Wednesday, September 10, 2014

Entergy engages low-income customers

By Patty Durand, Executive Director, SGCC

We’ve all experienced hearing a meme – an idea, true or otherwise, that travels by word of mouth – repeated again and again, despite evidence to the contrary.

There are memes in the power industry too. Here’s one: low-income power customers are difficult to engage, that they won’t be able to benefit from actively managing their power use, and therefore, won’t or can’t save money from smart grid technology investments.

Today I bring you evidence that this notion is false. We’ve already seen evidence for positive engagement with low-income customers through the
PowerCentsDC program completed in 2010 as well as via the SGCC’s own research: we issued our Spotlight on Low Income Customers II this past April to our members.

But let’s look at what’s new. Earlier this year, the International Smart Grid Action Network (ISGAN) and the Global Smart Grid Federation (GSGF) announced that they had awarded their first-ever Award of Excellence – focused on consumer engagement and empowerment – to Entergy New Orleans, Inc. (ENO) for their “SmartView” advanced metering infrastructure (AMI) pilot project. ENO earned this distinction out of more than 40 nominations from 15 countries.

What set ENO’s project apart?  Its engagement and empowerment project focused on low-income customers. I was one of 12 international jurors for the competition and we were both startled and pleased at the success of this pilot. While ENO’s project was a pilot, it involved 4,700 customers – a substantial sample size.

ENO obtained the assistance of 18 community groups and contracted with seven of them to perform outreach and enroll low-income customers in the program. The utility used its customer care representatives, TV, radio, print and Web-based media, neighborhood events, bill inserts and direct mail to reach others. One creative aspect of this pilot that I have not seen elsewhere is that enrollees had a choice of how they wished to receive training in the pilot program. They could choice between high-touch face-to-face training, medium-touch phone training, or low-touch training by mail. Online tutorials and a dedicated call center were available throughout the project too.

The pilot included rebates and incentives for enrollment, as well as for peak load reduction and control. In one program, customers were provided with an in-home display, programmable thermostats and a Web portal to provide near-real time energy use information and the means to control it. In another program, the utility incentivized participation in traditional, direct load control of air conditioning units. Peak-time rebates were a key incentive and our research shows a high interest in them from all segments of consumers.

78 to 90 percent of program participants believed the program saved them money on their energy bills and actual data put that number between 58 and 67 percent.  Moreover 90 percent of the program’s participants expressed interest in participating on a permanent basis. Those are big big numbers for any customer segment, let alone the low-income segment that, as the meme has it, is difficult to reach and motivate.

In fact, ENO’s work was not particularly innovative, which is its strength and the source of my interest. ENO demonstrated that simple, straightforward programs can engage and empower low-income customers, who in this case were motivated to manage their energy use and were highly satisfied with the experience. And, a substantial majority saved money.

ENO’s effort is easily replicated by utilities across the country and, indeed, the world. This project took place in the 2010-2013 timeframe and was supported by the Smart Grid Investment Grant program under the American Recovery and Reinvestment Act of 2009.

It’s refreshing to see ENO’s success at a time when so many AMI projects have been completed, yet lack customer engagement processes that yield long-promised, direct customer benefits – particularly for the low-income customer segment, regardless of whether it’s the general population or the low income segment.

All this is taking place in a context in which utilities are embracing remote account connect/disconnect and prepaid services as the main function of their AMI program outreach rather than consumer empowerment; and consumer advocates continue to suggest that time-of-use rates and demand response programs put low-income customers at risk. Once again, those fears have been proven to be unfounded.  

So let’s put to rest the story about the difficulty of engaging low-income customers and learn from ENO: it is possible to reach them, engage them, and empower them to save money.