Wednesday, December 16, 2015

Bringing the Consumer Perspective of the Smart Grid to Life: Exploring SGCC’s 2015 Consumer Voices Study

In today’s world of hyper-connectivity our phones don’t stop buzzing, our watches beeping, and we as a society continue to break records for the amount data we generate every day. As our world becomes more digitized and our devices more interconnected, it is paramount to understand how each subset of consumers interacts with emerging technologies.  

Underpinned by a global focus on energy efficiency, the United States has already installed more than 50 million household smart meters and the prevalence of home energy management systems continues to rise. As the smart grid, along with associated products and services, continues to develop in communities, it is essential for parties on both sides of the meter know how to engage with one another.

In order to better understand how consumers think about their energy usage, SGCC visited communities throughout the country and conducted in-depth interviews with a variety of consumers throughout our 2015 Consumer Voices study. Building on the findings from our first Consumer Voices study conducted in 2012, these in-depth interviews serve to equip the facts and figures that inform decisions throughout the utility industry with a voice, affording companies an  opportunity better understand the customers they strive to serve.

Knowing that not all consumers are alike, SGCC sought to further define the five different smart grid Consumer Segments identified in the Consumer Pulse Wave 5 Survey released earlier this year. Through this segmentation, five consumer segments were identified: Green Champions, Movers & Shakers, Savings Seekers, Technology Cautious and Status Quo. These segments group together like-minded consumers based on socioeconomic characteristics and their thoughts and actions toward energy usage, the smart grid, smart meters and smart energy technologies.       
Interpreting the Results

Throughout the 2015 Consumer Voices study, consumers responded to open ended questions about their energy usage, conservation habits, feelings toward their electricity provider and their knowledge of smart meters and smart energy programs. Additionally, consumers were given the opportunity to speak freely about their thoughts and feelings surrounding energy usage as it relates to their specific lifestyle and daily routines. While each consumer’s responses were shaped and molded by their individual circumstances, common themes emerged across all consumer segments. 

SGCC found that though knowledge of the smart grid and smart meters remains stable and relatively low, consumer interest in programs, products and services that smart grid technology can offer is high.

“I think if I can have this smart grid and this smart energy, I kind of feel like I’m in the driver’s seat. I have control. I can understand.”

While SGCC interviewed a variety of consumers in different locations across the country, all consumers interviewed felt that they would better respond to messaging tailored to stress individual benefits they could receive from the smart grid.

“If they word it right and they make me feel like I can save money and be more efficient and it could really manage my home and have the power to change things, then that would be kind of motivating.”

Each of the participants in the various consumer segments found a different aspects of the smart grid appealing, but a common theme expressed by many of the interviewees was an interest in the smart grid helping them save money.

“A lot of people live paycheck to paycheck…If they can save money to use for other things because of energy savings, that would be a tremendous motivation.”

While there were many perceived benefits from smart grid technologies across all consumer segments, the single most anticipated benefit from the smart grid was increased reliability.

“That’s putting intelligence into the distribution network, for efficiency. Making better use of what we have right now and making it more energy efficient.”

Regardless of their consumer segment, all of the consumers that SGCC interviewed shared a belief that everybody should do their part to reduce energy use, but there needs to be an appropriate cost:benefit ratio to cause them to act.

“If it’s going be a burden, then you weigh your costs. No pun intended. But, if it’s something that can just be manageable, easy to plan, then no problem. But, if it’s going be more of a burden, more work, and its going take a lot more effort – maybe not as much.”

Additionally, SGCC found when given the opportunity, many consumers did not shy away from candidly explaining how their behavior is often influenced by socio-economic factors.

“Because I think that if I’m working 12 hour days that I deserve to feel comfortable in my house.”

“I conserve energy and use less. First, because it helps me in my pocketbook and second because it’s selfish not to, in my opinion.”

While common threads emerged, these in-depth interviews allowed SGCC to drill down deep and further pinpoint the characteristics that separate the five consumer segments. The unique thoughts, actions and rationales behind each segment have generated new data points which electricity and technology providers can use to fine tune their consumer engagement efforts. SGCC’s Consumer Voices research is part of an ongoing effort to better understand consumer awareness, favorability, expectations and preferences concerning the smart grid and smart grid-enabled programs and technologies. As the ways in which we access, use and think about energy continue to evolve, so too will the relationship between consumers and electricity providers. 

SGCC wold like to invite you to attend our 6th Annual Consumer Symposium: The Connected Consumer & the Future of the Grid. Co-located with DistribuTECH 2016, the event takes place on Monday, Feb. 8, 2016, from 9 a.m. - 5:30 p.m., at the Orange County Convention Center, in Orlando, Florida. Attendees at the Symposium will gain insightful information and tactics on creating new and innovative solutions to help engage consumers about the smart grid in 2016. Additionally, industry stakeholders will learn and takeaway the proactive approaches in communicating the value of smart grid investments to consumers, in order to fulfill consumer expectations.

