Staff Report Item 4:
Recommendation
To: Ava Community Energy Authority
From: Kelly Brezovec, Sr. Director, Account Services
Subject: Seeking feedback from the Executive Committee on an extension of Ava’s agreement with SMUD for Call Center and Data Management Services, starting at the end of the current agreement, January 1, 2025, concluding on December 31, 2026.
Date: November 6, 2024
__________________________________________________________________ Summary/Recommendation
Sacramento Municipal Utility District (SMUD) provides critical Customer Care and Data Management Services (CCDMS) to Ava via a contract priced at a per-meter monthly service fee. The current three-year contract, which resulted from a competitive solicitation process, started on January 1, 2022, and ends on December 31, 2024. The proposed new agreement is for two years and falls within the five-year allowance of our procurement policy prior to the need for another solicitation. Additionally, the proposed new contract sees a price increase from $1.00 to $1.10 per meter; staff has negotiated elements of the agreement, such as fixed fees for common customizations and new community enrollments in 2025 and 2026, as well as a future-looking $1 million credit, should Ava enter into a three-year agreement starting January 1, 2027.
Staff seeks feedback from the Executive Committee on a contract extension with SMUD for Call Center and Data Management Services for a two-year term, from January 1, 2025, through December 31, 2026.
Financial Impact
Staff Report Item 4
Ava has worked with SMUD since 2018, when Ava first started to serve customers. The contract has been priced at a monthly, per meter rate with additional fees for new programs or enhancements.
Years Per Meter Fee
2018-2020 $1.05
2021 $1.05
2022-2024 $1.00
2025-2026 $1.10
Table 1: Historical and proposed future pricing of Ava’s contract with SMUD for CCDMS services
While this 10% increase in per-meter price is a significant jump, Ava has seen a flat rate since 2022. If inflation had been applied to the $1.00 per meter price starting in 2022, the 2025 price would have been at $1.16 per meter, an additional 5.5% higher than the 2025 rate proposed in this agreement.
The total annual cost of this agreement will increase with the addition of new communities.
Table 2 provides an estimate of the annual cost of the per meter fee. In addition to the set fee, Ava should assume an additional $100-300k annually in enhancement fees, since billing is always evolving, and staff anticipates enhancing billing operations to provide benefits for Ava programs.
Meters Served, by end of Year Annual
2025
Assumes service start to
Stockton & Lathrop in April
700,500 $9.1M
2026
Assumes service start to
Unincorporated San Joaquin
County in 2026
818,600 $10.85M
Table 2: Future pricing estimates with the proposed agreement Note that Unincorporated San Joaquin County is included here as Ava has submitted a plan to the CPUC but awaits the official certification letter. The 2025 cost would remain constant in 2026 if Ava does not begin service to Unincorporated San Joaquin County.
Term
The current three-year agreement resulted from a public Request for Proposals (RFP) process in 2021; Ava’s current procurement policy allows for a five-year term before issuing a new RFP.
The proposed two-year agreement does not require Ava to deviate from our standard purchasing protocol and provides flexibility. Over the next two years, staff may perform an assessment of the benefits of bringing some or all these services in-house. Additionally, as a collaborative vendor who values our business, SMUD has added a $1 million credit to a future contract, should Ava sign a three-year agreement starting January 1, 2027.
Staff Report Item 4
Analysis and Context
Service and history
CCAs contract with third parties for data management services, and often, call center services (Call Center and Data Management Services, or CCDMS). SMUD, as Ava’s CCDMS provider, is responsible for critical operational services, including:
• Billing operations
• Data management
• Call center/customer service representatives
Sample activities:
Service Activities
Billing operations Ingest billing determinants from PG&E Send bill-ready billing information to PG&E
Apply payments to customer accounts
Data management Data feed conduit between PG&E and Ava
Develop and share customer characteristic reports
Ingest and share interval data feeds
Call center Respond to customer inquiries via chat, email, and phone Manage customer enrollment via web forms and IVR service Continue to update knowledge base with information about Ava programs
Table 3: Sample Activities of a CCDMS provider
Following a public Request for Proposals (RFP) process, Ava started service with SMUD in February 2018 with an agreement that concluded December 31, 2020. This agreement was extended for another year, until December 31, 2021. In 2021, staff issued a second RFP for CCDMS services. There are currently only two organizations providing CCDMS services to California CCAs. Staff performed a rigorous evaluation of both parties; SMUD was the selected respondent. SMUD and Ava entered a three-year agreement, starting January 1, 2022, ending December 31, 2024.
