Getting Creative with Revenue 1
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1 Exemplary Programs Getting Creative with Revenue May 23, 2017 Getting Creative with Revenue 1
2 Welcome Webinar will be 60 minutes in length with time for questions. Audio is through your telephone or computer microphone & speakers. The webinar phone line will be muted during the presentation because we are recording. Questions can be typed in throughout the webinar and will be answered at the end by the speakers Copyright AWE. All Rights Reserved Purpose of This Webinar As part of our series showcasing Exemplary Programs of AWE partners, this webinar will feature: Examples of non traditional utility ventures and revenue sources that are helping strengthen utility fiscal health, increase utility efficiency, and provide benefits for ratepayers. Getting Creative with Revenue 2
3 Why Get Creative with Revenue? What Really Affects Revenue Stability? Reduced demand from: efficient fixture replacement under the plumbing and appliance codes active conservation programs the recession: industrial shift layoffs, home foreclosures Reduced peak demand in wet years Increased infrastructure costs Rise in other fixed costs Continuing Inflation Getting Creative with Revenue 3
4 Conservation is Part of the Solution It is a long term cost reducer to the utility Revenue loss is often due to other drivers Every gallon saved is water that does not have to be pumped, treated and delivered Conservation is an investment and short term effects must be planned for Reduced utility costs generally mean reduced customer rates in the long term due to avoided infrastructure capacity increases AWE s Financing Sustainable Water Building Better Rates in an Uncertain World: A Handbook to help develop rates that balance revenue stability, resource efficiency, and fiscal sustainability AWE Sales Forecasting and Rate Model: Innovative, user friendly tool to model scenarios, solve for flaws, and incorporate uncertainty into rate making FinancingSustainableWater.org: Web based resources to convene the latest research and information in one location Getting Creative with Revenue 4
5 An Evolving Utility Business Model Testing new rate designs that prioritize efficiency, equity and affordability Looking beyond the ratepayer for revenue sources Developing new services outside of water rates Today s Speakers Donnel Brown, Senior Utilities Customer Service Representative Connecticut Water Matt Stosse, Procurement Manager Connecticut Water Alan Heymann, Chief Marketing Officer DC Water and President, Blue Drop Getting Creative with Revenue 5
6 Exemplary Programs Connecticut Water s Linebacker Program Donnel Brown, Senior Utilities Customer Service Representative, Connecticut Water Matt Stosse, Procurement Manager, Connecticut Water Connecticut Water Overview Connecticut Water is a regulated subsidiary of Connecticut Water Service Inc. Serves over 90,000 service connections about 300,000 people 56 towns throughout Connecticut Getting Creative with Revenue 6
7 Initial Connecticut Offering Approval from Connecticut Department of Public Utility Control to add charge to periodic water bill Created and registered the Linebacker name with the United States Patent and Trademark Office Marketing material developed Service Line program launch, March of 2000 Service Line Coverage Curb box & cover Cellar shut off valve Meter pit & associated parts Residential service lines up to 1 ½ Commercial up to 2 One time application of pavement patch and/or loam & seed Getting Creative with Revenue 7
8 Customer Marketing Bill Inserts Direct Mail Informational Brochures Letters from President Postcards Telemarketing Initial launch price $64/yr. Customer Enrollments Customers new to Connecticut Water receive welcome packet which includes Linebacker offer Most customers enroll on quarterly bill via phone, web or mail response Annual or pre paid provide payment at time of enrollment Getting Creative with Revenue 8
9 Customer & Utility Win Customer Peace of Mind Service line protected by trusted utility Qualified, licensed contractors Over 16% eligible residential enrolled 2 years from launch Utility Prompt, hassle free repairs generating a new revenue stream Use external contractors and CWC Construction Teams Expanding the Program In 2004 we partnered with Home Service to offer: Internal plumbing repair Wastewater coverage Venture with Home Service Experienced customer growth in expanded offerings Conclusion of agreement in 2009 parted ways Felt we could provide service Getting Creative with Revenue 9
10 2010 New Services Launched Bundled Services Plan Plan Price Covered Repairs Water Service Line Linebacker Complete Linebacker Plus Linebacker Water $185/yr. ($.50/day) $140/yr. ($.38/day) $85/yr. ($.20/day) Water, WW Lines & in home plumbing leaks/breaks Water line & clogs/breaks to internal/external WW lines Water line breaks or leaks between curb and water meter WW Line In Home Plumbing Getting Creative with Revenue 10
11 Coverage Levels Coverage Levels Linebacker Water Linebacker Plus Linebacker Complete Covers up to $10,000 for water service line repair costs per calendar year The cost of water turn off/on fees otherwise charged by the CWC Covers up to $4,000 for any single wastewater repair Covers clearing of wastewater line clogs caused by tree roots once per calendar year Covers up to $2,000 for any single in home plumbing repair Repair Services Trained Call Center Staff Local Contractor Base Service 24/7/365 Experienced, Licensed & Insured Excavation Contractors Plumbing/Waste Water Contractors Licensed, Insured & Background Checked 91.8% Customer Satisfaction Rating Getting Creative with Revenue 11
