Friday, June 17, 2016

Bringing the IoT to Life

On Wednesday June 15, 2016 the Smart Grid Consumer Collaborative (SGCC) hosted our “Bringing the Internet of Things (IoT) to Life” webinar. We had the pleasure of being joined by Robby Simpson, System Architect at GE Grid Solutions, Dave Oberholzer, VP of Business and Partnership Development at WeatherBug Home, and Michel Losier, Director of Customer and Community Engagement, at NB Power. This webinar helped spark the conversation as to how increased engagement with energy usage is empowering consumers through interconnected smart home devices.

Kicking off the webinar, Robby from GE provided attendees with a high-level overview of what the “Internet of Things” really encompasses. Robby explained that as the IoT industry is still evolving, there exists differing opinions as to what qualifies as a “connected device.” Casting a wide net, the IoT has generally come to mean machine-to-machine communication and devices that use the Internet Protocol (IP) to communicate with either a connected system or a human.

Building off of his explanation of the IoT, Robby provided an analogy to help attendees further understand what the future of the “connected consumer” will really mean. Through his Analogy, Robby compared home energy usage to filling your car with fuel at a gas station. When you go to the gas station, you know the exact price of the gasoline you’re purchasing, the amount you’re putting in your vehicle, and how far you can expect to drive with that gasoline. Inversely, most consumers don’t know how much their energy really costs (until they get a bill), how much energy their home is using, and what they can do with that energy, which leads to poor energy management and un-educated usage. As IoT technologies progress, energy usage may start to look more like putting fuel in a car, where the consumer is more aware of the cost and the implication of their actions.

Additionally, IoT devices will enable the integration of energy usage information into our daily lives, whether it’s via an in home display, smart phone, or online portal. Further, these IoT devices are making it possible to design, implement, and manage next-generation demand response programs, increasing the overall health of the grid. Lastly, in the near-term, these IoT devices will enable the mass integration of distributed energy resources (renewable generation) and electric vehicle charging stations without interrupting grid operations.

While Robby explained that consumers can / will further be able to connect their devices to the grid via a smart meter, internet hubs, or third party aggregators, this successful orchestration of data is reliant upon standards. As all of the IoT devices must communicate together using a common language, it is essential that all devices adhere to the industry developed / accepted standards. While these standards are still developing, current protocols that have been widely adopted include the IEEE 2030.5 Smart Energy Profile, the Green Button, OpenADR, and Walled Gardens.

Transitioning, Dave from WeatherBug Home took the reins to explain how his company’s internet connected smart thermostats are using real-time weather data to improve home energy management. Earth Networks, the parent company of WeatherBug Home, is one of the largest collectors of weather data across the globe and for years has provided real-time weather monitoring to private companies, the federal government, schools, airports, and even major league sporting events. Understanding that 50% of home energy usage is driven by weather, WeatherBug Home is helping individuals integrate this weather data into their home energy management plan.

WeatherBug offers consumers essentially two services for free. The first service allows a homeowner to connect their smart thermostat (Honeywell, Ecobee, Nest, Emerson, etc.) to the WeatherBug Home network, giving WeatherBug Home the ability to adjust their usage based on real-time changes in the weather. For example, if you want your home to stay at 77 degrees throughout the day, your connected smart thermostat will become aware of clouds, rain, winds, and sunshine that have an impact on how hard your HVAC system must work to maintain your specified ambient temperature. The second service is a Home Energy Scorecard / mobile app that allows consumers to see their energy usage in real time, and make adjustments to decrease their bill and carbon footprint.

WeatherBug Home’s IoT service benefits the grid as it has been shown to reduce household HVAC energy usage by as much as 8%. When comparing a WeatherBug Home connected smart thermostat to the operations of a normal smart thermostat, Dave explained that integrating weather data lead to an 11.4% increase in efficiency. Furthermore, this benefits the grid by reducing peak usage throughout the summer. Additionally, WeatherBug Home is able to sell this reduction in energy usage back to the local grid–in the form of demand response–reducing the amount of costly, environmentally unfriendly energy that must be produced during hours of peak demand. WeatherBug Home is already selling demand response capacity in Texas through successful partnerships with National Grid and CenterPoint Energy.

As the last presenter, Michel from NB Power took control of the webinar to talk about the expected growth of the IoT industry, and how connected consumers are catalyzing this growth. Michel set the stage by explaining that there are roughly 25 billion connected devices currently in use. While this is a huge number–more than three times the population of the earth–the number is expected grow to 50 billion by 2020. All of these new devices will create billons of new customized data points, giving energy providers the opportunity to truly customize a consumer’s digital experience. Digitally engaged consumers offer more business value to energy providers, and energy providers have much to gain by converting and retaining digital consumers explained Michel.

Research indicates that all of these new data points are increasing energy providers’ abilities to utilize a consumer segmentation. The consumer segmentation allows for more personalized marketing based on attributes that specific subsets of the population hold as valuable. Moving on, special attention was called to the data from SGCC’s recently released The Empowered Consumer Report, which found that consumers are especially interested in adopting IoT device and enabled services such as smart appliances, usage alerts, and time varying rate plans. While Michel analyzed a variety of connected technologies, he explained that energy providers will be best served using the previously discussed consumer segmentation to engage consumers with these new products. Knowing that there is a subset of the population eager to become first adopters will help reduce barriers to adoption and develop real-world case studies and examples. Consumers’ likelihood of purchasing a smart home device increases by 90% when they know someone who has one.