Select updates to the new agreement
While the bulk of the services SMUD provides are standard, such as providing the billing information to PG&E, there are some opportunities for negotiation and inclusion of updated pricing and services. Table 4 highlights some of these differences.
Item Current 2025-2026 Change Driver
Per meter fee $1.00 $1.10 Inflation
Common
enhancements and
updates
Priced uniquely by
request
Scheduled pricing,
set at current rates
Fix pricing to 2024
levels, expedite
regular requests
Enrollment of new
communities
Stockton, Lathrop
and unincorporated
San Joaquin County
included
Planned and
proposed community
enrollments not to
incur amendment
Staff Report Item 4
Item Current 2025-2026 Change Driver
fees for webforms
and data activities
Rate changes Included: up to six
rate changes due to
PCIA or generation
rate changes.
Included: as many
rate changes as
needed for PCIA or
generation rate
changes.
Allows Ava to change
rates with PG&E,
planned pricing for
other rate changes.
Net Energy Metering
(NEM) and Solar
Billing Plan (SBP)
Annual fees for
webform for
monthly/annual
selection, fees to
upgrade billing for
SBP
Inclusive of SBP,
webform adjustments
SBP as standard,
monthly/annual as
standard process
Real Time Pricing,
when out of pilot
n/a Real Time Pricing:
on Ava bill,
matching PG&E
framework
Looking ahead to
implementation of a
new type of rate
Billing error liability Not applicable below
$14,000
Threshold changed to
$10,000
Increased
accountability for
SMUD
Table 4: Agreement updates
Special consideration: Customer Service Team
Customer Care is one of the major components of the agreement. Ava continues to benefit from the SMUD CSR team as a vital partner in our operations. SMUD ranked second in a J.D. Power 2022 Electric Utility Residential Customer Satisfaction Survey based on their overall CSR performance, due in large part to their award-winning trainers and 8-year average tenure in the unionized call center. 100% of all calls are recorded and are available for Ava review. In addition to managing incoming phone calls, Interactive Voice Recordings, the team also responds to online chat and emails. All interactions are linked to the billing system, which both SMUD and Ava can access for reporting, quality control, and review. Ava is launching to Stockton and Lathrop in 2025, and potentially to San Joaquin County in 2026; it is important that we not disrupt the first, and potentially only, touchpoint a customer has with Ava.
The CSR team consistently receives praise from our customers and has been responsible for “retaining” over 4,300 customers since the team started tracking this metric in April 2021. In the past 12 months, nearly 1/3 of all customers that talk with a CSR during a request to leave Ava’s service to return to PG&E, stay with Ava. In some months, over 40% of customer calls result in the customer staying with Ava, due to excellent customer service. In addition to handling customer calls about bills and service, the SMUD team is also able to respond to inquiries about Ava programs, such as Health-e Communities, brand surveys, and surplus revenue credits. The team is prepared to add to their knowledge base as Ava’s local development team launches new offerings in 2025 and beyond.
Staff Report Item 4
SMUD annually posts a CSR job recruitment for their award-winning, unionized call center. As a means of encouraging local hires, since 2022, Ava’s service territory has been specifically highlighted as an area of interest for recruitment. This SMUD/Ava partnership in recruiting has resulted in 84 applications from within Ava’s territory. As of October 2024, two new hires to the SMUD CSR team are from Stockton. Ava is again partnering with SMUD to recruit local hires with in advance of a November 4, 2024, CSR recruitment event.
Next Steps
Staff will bring the recommendation and feedback from the Executive Committee to the Board of Directors on Wednesday, November 20.
Attachment
A. PowerPoint
Agreement with SMUD for Contact
Center and Data Management
Services, 2025-2026
Executive Committee
November 6, 2024
Summary
2 • Sacramento Municipal Utility District (SMUD) provides Customer Care and Data Management Services (CCDMS) to Ava
oThe current contract ends on December 31, 2024
oStaff seeks feedback on a new, two-year agreement
Services Provided
3 Data Management
•Data feed conduit between PG&E
and Ava
•Develop and share customer
characteristic reports
•Ingest and share interval data
feeds
Billing Operations
•Ingest billing determinants from
PG&E
•Send bill-ready billing information
to PG&E
•Apply payments to customer
accounts
Call Center
•Respond to customer inquiries via
chat, email, and phone
•Manage customer enrollment via
web forms and IVR service
•Continue to update knowledge base
with information about Ava
programs
Contract Updates: Fee
4 • Ava has worked with SMUD since 2018, when Ava first started to serve customers. The contract has been priced at a
monthly, per meter rate with additional fees for new
programs or enhancements.
oThe proposed new agreement sets the per meter cost at
$1.10 per meter, per month
• While this 10% increase in per-meter price is a significant jump, Ava has seen a flat rate since 2022.
oIf inflation had been applied to the $1.00 per meter price starting in 2022, the 2025 price would have been at $1.16 per meter, an additional 5.5% higher than the 2025 rate proposed in this agreement.
