § Company focus on Payments 27

Questions 28

Thank you 29