Taking a look at the more immediate future, a new report released by iControl found that 50% of consumers plan to buy at least one smart home (IoT) product within the next year. Michel explained that these consumers are the most likely to buy a smart thermostat, a remote control management system, or a home audio / video security device. Lastly, looking at what is motivating people to purchase these IoT devices, Michel explained that individual security, energy efficiency, entertainment, and “keeping up with the Jones,” are the top motivating factors.

Following the presentations, all of the presenters and attendees engaged in a Question and Answer session, which can be viewed by watching the recording of this webinar. To learn more about the Smart Grid Consumer Collaborative, register for our “DataGuard – Energy Data Privacy and Security” webinar on July 20th, or to learn more about our recent research, please visit www.SmartGridCC.org.

Wednesday, June 1, 2016

Engaging Today's Empowered Consumer

This past week, Gomathi Sadhasivan, Senior Consultant at DNV GL, Bridget Meckley from SGCC, and Dr. Paul Schwarz, Managing Director at Research Into Action, came together to present the highlights of our recently released The Empowered Consumer report on an SGCC Research Briefing Webinar. Released on May 10th, TEC provides a first-of-its-kind look at the new generation of smart energy consumers in the United States while exploring their awareness for an interest in next-generation products and services.

Kicking off the webinar, our Research Coordinator Bridget Meckley provided an explanation as to why SGCC set out to conduct TEC research. Bridget explained that we were interested examining specific question about grid modernization such as “what cool things has the Smart Grid enabled?” “have Smart Grid-enabled programs empowered consumers?” and “what options or technologies would encourage more engagement?” Bridget explained that we surveyed 1,500 consumers across 16 states including “advanced states” with an advanced metering infrastructure (AMI) and “control states” without AMI in order to determine whether or not geographic location or local smart grid initiatives impacted consumer awareness or interest. Moving on, Bridget also explained that the TEC analysis was conducted through the lens of SGCC’s Smart Grid Consumer Segmentation that was refreshed in 2015. Through this lens, SGCC evaluated survey respondents and grouped them into 5 distinct consumer segments that bring together individuals based on similar social characteristics. As was further explained throughout the webinar, SGCC determine that consumer awareness, interest, and preferences were more closely aligned with their consumers segment rather than their geographic location.

Finally, Bridget provided a brief overview of the 9 smart grid enabled products and services that were evaluated through TEC analysis: energy tracking alerts, time-varying rate plans, onsite power storage, smart appliances, prepaid billing, rooftop solar & net metering, peak time savings plan, device remote control, and the smart home.

Our second speaker–SGCC’s Research Committee Chair & Senior Consultant at DNV GL–Gomathi Sadhasivan provided webinar attendees with an overview of consumers’ interest vs. awareness for the 9 tested smart grid products and services. Gomathi explained that consumers expressed the highest interest in adopting smart appliances and a peak time savings rate plan while the highest levels of awareness were expressed for rooftop solar and the ability for smart energy products to be controlled remotely. Gomathi drew special attention to emerging technologies such as prepaid billing, noting that it has a relatively high level of awareness and interest despite the fact that it is only available in select markets.

Gomathi also presented attendees with an analysis of consumer awareness and interest levels in these technologies and services based on both their consumer segment and their geographic location. Gomathi reiterated that TEC analysis revealed that consumer interest / awareness are better aligned with their consumer segment rather than with their location. As an example, Gomathi explained that 60% of consumers in “advanced states” and 54% of consumers in “control states” are generally aware of new technologies and services, but when digging deeper, in reality only 35% of consumers who are identified as “Status Quo” exhibit similar levels of awareness. These findings shed light on the fact that marketing and promotional materials may be better served in appealing to specific segments of a population rather than all consumers.

Looking at the same data from a different angle, Gomathi provided an overview of the room for growth in adoption as it relates to these 9 products and services. Gomathi explained that adoption rates vary by concept and consumer segment, but almost universally, “Savings Seekers” and “Green Champions” are those most likely to adopt new products and services while consumers segmented as  “Status Quo,” “Technology Cautious” and “Movers & Shakers” are the least likely to adopt. While we didn’t expect Movers & Shakers to respond to these new technologies in such low numbers, we think the reason may be because they have yet to see the benefits of these innovative products and services.

Gomathi also provided an overview of what consumers expressed as the most important benefits of adopting smart grid enabled products and services. 72% of consumers said they are interested in adopting new products and services for the savings they provide, while 62% responded that they are attracted by the increased control over their usage. While other consumers expressed their interest in environmental benefits, the high level of responses around concrete concepts and actions indicate that consumers are looking for quantifiable and tangible benefits from these technologies.

The Empowered Consumer also tested consumer concerns for barriers around adopting new technologies and services. Gomathi explained that 87% of consumers said that they are hesitant to adopt next-generation products and services due to the initial purchasing cost, 78% said that they think their utility may take control over their home against their wishes, 69% said that they are concerned that they won’t save money, and 63% said that they are concerned they may have to change the way in which they use their home. Gomathi suggested one answer to these expressed concerns would be to “generate more testimonials and case study that use real-world hyper-local examples of savings and control.”

Gomathi finished by providing attendees with an overview of the expressed interest in emerging technologies such as smart appliances, onsite power storage, and smart homes. These three technologies represent new offerings to the smart energy market, and are already experiencing high levels of consumer awareness and interest. Gomathi explained that due to consumer interest, stakeholders may be able to engage consumers with educational awareness campaigns and first-adopter incentives. These technologies may further serve as opportunities to engage consumers in smart energy plans and increase consumer knowledge about grid modernization and the principals of efficiency and conservation.

