SRP Prepaid Electric Service Program 1 Salt River

SRP Prepaid Electric Service Program 1

Salt River Project • Political subdivision of Arizona founded in 1903 • 2 nd largest electric utility in Arizona serving over 1 million residential, commercial, and industrial customers • 3 rd largest public power utility in the U. S. • Provides roughly 1 million acre-feet of bulk water to Phoenix area NEUAC 06/27/2018 2

Customer Services Mission/Vision Customer Operations Mission: We anticipate and deliver the ultimate customer experience to generate customer satisfaction that is among the best across industries. Customer Operations Vision: Our customer’s journey with us is: • Rewarding, Easy and Pleasant • Focused on value and innovation as defined by our customer • Proudly and safely provided by people who care NEUAC 06/27/2018 3

M-Power Today • Largest Prepayment Program in North America with more than 157, 000 Active Customers • Represents 17% of our residential customer base • Provided as a voluntary alternative to standard residential Price Plans NEUAC 06/27/2018 4

Growth in M-Power Customers 180, 000 160, 000 140, 000 120, 000 100, 000 80, 000 60, 000 40, 000 20, 000 0 NEUAC 06/27/2018 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 5

Next Generation Prepay SRP Systems M-Power App Remote Communication $ Customer Remote = over the air NEUAC 06/27/2018 6

SRP Pay. Center Locations NEUAC 06/27/2018 7

Pay. Center Machine Usage & Satisfaction 92% 93% 35% 37% 35% 56% 55% 58% FY 13 (n=1262) FY 14 (n=1272) FY 15 (n=1262) 91% NEUAC 06/27/2018 94% 30% 64% FY 16 (n=1264) 93% 36% 35% 57% 58% FY 17 (1265) FY 18 YTD (n=1263) 8

Benefits of Prepay • Lower startup cost: $114 plus tax, paid over time • compared to $290 deposit • Real-time display helps manage energy • Pay for electricity as you use it • Better control over budget and cash flow • Ability to pay down past due and remain in power NEUAC 06/27/2018 9

Benefits (continued) • Real-time information • Real-time remote payments • Prepay App • No surprise bills or late charges • View days remaining NEUAC 06/27/2018 10

Benefits (continued) • No credit check • Cancel without penalty • Unused credit returned upon cancel • Friendly credit every night • Monthly discount for income eligible customers NEUAC 06/27/2018 11

Benefits to SRP • Reduced credit related costs • Positive, no up-front cost option to offer customers • Avoid negative customer interaction • Energy management • Passive collections • Highly satisfying program NEUAC 06/27/2018 12

Satisfaction with M-Power Program 91 92% 91% 23% 22% 68% 69% FY 13 FY 14 90% 92% 25% 24% 26% 70% 66% 66% FY 15 FY 16 FY 17 FY 18 YTD Very Satisfied NEUAC 06/27/2018 Satisfied 13

Reasons for Signing Up for M-Power 74% 69% 77% 72% 75% 67% 55% 62% 44% 45% 36% 37% 33% 29% 27% Nov 15 -Jan 16 (FY 16 Q 3) 76% 64% 59% 43% 36% 33% 25% Aug 15 -Oct 15 (FY 16 Q 2) 77% 55% 53% 38% 23% Feb 16 -Apr 16 (FY 16 Q 4) May 16 -Jul 16 (FY 17 Q 1) 52% 55% 47% 38% 34% 39% 33% 28% 27% Aug 16 -Oct 16 (FY 17 Q 2) 57% Nov 16 -Jan 17 (FY 17 Q 3) 44% 41% 35% Feb 17 -Apr 17 (FY 17 Q 4) 49% 74% 60% 46% 45% 31% 38% 32% 28% 30% May 17 -Jul 17 (FY 18 Q 1) Aug 17 -Oct 17 (FY 18 Q 2) Family/Friend recommended Pay off past bills Previous M-Power Avoid late fee/disconnect Reduced deposit to start service Control over electricity usage NEUAC 06/27/2018 The top three reasons for enrolling in M-Power continue to be: Control over electricity usage (74%), Reduce deposit to start service (60%), and Previous M-Power customer (46%). 14

M-Power Customer Opinions (FY 18) M-Power could help a lot of people 40% Use electricity more wisely 40% 18% 87% 51% 29% Use a lot less electricity 86% 43% 33% Helped me manage finances 96% 44% Prefer M-Power over monthly billing Household discusses more about electricity 56% 46% 38% 84% 75% 56% Strongly Agree Lifestyle greatly inconvenienced NEUAC 06/27/2018 8% 24% 32% Agree 15

User Display Terminal – Screens Used Most Often (FYTD 18) Remaining credit balance 82% Cost today 28% Cost this month 19% Cost yesterday 17% Cost last month 17% Estimated number of days of credit remaining 22% Cost per hour Other NEUAC 06/27/2018 The most frequently viewed screen is the remaining credit balance (82%). 18% 6% % Answering 16

Customer’s Comments • “What caught my eye is that we didn’t have to put this huge amount on the card at first. We could pay it off slowly. I was really happy to see this option. ” • “It made me feel uneasy at first just because I was so used to a bill, but now I love M-Power…never want to go a normal bill. ” • “Reps were awesome, They were really good at explaining the whole program to me over the phone. Very simple and to the point. I felt really good about my decision to make the switch. ” NEUAC 06/27/2018 17

Customer’s Comments • “When we are going somewhere like running errands, we will just reload. ” • “I like watching all the usage and information on the box. ” • I would rather now go back to M-Power because I now pay a lot more than I was for my electric bill. NEUAC 06/27/2018 18

Customer’s Comments • “New meter for m-power is so nice. Great job SRP on this nice upgrade. It is really nice to pay from your phone an you can see what your spending every day. Amazing one happy customer. Thank You” • FINALLY!!! I WISH YOU WOULD HAVE DONE THIS A FEW YEARS AGO!! This is so much easier. . especially when you don't have a car and it is 115 degrees outside!! Anyways thank you again!” • “I have been looking forward to this M power feature ever since I started using M power 7 years ago. I love using M power because I can manage and see my electric usage. This app is going to make buying electricity fast, simple and one less errand in the car. Thank you SRP!!!” NEUAC 06/27/2018 19

Community-Based Organization Speaks “We have noticed that clients who are budget conscious prefer the pay as you go option and purchase when they have the funds “a little bit at a time”. For people that are on a fixed income, or self employed clients this is a great way to purchase when you get the income outside of the traditional monthly or bimonthly pay schedule. Folks that get paid weekly also prefer the pay as you go rather than the monthly “big bill” allowing them to stay on track with their electric needs…” - Gene Munoz-Villafane, HS Coordinator, Vista del Camino Center NEUAC 06/27/2018 20

Next Generation of Prepay NEUAC- 06/27/2018 21

Questions? NEUAC 06/27/2018 22