Meters Annual
2025 700,500 $9.1M
2026 818,600 $10.85M
Inflation
Adjusted Rate
CPI
Adjustment
2022 $ 1.00 8%
2023 $ 1.08 4%
2024 $ 1.12 3%
2025 $ 1.16
Contract Updates: Enhancements
5 Item Current 2025-2026
Enrollment of new communities n/a Stockton, Lathrop and unincorporated San Joaquin County
included
Rate changes Included: up to six rate changes due
to PCIA or generation rate changes.
Included: as many rate changes as
needed for PCIA or generation rate
changes.
Real Time Pricing, when out of pilot n/a Real Time Pricing: on Ava bill, matching PG&E framework
Net Energy Metering (NEM) and
Solar Billing Plan (SBP)
Annual fees for webform for
monthly/annual selection, fees to
upgrade billing for SBP
Inclusive of SBP, webform
adjustments
Billing error liability Not applicable below $14,000 Threshold changed to $10,000 Common enhancements and
updates
Priced uniquely by request Scheduled pricing, set at current rates
Financial Consideration: Term Length
6 • The current three-year agreement resulted from a public Request for Proposals (RFP) process in 2021; Ava’s current procurement policy allows for a five-year term before issuing a new RFP.
• The proposed two-year agreement does not require Ava to deviate from our standard purchasing protocol and provides flexibility. oAs a collaborative vendor who values our business, SMUD has added a $1 million credit to a future contract, should Ava sign a three-year agreement starting January 1, 2027.
Special Consideration: Customer Service
Representatives
7 • Customer Care is one of the major components of the agreement oResponse to phone calls, online chat and emails
• SMUD credentials and benefits
oSMUD ranked second in a J.D. Power 2022 Electric Utility Residential Customer Satisfaction Survey based on their overall CSR performance,
Award-winning trainers
8-year average tenure in the unionized call center
o100% of all calls are recorded and are available for Ava review oAll interactions are linked to the billing system, which both SMUD and Ava can access for reporting, quality control, and review.
Ava is launching to Stockton and
Lathrop in 2025, and potentially to
San Joaquin County in 2026; it is
important that we not disrupt the
first, and potentially only, touchpoint
a customer has with Ava.
8 Example Customer Compliments
I was pretty upset getting a big bill from Ava on
this month's PG&E bill and then Adrian talked
me through on the phone today around 2:30pm
and I feel totally fine about it now. Anyway, I
really appreciate him walking me through
everything - he did great. - D
I just got off the phone with Gary who did a great job
explaining why my PG&E bill had charges coming from
PG&E as well as Ava Energy for electricity. Gary... was pleasant, concise and explained complicated billing
details in plain language. I so rarely have a productive and pleasant interaction with companies, so I wanted
to make sure that I highlighted this as a real positive experience with Gary. Thanks, J & C
He understood exactly what I was asking about and
went above and beyond to make sure that I got
answers to my questions...super patient and clear
when it came to showing me...the website. He said that
he would call me back the next day, and he did! The
voicemail he left was extremely clear and provided me
the answer I needed...Ava Energy is lucky to have a
person like Eric on the team. I have high standards, and he definitely exceeded them. Thanks, C
I just received outstanding service from Adrian! I
want to commend him for his knowledge,
customer service and patience! I truly believe he
is a great asset to your company, and I just
wanted him to be recognized. Kudos for having a
great person such as Adrian work for your
company, I received amazing customer service
today! And I am grateful! - K
CSRs: Local Representatives
9 • SMUD annually posts a CSR job recruitment for their award-winning, unionized call center.
• Since 2022, Ava has partnered with SMUD to recruit new hires from within Ava's service territory
o84 applications have come from within Ava's service area oAs of October 2024, two new hires to the SMUD CSR team are from Stockton.
• Ava is again partnering with SMUD to recruit local hires with social posts in advance of a November 4, 2024, CSR recruitment event, Ava post shown here.
Next Step
10 • Staff will bring the recommendation and feedback
from the Executive Committee to the Board of
Directors on Wednesday, November 20.
Thank you!
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