Our last speaker, Dr. Paul Schwartz, Managing Director with Research Into Action explained how choice-based conjoint analyses were conducted through TEC research. The first conjoint analysis presented consumers with many possible combinations of a smart thermostat program and offered them a variety of choices to ultimately find the ideal smart thermostat program from a consumer perspective. The second conjoint analysis allowed survey respondents to customize their ideal time-varying rate plan, providing us with insight into the elements that consumers value the most.

Paul explained that consumers were presented with five common elements that represent a smart thermostat program: Installation method, Demand Response Enablement, Thermostat Capabilities, Incentive Amount, and Incentive Payment Method. The best configuration that consumers preferred was a smart thermostat program with a DIY installation method, auto-adjusting features, no demand response enablement, and a $250 incentive, which appealed to 68% of consumers. Paul explained that when reducing the incentive amount by 50% to $125, the configuration still appealed to the same number, 68% of consumers. When further reducing the incentive to $50, only a marginal decline in appeal resulted – fully 64% of respondents still thought this would be an ideal configuration. The takeaway is that incentive amount is not an important factor in consumer interest, so long as an incentive is offered.

Paul also explained that when they used a higher configuration ($125 incentive) amount but enabled demand response, more than half of respondents still believed that this would be an attractive program configuration. Paul explained that when designing a smart thermostat program, consumers showed the greatest sensitivity to the installation method, not the incentive amount, which was a surprising result of the TEC analysis. Further, Paul explained that programs such as these represent a low-cost, gateway opportunity to engage consumers in other smart energy programs.

Bringing our attention to the second conjoint analysis, Paul explained the four elements that comprised the time-varying rate plan analysis: Contract Duration, kWh Usage Access, kWh Pricing, and Bill Limits. Survey respondents were initially presented with the option to choose one of three randomly selected time-varying rate plans or a standard rate plan. With certain elements including a short contract and a bill limits,  55% of consumers chose a time-varying rate plan, with the majority (24%) choosing a night-time rate discount plan. In an effort to determine if consumers were simply unhappy with the standard rate plan or were actually interested in a time-varying rate plan, survey respondents were given the opportunity to choose from all three time-varying rate plans as well as the standard rate. When given all of the available options, including elements of a short contract and bill limits, 60% of consumers chose a time-varying rate plan (with the majority still choosing the night-time rate discount).

Although we are not sure of the causal reasons, Paul explained that consumers liked the night-time rate discount plan as it was simple to understand and provided a clear path to savings, reducing the burden on the consumers to adjust their behavior.

Webinar attendees were provided with a final wrap-up of TEC findings:
• Consumer segments are more important for understanding consumer interests and awareness than specific geographic regions.
• Consumers want to be assured their investments will return value by expressing interest in ways to save money and concerns about up front investments. Stakeholders may want to show authentic, real-world examples and testimonials of the benefits of these services and technologies to drive enrollment and interest.
• More consumers are interested in time varying rate plans than flat rate plans when certain program elements are in place. Consumer interest rises if given a choice of multiple time-varying rate plans.
• Emerging technologies, particularly smart appliances, offer opportunities to engage a wide spectrum of consumers.

A full Question & Answer session was conducted, which can be observed by watching the webinar’s recording using the pass-code “SGCC2016.” To learn more about The Empowered Consumer, I invite you to visit www.SmartGridcc.org/Empowerd-Consumer and download the report’s free Executive Summary.

Tuesday, April 26, 2016

Customer Engagement Success Stories

This past week, Pablo Bauleo, Ph.D from Fort Collins Utilities, Lupe Jimenez from the Sacramento Municipal Utilities District (SMUD) and Sonia Kreimer from Pepco Holdings (Pepco) joined SGCC for our 2016 Customer Engagement Success Stories webinar. This webinar was intended to bring to life SGCC’s ongoing Customer Engagement Success Stories Project which documents the innovative customer engagement strategies and tactics implemented by our Members.

Kicking off the webinar, Pablo walked us through the intricacies of the Fort Collins Utilities Peak Partners Program which combines smart thermostats and water heater controls into a single demand response program. Pablo provided attendees with an overview of the City of Fort Collins, and explained that roughly 18% of the city’s 150,000 residents are students, a factor that was taken into account during the program’s development. Further defining the Peak Partners Program, Pablo explained that the program’s intent is to reduce demand on the grid while providing financial savings for residents. In order to achieve the results, Pablo explained that Fort Collins Utilities set out to design their demand response program with ease of use for the customer as the central tenant. Fort Collins Utilities smart thermostat program was designed to use a customers’ existing Wi-Fi network for communication while the hot water heater controls were designed to use a cellular network.

Pablo further explained that these communications decisions were made at the benefit of the customer and to address the high rate of churn associated with college students and young professionals. By implementing the Wi-Fi configuration for the smart thermostats, any resident can easily attach the thermostat to their home network without the help of Fort Collins Utilities. It was also found that residents who are enrolling in the smart thermostats program are relocating less frequently–less than 20% churn every three years–making Wi-Fi a reliable source of communication. Inversely, the hot water heaters run off of a cellular network so that no matter who moves into a home or apartment, Fort Collins Utilities does not have to make a service call to adjust the communications settings. Fort Collins Utilities found that for hot water heaters, the rate of churn is as high as 80% every three years, partially influenced by the college students and young professionals living in and moving among apartment complexes.

