Cascade Natural Gas: New Behavioral Programs in Washington State
5%+
annual savings for low-consumption customers
90%
email open rates
4X
higher click through rates than typical communications
TL;DR
Cascade Natural Gas piloted a new behavioral HER program that removed neighbor comparisons and replaced them with personalized, property-specific efficiency insights. The program delivered statistically significant savings and digital reports drove exceptionally high engagement.
Before
- Behavioral programs served narrow customer segments
- Traditional HERs relied on neighbor comparisons
After
- Pilot included a fully representative customer population
- Reports used personalized insights without social normalization
The Challenge
In 2023, Cascade Natural Gas Corporation in Washington State was challenged by their regulators to pilot innovative new programs as part of their residential energy efficiency portfolio. This recommendation led Cascade to explore cost-effective behavioral programs including behavioral Home Energy Reports. Other utilities in Washington had attempted behavioral programs in the past with mixed results. Cascade wanted to take a different approach in their Washington service territory of over 200,000 residences.
Cascade wanted to include their entire customer base because equity was at the forefront of their efforts. Caleb Reimer, Manager, Energy Efficiency Programs, at Cascade, said, “everything we looked at was through an equity lens, and making sure we had equitable offerings.” A new behavioral program came with risks which were reflected in other utilities’ experience with mixed results, but he emphasized the reward was worth it.
One of the common customer concerns with conventional Home Energy Reports is “neighbor” comparisons – a proven approach which utilizes social normalization. Social normalization works by comparing one customer’s energy usage to that of a “more efficient” near-by customer or a regional average. These comparisons offer an emotional incentive to adopt energy efficient practices, but they can also generate questions about the comparisons and reduce customer satisfaction in certain cases. Cascade wanted to see if they could run a behavioral program without social comparisons and still offer customers a realistic and compelling view of how they could be more energy efficient.
The Solution
Cascade ran a different kind of pilot in terms of targeting and reach. Pilot programs often focus on high consuming customers first to help establish statistical significance, and Cascade decided to run a pilot with a group of customers representative of their entire residential service territory. With a service territory that includes a mix of urban and rural areas, Cascade wanted to pull the broadest mix of customers into the program across a number of characteristics.
Accordingly, the pilot population (i.e. treatment and control groups) was designed to be statistically representative of Cascade’s entire Washington service territory. When determining statistical equivalency, Cascade considered the broadest range of annual consumption profiles, geographical coverage, and account characteristics. Brillion then divided this group into a statistically equivalent treatment and control group, with roughly half of the treatment group to receive only digital reports and the other half only paper. This random control trial setup allowed for this pilot to be evaluated with the rigor of established industry standards.
As an alternate approach to social normalization, Cascade worked with Brillion to leverage our data-powered property analysis technology, RetrofitAI. RetrofitAI uses property and consumption information to model the buildings in the treatment group and estimate the energy savings that could be achieved through a variety of changes and improvements. Instead of comparing customers to ‘efficient neighbors’ in similar buildings, our Retrofit AI analysis provided customers with specific insights into efficiency opportunities in their own home and in their own behavior.
During the pilot, customers in the treatment groups received a series of 6 reports over the course of 12 months – each report contained three personalized low-cost efficiency tips, a year-over-year monthly bill comparison, and a cost-based summary of the top areas in their home for efficiency improvements.
Reimer said, “working with an existing trusted partner was extremely valuable to us. There were minimal additional resources required on our end leading to a high ROI for the program.”
The Results
After delivering the program as planned, third party evaluation revealed that the pilot treatment group achieved statistically significant savings in several modeling scenarios; indicating strong potential for cost-effective success at scale. Some of the additional key results are discussed below.
Unique Savings for a Unique Approach
The pilot program was an initial success resulting in a determination of statistically significant savings across the treatment group. Deeper analysis of the results revealed that some groups of customers saved significantly more than the average participant. Specifically, customers with annual consumption in the bottom quartile of all customers (i.e. low consuming customers) averaged annual savings of more than 5%, which is an impressive result for any program approach.
Overall, the pilot showed that new communication approaches to behavioral programs can be successful – and more research into these approaches is warranted.
The Power of Digital Communications
Digital communications proved to be a powerful communication method during the HER treatment. Email open rates peaked at over 90% and the campaign sustained an average click through rate 4 times higher than typical communications, indicating strong and sustained engagement.
“The delineation between receptiveness of digital reports and non-digital reports was really intriguing,” Reimer said. A segmentation analysis of the total results also indicated that customers who received digital reports via email generated five times as much savings as customers who received paper reports. As a result of this, and the higher cost of paper printing and mailing, digital reports were a significantly more cost-effective approach in this pilot.
“The delineation between receptiveness of digital reports and non-digital reports was really intriguing.”
Caleb Reimer, Manager, Energy Efficiency Programs, Cascade Natural Gas
The Importance of Customer Segmentation
The importance of customer segmentation, both in terms of personalization of the HERs and analysis of the results, was clear. A heavy focus on personalization was a key component to driving savings in the absence of social normalization. Analyzing the results for different customer segments across geographies, report mediums, and consumption tiers provided new insights into the types of customers that are best serviced by this new approach. Segmentation analysis also provides Cascade with a better forecast of future results as the program scales.
Based on these results, Cascade is designing the next iteration of their HER program to better understand key customer segments including income qualified and higher volume users.