12 Average Repair Costs Service Line Repair: $1,600 Wastewater Clog Removal In home: $360 Wastewater Clog Removal Outside: $530 Hand Valve Before Meter: $320 In Home Plumbing: $ Connecticut Water Data CT Linebacker Revenue Since 2010 over 50% increase in revenue Increased conversion to expanded plans Getting Creative with Revenue 12
13 Maine Water Launched Service Line Protection in 2013 $85/year similar coverage to Connecticut offering Over 7% Enrolled Advantage of Connecticut Water success Positive Customer Feedback Non-CWC Service Areas Launched linebacker to non CWC service areas throughout CT in 3Q Advertising campaign through print and social media. Engaged in sponsorship opportunities as a way to introduce ourselves to the surrounding communities and build brand recognition. Getting Creative with Revenue 13
14 Satisfied Customers I could not believe how much I saved through the Linebacker Program. It paid for itself in just one service alone. Thank Heaven for the Linebacker Program B.U. South Windsor Ironically, our neighbor next door had the same problem occur at the same time. We had the Linebacker service, he didn t. He paid a couple thousand dollars, we paid nothing. Linebacker is worth every penny! J.B. Rockville First time using Linebacker. Couldn t be more pleased. E.O., Old Saybrook Satisfied Customers Getting Creative with Revenue 14
15 Conclusion Service line protection rolled out in 2000 Nearly 17 years experience program management Established repair contractor base Over 26% of eligible residential customers enrolled Expanded protection rolled out in years experience successful program operation Established plumber & drain cleaning contractor base Over 30% of enrolled customers select expanded plan Expand to Maine Water in 2013 Expand to Non CWC customers in 2015 A True Win-Win Program received favorably by customers Optional offering so entirely customer s choice Provides valued service Relies on company s brand and reputation Expands revenue sources for company which reduces pressure on customers rates Getting Creative with Revenue 15
16 Thank you Your Questions & Feedback Donnel Brown & Matt Stosse Connecticut Water Company Exemplary Programs DC Water s Blue Drop Alan Heymann Chief Marketing Officer, DC Water President, Blue Drop Getting Creative with Revenue 16
17 1. What is Blue Drop? Blue Drop is a separate, nonprofit organization created by DC Water in November, Board Resolution #16 90: 2. Why is there a Blue Drop? A brief detour into DC Water s history... Water Utility 1.0 Getting Creative with Revenue 17
18 2. Why is there a Blue Drop? A brief detour into DC Water s history... Water Utility Why is there a Blue Drop? A brief detour into DC Water s history... Water Utility 2.0 Getting Creative with Revenue 18
19 2. Why is there a Blue Drop? A brief detour into DC Water s history... Water Utility Why is there a Blue Drop? A brief detour into DC Water s history... Water Utility 3.0 Transforming a business model from waste disposal to resource recovery Blue Drop gives you access to expertise from across DC Water. Getting Creative with Revenue 19
20 3. What does Blue Drop do? Blue Drop provides consulting services to other utilities, focused at the moment on external affairs and stakeholder engagement. Blue Drop markets and sells Bloom (DC Water s biosolids), under an agreement with DC Water. Blue Drop aspires to build or participate in a network for utilities other than DC Water to provide consulting services to each other. 4. Who is Blue Drop? Core Team 3.75 DC Water employees are detailed to Blue Drop. Alan Heymann, President ( Manager ) Vice President Problem Solver Director of Business Development Project Support DC Water employees who work occasionally on specific Blue Drop projects. Office of External Affairs Blue Drop Employees (June 2017) Director of Operations Director of Client Services Getting Creative with Revenue 20
21 5. What are Blue Drop s projects? Bloom Marketing and sales agreement between Blue Drop and DC Water. Marketing fee to Blue Drop. Short haul transportation cost reimbursed. Revenue stays with Blue Drop; DC Water saves on land application. On track to meet target of 10,000 tons diverted from land application in FY Represents cost savings of more than $200, What are Blue Drop s projects? Consulting New Jersey Began 2016 under DC Water. Consulting for 8 utilities and municipalities now beginning the planning process for CSO control. Stakeholder engagement. York Region (Ontario, Canada) Began January Strategic communications planning and organizational development. Capital Region Water (Harrisburg, Pa.) Began April Comprehensive communications planning and stakeholder engagement. Getting Creative with Revenue 21
22 6. What are Blue Drop s projects? New business development Annual utility leadership conferences CEO/GM speaking engagements Market research underway shortly What is the sweet spot for Blue Drop? Size, governance, services offered? Incoming staff resources devoted to business development and client services. DC Water management survey on potential services. Limiting factor DC Water staff have their own jobs to do. 7. What s next for Blue Drop? Integrate new staff and build up business development. Financial controls and bookkeeping support. Focus groups, market research. Strategic planning. The definition of success. Partnering with other enterprises AWE! NACWA, WEF, AWWA, AMWA EPA Getting Creative with Revenue 22
23 Further questions? Alan Heymann President, Blue Drop (202) x101 In closing Many thanks for joining us! Questions? A PDF and a link for this recorded webinar will be available in a few days. Additional questions? Send to Liam at liam@a4we.org. Don t miss these future AWE webinars: 1. June 20: EPA/AWE/ IA Webinar: WaterSense and SWAT What s the Difference? 2. June 22: Net Blue: Water Neutral Growth Ordinance Getting Creative with Revenue 23
24 Thank You for attending the webinar! Getting Creative with Revenue 24
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