As both of these programs have been active over the past two years, Pablo explained that Fort Collins Utilities has already seen 175,000 smart thermostat sessions (people interacting with the thermostat to adjust their efficiency and usage) helping decrease demand on the grid while reducing electric bills up to 10% for participating customers. Transitioning to lessons learned, Pablo explained that it’s important not to automatically calculate resource availability based the total number of installed devices, as residents may choose to override the device, or there may be technical difficulties that limit participation. Pablo further explained the importance of only selecting a subset of each community to participate in any given demand response event to ensure that there are additional untapped resources should there be a technical malfunction or the need for additional capacity. Additionally, Pablo explained that matching the communications framework (cellular vs. Wi-Fi) based on customer attributes (such as segmentation) has become a great way to decrease maintenance calls.

Continuing along, Sonia took the reins to explain the customer engagement strategies surrounding Pepco’s Peak Energy Savings Credit and Energy Wise Rewards program, together known as the “Two Ways to Save.” Sonia explained that the Peak Energy Savings Credit program offers customer a $1.25 per kilowatt hour (kWh) bill credit for every kWh they reduce their electrical usage (against a predetermined baseline calculated on average usage) on Peak Energy Savings Days. All customers are automatically enrolled in the Peak Energy Savings Credit program as there is no penalty for not participating, and they receive a notification the day before an event is called (via the communications channel of their choosing). The Energy Wise Rewards program is a more standard demand response program that cycles air conditioners and heat pumps using a web-programmable thermostat or outdoor switch in exchange for bill credits. Together, these two options provide customers with both an active and a passive way to participate in reducing strain on the grid.

Sonia explained that educating Pepco customers has been the key to success for the Two Ways to Save program. As the Peak Energy Savings Day program requires specific action by consumers, it’s essential that they understand the appropriate energy saving actions they must take. In order to successfully communicate with their customers, Pepco performed thorough market research in order to better craft their messaging. Sonia explained that Pepco monitored favorability and awareness around specific terminology, assessed consumers understanding of benefits, tested creative messaging, and divided their customers into specific segments to help better target their messaging.

As Pepco crafted their messaging, research showed that customers are the most interested in participating in the Two Ways to Save programs in order to help the environment and save money on their bill. Building off of their research, Pepco issued brochures, bill inserts, magnets, print advertisements, postcards and digital advertising. Following this customer engagement campaign, Sonia explained that more than 77% of customers were aware of the Peak Energy Savings Credit program and more than 70% of customers received  a bill credit during the programs initial trial phase.

Providing lessons learned, Sonia explained that customers are interested in receiving information that outlines new ways to save, and that to be successful Pepco needed to utilize a variety of different communications tactics. Further, Sonia explained that multiple approaches are needed as a service territory contains many different segments of consumers, and that the most compelling educational materials were testimonials that included specific savings and energy conservation tactics. Pepco is continuing to refine their customer engagement strategies based on usage data and customer feedback to increase participation and improve program performance.

As our third speaker, Lupe from SMUD, took over the webinar to explain SMUD’s SmartPricing Pilot Program; which was funded as part of the U.S. Department of Energy’s Consumer Behavior Studies research. Lupe explained that the SmartPricing Pilot was a two-year application of experimental rate options on a sample of SMUD’s customers, intended to classify the impact of time varying rates on usage, customer  satisfaction, enabling technologies, and the associated marketing and customer education strategies. Lupe explained that SMUD made available three rate plans, Critical Peak Pricing, Time of Use with Critical Peak Pricing, and a standard Time of Use plan. A sample of consumers were automatically enrolled (defaulted) onto one of these three pricing structures while there was also the option for customers to opt-into the Pilot Program. Customers who were automatically defaulted onto a time varying rate were given a complimentary in home display (IDH) to track their energy usage.

Wanting to uphold their relatively high levels of customer satisfaction, SMUD set out to develop educational, support, and response tools to make the transition to a time varying rate as fluid as possible for their consumers. Lupe explained that prior to transitioning their rate, customers received a variety of tailored informational packets explaining how the program would work, how their billing would change, and what they could do to save money. Specific customer engagement tactics included: recruitment and outreach letters, educational micro-sites, a dedicated call center staffed with program experts, in home displays with dedicated support, electronic communications explaining savings (call, e-mail, text message), social media engagement, discount and recipe cards, as well as the option for customized billing.

Lupe explained that combined with all of these enabling technologies and support services, SMUD saw load reductions of up to 11.9% for Time of Use Pricing and 25% for Critical Peak Pricing. Additionally, a high majority of customers who were defaulted to a time varying rate chose to stay on their rate following the conclusion of the pilot program. Further analysis revealed that by a margin of 2:1, customers preferred a Time of Use rate plan as opposed to a Critical Peak Pricing, while roughly 6 out of 10 customers prefer some version of a time varying rate as opposed to a standard rate. Additionally, Lupe explained that customer satisfaction actually increased for customers who were enrolled in the SmartPricing Pilot Program, which had been an initial worry when designing the program.

Equipped with this research, SMUD has made available an optional Time of Use rate plan for a subset of customers and plans to migrate all of their customer to a Time of Use rate plan by 2018. Serving a dual purpose, Lupe explained that this transition will help reduce demand on the grid while helping customers save money on their monthly bills, a strategic “win” for everybody involved.

