Monday, April 15, 2013

United Kingdom all ears on consumer engagement

By Patty Durand, executive director, SGCC

I traveled to London last month with two SGCC members for meetings with stakeholders on the United Kingdom’s mandated rollout of smart meters in 2014-2019. The contrasts and similarities between the U.K. and the United States made for really interesting insights.

The U.K., like the U.S., has embarked on grid modernization, including educating and engaging consumers. Stakeholders in the U.K. would like to use best practices to meet the latter challenge. The stakeholders we met with – representing government, industry and consumers – expressed concern about the acceptance of smart meters and possible consumer backlash regarding privacy and health issues. Their anticipation of these issues and interest in addressing them prior to rollout was refreshing, considering the U.S.’s mixed record. I was pleased that the U.S. is out in front on smart grid consumer engagement and that another country was interested in what we had learned.

Contrasts were many. The U.K. government has mandated the installation of smart meters – without providing funding – for the efficiencies and consumer interaction with dynamic rates the technology enables. U.K. consumers navigate a competitive retail electricity market and choose their electricity provider.  These retail providers bear responsibility for consumer acceptance of the new meters.

Two big differences between the U.S. and U.K.: about 50% of residential electricity meters in the U.K. are installed inside the home, often in cramped, out of the way places, such as under stairwells. That will create a challenge as retail providers must make an appointment for the consumer to be home for the meter change-out.  

Also, U.K. consumers receive estimated monthly bills, which are “trued up” with actual readings only once every two years or sooner if the customer requests. With a digital meter, consumers will receive accurate electricity bills immediately upon installation of the digital meter

These differences seem large to me – in fact, at times seemed insurmountable. However, in terms of civic mindedness and attitudes towards government, British citizens may have a greater tolerance for and willingness to participate in government mandates than in the U.S. While they don’t have a choice – the meter rollout is a mandate, the fact is that mandates for a good reason are likely to be more acceptable.

The U.K. rollout, however, faces several challenges. The use of estimated bills and “invisible” meters appears to make consumer education almost more important here as the education gap is greater, though an end to estimated bills is considered as a smart meter benefit.  With estimated bills, however, the U.K. consumer rarely if ever encounters “bill shock” at month’s end as U.S. consumers sometimes do, and, currently, has little incentive to manage electricity use and assess the results. Indoor meters mean that one strong argument in the U.S. for meter safety – that the meters are mounted outside on a metal shield – is lacking in the U.K. It appeared that little consumer research has been done, though our meetings confirmed that such work is in planning.

One retailer,
E.on UK (8 million electricity and gas accounts), has begun offering smart meters on a voluntary basis as a competitive advantage, touting its service and choice in energy programs – but uptake has been slow. The cost of the new meters will be rolled into monthly electric bills over time.

Our delegation’s meetings with stakeholders in London established that there is strong interest in learning any applicable lessons and best practices we could offer. That was a heartening realization: despite the challenges we face and the uneven record of U.S. power stakeholders in educating and engaging consumers, we have conducted valuable research and can cite numerous, effective outreach programs.

My role included presenting our current
“Consumer Engagement Success Stories” report (detailed in past blogs and on the SGCC website) that documented four exemplary utility programs, the seven common steps they employed as best practices and our customer segmentation studies. Lisa Magnuson, senior director of marketing and brand programs at Silver Spring Networks, described the recent launch of by a coalition (including SSN and SGCC) to promote energy literacy. And Barbara Leary with Florida Power & Light, detailed how FPL has tackled the challenge with its Energy Smart Florida campaign.

I am proud and was pleased to offer the benefit of our work and experience here in the U.S. to our colleagues “across the pond.” But the sobering truth is that, while we’ve defined and, in some cases, met our own challenges, we have a ways to go, on both sides of the ocean. 

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