If you are interested in learning more about these programs, or would like to hear the Question & Answer session that followed the webinar, I encourage you to watch the recording. Additionally, you can download any of the Customer Engagement Success Stories that were mentioned on this webinar by visiting smartgridcc.org.  To make sure that you’re up to date on all Smart Grid Consumer Collaborative activities, including the forthcoming launch of our Empowered Consumer Report, make sure that you’re signed up for our mailing list.


Friday, March 25, 2016

A Look at Changing Utility Pricing Structures

This past week Dave Elve from PayGo and Scott Whitmire from Southern Company joined us for an SGCC Peer Connect Webinar: A look at Changing Utility Pricing Structures. Dave and Scott guided us through a conversation on the many ways to keep consumers engaged through pricing programs while sharing their experiences and lessons learned. Together, Dave and Scott explained how they have been successful in reducing strain on the grid while simultaneously enhancing customer engagement.

Scott kicked off the webinar by providing an overview of Georgia Power’s (a subsidiary of the Southern Company) newest Smart Usage Rate (SUR) Program that was introduced in May of 2015. Scott explained that the SUR Program is a hybrid program that combines a demand response rate with a time of use component for residential customers. Essentially, customers are incentived to keep their electricity bills low by shifting how and when they use major appliances during hours of peak demand (June-September, 2:00 PM – 7:00 PM). To incentive customers to participate in the SUR Program, Scott explained that Georgia Power provides customers with a free Nest Learning Thermostat, a tactic already proving itself successful at increasing customer satisfaction and reducing demand on the grid.

Transitioning to more traditional rate plans, Scott explained how Georgia Power has re-vamped their payment processing system, and now offers pre-payment options in order to increase customer satisfaction.

In an effort to better understand their customers, in 2013 Georgia Power completed a customer engagement segmentation study that divided their customers into six distinct segments; Mass Market Homeowners, Everyday Georgia, Day to Day, Just Getting Started, Young and Mobile, and Established Households. This study also looked at Georgia Power’s Customer Value Chain which revealed five “pain points” for consumers. Building off of this segmented analysis, Scott and his team began a Payment Strategy Initiative which set out to address two of the largest concerns. 1) Customers want more flexibility and ease with payment options 2) customers want to use their preferred method of payment.

Taking a tiered approach, Scott explained that he and his team sought out to adjust their service offerings. In terms of flexibility, Georgia Power added additional locations where customers could go to pay their bills with cash, in addition to the 130 Georgia Power offices throughout the state. By allowing new vendors in grocery and convenience stores to take cash payments–and immediately post the payment to the customer’s account–there were now hundreds of more locations, most of which have extended hours beyond those of the Georgia Power offices, and are turning out to be a huge benefit for customers. Additionally, Georgia Power added the ability to accept credit and debit cards to each of their local offices, a service that was previously only offered over the phone.

Lastly, Scott explained that Georgia Power set out to establish a pre-payment program that built off of these new capabilities, as well as their AMI deployment which was completed in 2012. By taking advantage of the new local payment stations and credit card processing, Georgia Power’s pre-payment program was designed with the customer at heart.  Using their segmentation framework to better understand the subset of their community who would be interested in the pre-payment program, Georgia Power requires no deposits or re-connect fees, gives the customer total control, and helps them pay down existing debt. When a customer with a past due balance decides to shift to the pre-payment plan, 25 cents of every dollar contributed to the pre-payment program is used to pay down their existing debt. To date, 56% of customers who enrolled in the program have been able to eliminate their previous balance, benefiting themselves and Georgia Power. As of March 2016, Georgia Power had collected $1.5 million from the pre-payment program with only 8% of the eligible population enrolled. All-in-all, Scott explained that there have been many lessons learned–primarily focusing on customer education– but the program has been a true benefit for everybody involved.

Transitioning the conversation, Dave from PayGo took over and explained that the benefits achieved through next-generation pricing programs such as pre-payment are only possible thanks to the smart grid, smart meters, and the national focus on electrical grid modernization. Dave explained that the smart grid has transitioned the meter-to-cash process from a period of weeks to only a number of hours, reinventing the utility / customer relationship. A customer can make a payment online or through their mobile device, and that payment posts immediately to their account, adding or restoring power to their home.

Dave explained that PayGo’s pre-payment system–available as a service to energy providers–helps open the dialogue between the customer and their utility. Highlighting just one example, Dave explained how the PayGo system presents information to customers in terms that they can understand. Through an interactive portal or customized notifications, the customers is alerted as to how many days worth electricity they have left on their account based on past usage and variable factors such as weather. As customers don’t know what a Kilowatt-hour is, PayGo presents all information in relatable metrics, days and dollars.

Moving on, Dave provided webinar attendees with an informative profile of the typical utility customer. Dave explained that roughly 33% of customers are already on a pre-payment plan for their cell phone, and that 20% of customers are underbanked and move annually. These customers are incentivized by things such as no late or reconnect fees, and that they do not have to make an initial deposit, similar as to how their wireless plans works. Providing two examples, Dave explained that pre-payment is great for the college student who may move every year and can’t annually fork over a costly deposit, or a typical customer who may be going through a financial hardship and can’t afford to pay their entire electrical bill at once. In both options, a pre-payment program allows the customer to keep their lights on without undue financial burden.

Additionally, Dave explained how pre-payment programs also yield benefits to the energy providers. On average, energy providers who implement pre-payment programs tend to see higher than average customer satisfaction scores and operational savings in terms of write-off reductions and reduced call center demand. There is also a net-benefit in terms efficiency as customers on pre-payment plans tend to use between 7.5% and 12.7% less energy than customers on a traditional pricing plan.

Looking further down the road, Dave provided the audience with a current snapshot of the entire pre-pay market. Less than .5% of customers in the United States are currently on a pre-paid program while 10 Investor Owned Utilities are either contracted or in some stage of the pre-payment program life-cycle. Dave explained that while these numbers are low, studies have shown that as pre-payment programs become more prevalent, 15%-20% of customers are expected to enroll as millennials, environmentally focused, and financially challenged individuals makeup the key demographic.

As the webinar came to a close, both Dave and Scott presented “lessons learned” from their experiences with pre-payment programs, calling special attention to the importance of well-trained call center staff. Both presenters explained that the majority of pre-payment customers are enrolled when they call into their energy provider to talk about their bill. Scott explained that customer service representatives must be specially trained to be able to talk about the programs fluently and to answer any questions that may arise. Scott simply stated “how can the customer get it (the concept of pre-pay) if the person selling it doesn’t get it?” Backing Scott up, Dave explained that pre-payed enrollment increases almost 3 fold when call center staff are properly trained and are working from a script.

Together, Dave and Scott provided an excellent overview of the way utility pricing programs are beginning to change. If you were unable to attend the live webinar and would like to learn more about these programs, I encourage you to watch the webinar recording and listen to the Q&A with the attendees. Additionally, I would like to let all SGCC Members know to Save the Date for our Annual Members Meeting being hosted September 21-22 by ComEd in Chicago, IL. Learn more about the Smart Grid Consumer Collaborative and upcoming webinars, please visit www.smartgridcc.org.

Monday, February 29, 2016

2016 State of the Consumer Report Webinar Highlights

This past week Nathan Shannon, SGCC’s Deputy Director, and Joe Paladino, Senior Advisor at the U.S. Department of Energy, came together to present the findings of the 2016 State of the Consumer report on an SGCC Research Brief webinar. Together, Shannon and Paladino articulated the Six Key Themes that define today’s smart energy consumer.

Shannon explained that this sixth edition of the State of the Consumer report builds off of the findings of more than 5,000 consumer surveys as well as the U.S. Department of Energy’s Smart Grid Consumer Behavior Studies in an effort to better inform stakeholders as to how consumers are engaging with grid modernization efforts. While Shannon and Paladino took a deep dive into all Six of the Key Theme, I will highlight three of them below.

Kicking off the discussion, Shannon extrapolated upon Theme One of the report, Consumers Are Seeing the Benefits of Smart Grid. Prefacing the conversation, Shannon explained that while the relative awareness of the terms “smart meter’ and “smart grid” still remains low, consumers are actually seeing the benefits of the modern grid. Through SGCC’s Consumer Value Proposition–which found that consumers see cost savings, environmental benefits, and reliability improvements as the three strongest benefits of an advanced grid–Shannon explained that more than 90% of consumers are actualizing these benefits without fully comprehending the totality of the smart grid. Additionally, Shannon explained that based on SGCC’s Wave 5 Consumer Pulse research, consumers’ perception of utility performance has improved in recent years across almost every category. Summing up Theme One, Shannon blatantly stated that “regardless of their awareness for the “smart grid,” stakeholders are communicating to us that they are seeing the benefits of the modern grid.”

Transitioning to Theme Three, Paladino explained that Utilities Need to Show How They Are Acting in Consumers’ Best Interests to Increase Trust. Narrowing in on a single case study to help explain the theme, Paladino highlighted Sacramento Municipal Utility District’s (SMUD) Energy Department funded Consumer Behavior Study. Explaining how simple things such as singular word choice can work to sway a consumer’s mind, Paladino explained that SMUD diligently worked to tweak their advertisements. Words such as “choice” and “savings” resonated better with consumers than “critical” or “emergency,” which lead to overarching changes in the way that SMUD spoke about their programs, increasing customer participation and satisfaction. Paladino also explained that typical utility jargon resonates well with engineers and scientists, but falls on deaf ears for consumers, making the case for precise and consumer centric wording in all communications materials.

Jumping ahead to Theme Five, Paladino & Shannon took the stage together to explain that Consumer and Industry Experience Indicate a Path Forward for Smart Grid-Enabled Pricing Programs. Paladino explained that time varying rates represent an opportunity for energy providers to better correlate the demand for electricity with the price of electricity, but only recently–since the implementation of smart meters–have we had the opportunity to address consumer concerns as they relate to these rates. From there, Shannon explained that SGCC research has shown that consumers are willing to participate in time varying rate plans, primarily when the rate plan limits their financial risk. Shannon further illustrated this point by explaining that average peak demand reductions for customers on a Critical Peak Pricing plan are almost twice as high as those for customers on a Critical Peak Rebate plan.

After explaining all Six of the Key Themes, Shannon, Paladino, and SGCC’s Research Coordinator, Bridget Meckley, came together to take questions from the audience. Here are the best few:

Q: Was there a lot of “push back” from customers in the opt-out studies that you talked about being successful for the Energy Department Consumer Behavior Studies? 

A: Paladino: No, what we really saw was that energy provider who utilized all of their resources to explain the benefits of TOU pricing to their customers were extremely successful. What it came down to was the quantity of resources (finances) a utility used to communicate with their customers throughout the rollout. 

Q: Why do you think the adoption of smart energy technologies is low among SGCC’s Green Champions Consumer Segment? (Related to Theme 1)

A: Meckley: Many green champions choose to reduce energy usage through their specific actions such as turning off their lights, regulating their HVAC, etc.  As many of these consumers already have an understanding of the principles of conservation, they may be less reliant upon new technologies to improve their energy efficiency. This puts an emphasis on the need to communicate better with those cognizant of their energy usage and explain that their energy providers (and the new technologies they are offering) are actually there to help them meet their core values. 

Q: How does messaging strategy differ for opt-out vs. opt-in programs? 

A: Paladino: It takes a lot of effort to get somebody to volunteer (opt-in) for a new program, while an opt-out program utilizes fewer of an energy provider’s marketing, advertising, and outreach resources, translating to a financial savings. Blatantly put, it’s more cost effective to run an opt-out marketing campaign than an opt-in. 

As this was just a snapshot of the webinar, to learn more about the Six Key Themes identified in the 2016 State of the Consumer report, I encourage you to download the executive summary (or the full report for SGCC members), and watch the recording of the webinar to hear the full discussion at length.

Friday, January 29, 2016

After the Smart Grid, What’s Next?

For years now, energy providers throughout the country have been working diligently to modernize the backbone of American infrastructure; the grid. When you take a step back and look at smart energy advancements we’ve already made, they’re pretty astonishing. If 15 years ago you had told consumers that their utility company would be able to remotely adjust their water heater or air conditioner to reduce demand on the grid, or allow them to view their real time energy usage from something called a “smart phone,” bewilderment is not the only look you probably would have received.

Today, more than 51 million electromechanical meters have been replaced with new smart meters, our appliances connect to our Wi-Fi networks, and solar charging batteries large enough to power our homes are starting to become a reality.

We’ve come this far, but where are we going next? SGCC set out to answer this question on our most recent webinar, After the Smart Grid, What’s Next? Leveraging expertise from across the smart grid industry, Rob Stewart, Manager of Advanced Technology & New Business at Pepco Holdings, and Eva Buren, Managing Director at Accenture Energy Consumer Services, presented us with a vision of what might be next for the smart grid.

Explaining how Pepco’s grid infrastructure has matured, Rob outlined Pepco’s “5 Evolutionary Steps to Achieving the Smart Grid.” Having completed Steps 1-3, which primarily focused on the installation of intelligent devices and a communications infrastructure, Rob explained that steps 4-5 will now focus on the development of data analysis capabilities and decision making based on near real-time information. As Pepco enters step 4, Rob explained that they are “working to turn data into knowledge, and then turn that knowledge into insight” that can be used to inform decisions, and stay one step ahead. Reaching step 5 Rob said “would be nirvana, total optimization.”

While Pepco is already helping consumer save money on their electric bills through a targeted demand response program that includes dynamic pricing options and more than 350,000 automated switches on thermostats and air conditioning units, Pepco is now preparing for the next generation of consumers. Rob explained that Pepco already has more than 20,000 net energy metered customers, representing 320 MW of residential solar, and expects that number to continue to increase each month as prices for distributed generation continue to fall. Additionally, Rob explained that a more intelligent grid is allowing for better interactions with customers. Pepco is currently testing new In Home Displays that allow customers to monitor energy usage in real time, dynamic pricing, and to receive more accurate notifications in the event of an outage.

Additionally, with electric vehicle (EV) sales increasing year after year, Pepco is developing a demand response program to reduce impacts on peak demand by introducing both passive and active controls for EV charging. Currently designed as a pilot program for residents in Maryland, Rob explained that customers are presented with various rate plans and charging options that fit with their lifestyle. When a house is equipped with a second smart meter and smart charger, Rob explained that Pepco can reduce demand by controlling the level of charge being delivered to the EV. Or, if a customer selects to be on a time of use plan, they know that charging their vehicles during hours of peak demand will have an impact on their bill, and ultimately end up changing their behaviors. Early results have shown that customers are taking advantage of these smart grid enabled rate plans and charging options, benefiting both the grid, and their electric bills.

As part of a cohort of technology companies, power providers, and national labs, Rob provided an overview of how Pepco is working to more efficiently integrate distributed sources of generation onto the grid through the use of Smart Inverters. These Smart Inverters communicate through Pepco’s Advanced Metering Infrastructure (AMI) network to a central database in an effort to determine when and where resources such as solar can be brought onto the grid. In a similar vein, Pepco is also using their AMI to help local municipalities take better control of their energy usage by offering controls for “smart streetlights” and other grid connected devices.

Knowing that customer adoption and participation are key drivers behind the continued success of the smart grid, Rob explained “that there is no longer a single “best solution,” but there are in fact but iterations of better solutions that will continually be developed.”

While Rob highlighted some of the current research and development that is taking place to get us to “Grid 3.0,” Eva Buren, Managing Director at Accenture Energy Consumer Services, provided us with a tantalizing account of what consumers expect out of the next iteration of the smart grid.

Knowing that the grid “is a critical enabler in the rapidly evolving realm of customer wants, needs, and expectations,” Eva explained that Accenture Energy Consumer Services has surveyed more than 60,000 consumers across 26 countries to figure out what they want from the evolving smart grid. With an emphasis on satisfaction, Eva explained that Accenture has identified three key themes that define tomorrow’s “New Energy Consumer.”

Unlocking Digital Value: Eva explained that “tremendous value is associated with digitally engaged consumers versus the ones that are interacting with their utilities in a more traditional way.” According to Accenture’s research, digitally engaged consumers are more satisfied with their energy provider, are more like to recommend their energy provider, are more likely to participate in energy management programs, sign up for automated home energy management devices, purchase home energy generation system, and exhibit more trust in their energy provider.

Extending the Value Proposition: “Even if you “build it,” they will not necessarily come,” said Eva. Extrapolating on that statement, Eva explained that just because energy providers are building new digital tools doesn’t mean that consumers are automatically going to start using them, there needs to be a value to them to migrate from traditional channels. Through the smart grid energy providers are afforded an opportunity to expand on their traditional value to the consumer, and forge new relationships by expanding their offerings across home generation, battery storage, and connected home systems.

Seizing the Digital Energy Revolution: Consumers are seeking a single source for interconnected home services offerings that address more aspects of their daily lives. Eva explained that by 2020, Accenture expects 64% of consumers to be seeking bundles of new products and services with electricity, gas and/or water from their energy provider.

Advocating a staged approach, Eva explained that the consumer-centric smart grid of the future must be built upon value focused offerings that drive customer experiences, encouraging them take the next step and become digitally engaged with their energy provider.

If you we’re unable to attend this webinar and would like to learn more about what’s next for the smart grid, I encourage you to watch the recording and hear how Rob and Eva responded to some great questions from across the industry.

Knowing that nothing happens overnight, the Smart Grid Consumer Collaborative believes that an educated, informed, and empowered customer base will assist our nation’s energy providers in pushing the boundaries of the smart grid further than ever before. I would like to invite all of my industry colleagues to attend our Annual Consumer Symposium: The Connected Consumer & the Future of the Grid on February 8th, co-located with the DistribuTECH 2016 Conference in Orlando, FL.



Monday, January 4, 2016

2016: Smart Grid’s Year of the Consumer

In case you missed it, a lot of great things happened in 2015. Notably, world leaders came to a consensus on the fight against climate change, solar energy finally passed the 1% global threshold, a new Star Wars movie came out, and we saw both the Production Tax Credit and the Investment Tax Credit extended.

As the intelligence of our nation’s electrical infrastructure continues to grow, so too must our focus on the end user: the consumer. Currently, the United States is roughly half way through the deployment of the nation’s advanced metering infrastructure, and is expected be 70% deployed by 2020. As consumers transition from hearing about smart meter technology to having smart meter technologies, the industry as a whole will need to assist them in becoming dynamic users of newly available products and services. Exciting times indeed.

The good news? Consumers are listening. Recent Smart Grid Consumer Collaborative (SGCC) research has shown that not only are consumers interested in learning more about the money saving solutions offered by their utilities, they are the most interested when they can tie utility messaging to their specific lifestyle or interests. In 2015 SGCC conducted two landmark studies that served to further dissect the thoughts, actions, and motivations that cause consumers to behave the way they do. SGCC’s Wave 5 Consumer Pulse Market Segmentation Study grouped consumers into five separate segments based upon their relative thoughts and actions toward energy usage, the smart grid, smart meters and associated products. Further highlighting these segments, SGCC 2015 Consumer Voices study provided an in-depth qualitative understanding of these consumers segments through on-camera interviews with a variety of utility customers from across the country.

Building on our existing research, throughout 2016 SGCC will further explore the factors that define individual consumers as outline by our research priorities below.

Released annually at our Consumer Symposium held in February, SGCC’s 2016 State of The Consumer report–integrating key findings from the U.S. Department of Energy Consumer Behavior Studies–will discuss how to effectively engage consumers through smart grid-enabled programs and technologies. Building on these findings, SGCC Empowered Consumer research–which will be released in Q1–will evaluate consumer’s propensity to adopt and participate in a variety of smart grid-enabled programs. We’ll be providing a first-of-its-kind look at the cool new things the smart grid has enabled for consumers and will flush out any existing concerns they may have regarding these new technologies.

SGCC will be completing a Consumer Solar & Distributed Energy Resource Assessment in Q2 that will evaluate consumer’s willingness to participate in associated programs, and characterize what they see as the primary barriers to participation. We will explore how consumers see the value of distributed resources such as solar, microgrids and storage technologies while providing insight into what consumers expect out of varying program. Additionally, in an effort to help the utility industry stay one step ahead, in Q3 SGCC will also be conducting research that brings to light customer’s experiences and expectations, revealing what consumers think about their energy providers while providing insight into what products and services customers expect to see in the coming years.

Lastly, in Q4 we will perform an in-depth analysis to identify any consumer concerns that may be inhibiting the adoption of smart grid technologies. This analysis is intended to shed light on how consumers feel about privacy, cyber security, data ownership, and digital safety while examining which, if any, of these concerns are preventing consumers from taking action.

For more information about any of these projects, please review SGCC’s 2016 Research Agenda

With your help, we will continue to push the boundaries of consumer centric smart grid research further than ever before. I encourage you to attend our Annual Consumer Symposium on February 8th, conveniently co-located with DistribuTECH 2016 in Orlando. This year we will be bringing together an unusual number of utility speakers to discuss trends from across the industry. We will have a fun ‘Snake Pit’ style event to debate the top solar issues with the audience determining who has the winning argument, and we’ll be releasing our 2016 State of the Consumer Report, complimentary to attendees. This report guarantees that you are up to date on the latest trends in consumer engagement.

Best wishes for a successful 2016, and we hope to see you in Orlando!