Tuesday, October 27, 2015

How Scary The World Would Be Without Standards

This is a guest post by Smart Grid Consumer Collaborative's Standards Committee

It’s the last gas station for sixty miles, you go inside to inquire about the fuel type for your vehicle.  Is it available? The attendant says vehicles in this region use 80 unleaded or diesel; you need 93!  The only hotel around looks practically abandoned.  Nightfall is approaching fast…

A sudden crash in the middle of the night shakes you from your sleep.  You hear footsteps.  You reach for your phone and realize you fell asleep without plugging it in. You plug your cell phone into the outlet. But, before you can react fast enough, you realize you’ve plugged your cord into the wrong outlet and the voltage is too high, damaging the only contact you have to the outside world. Heavy footsteps are coming closer towards your room…

The lineman is ready to reconnect the distribution line to the pole. He asks his partner if anyone has an interconnected distribution system in the neighborhood.  “Negative”, his partner responds.  The lineman connects the line and is immediately zapped, falling lifeless to the ground.  His partner screams out as he runs to his side. A customer recently placed solar panels on his home and did not notify his utility. “Why?” he had said, when questioned by his wife. “It’s not like I’m required by law…”

A world without standards can be even more frightening than any haunted house or scary movie. Standards are what allow us to go to any gas station and expect to fill up our cars, give us the ability to plug in a device without thinking about what outlet we’re using, and also prevents countless injuries each and every day. Without them, we surely would not be where we are as a society today.

There are a variety of standards for just about everything you encounter in life: vehicle standards, labeling standards, food standards; all designed to make things easier as we navigate our daily tasks.  Utility standards also play a part in our communities. In our last blog, we discussed the importance of developing and maintaining standards on smart inverters, a device used to convert the electric current flowing in your home from DC to AC.

In addition to these AC/DC bylaws, there are many other electrical standards that people encounter every day unbeknownst to the average person. For example, 46 states have already adopted the National Electric Code, a regionally adoptable standard for the safe installation of electrical wiring and equipment while the ANSI C.12 standard, developed by the National Electrical Manufacturing Association, is widely implemented by many utility companies to ensure the accuracy of electrical meters and thus, the accuracy of your electric bill.

As our grid continues to evolve, how will standards impact the next generation of electric delivery and reliability? Everyday more smart devices and distributed sources of generation are connected to the grid. Soon, the electrical grid will emerge as a resemblance of the Internet, connecting consumers and devices to everything they need in their daily lives. While rarely discussed, standards are crucial to keeping this connectivity and technology up and running.

Several standards have been introduced and, in some cases, implemented since the expansion of the smart grid. As our country is investing more than $400 billion into modernizing the electrical grid, some states have already begun to develop the next generation of standards. The Smart Grid Interoperability Panel is spearheading these efforts by maintaining a catalog of these standards on their website. These standards govern activities such as the secure exchange of data from the meter to the utility, and the appropriate electric connector that should be used for establishing a safe connection between a plug-in electric vehicle and a charging station.

Leading efforts to listen to and understand residential consumer interest in energy and utilities, Smart Grid Consumer Collaborative also maintains a guidebook of Consumer Standards housed on our website. 

Standards ensure that you don’t have to think about whether the fuel pump will fit in the gas tank, or that the octane will work with your engine, or that the plug for your phone or electric vehicle will fit, or that you have to worry about the voltage of electricity coming out of the outlet, or that your laptop or mobile device will connect to a WiFi signal- eliminating these variables smooth the transition through technologies, and help eliminate customer risks and concerns.  Without these standards, we would have many different plugs, adapters, and wires that don’t work with each other: truly a nightmare scenario.

Friday, October 23, 2015

The Strategy of the Consumer

This is a guest post by Nathan Shannon, Deputy Director of SGCC.

CenterPoint Energy has long been known as a leader in the energy industry in regards to customer engagement and satisfaction. They know that customer expectations are constantly evolving and in the past few years a new wave of engaged consumers have emerged within the market. Giving these consumers what they want is the number one priority of the Customer Experience team at CenterPoint Energy.

Last month at the Smart Grid Consumer Collaborative 2015 Members Meeting & Interactive Workshop in Houston Gregg Knight, CenterPoint Energy’s Chief Customer Officer, gave an insightful glimpse into the strategy of the consumer according to CenterPoint. He spoke on how we have moved from the “electro-mechanical era” to the “digital era” and now to the “convergence era.” Today’s consumer has a desire to be valued by their energy provider. They want their time, their money and their preferences to be given weight and importance.

Knight talked about the primary attributes consumers want from their energy provider. First, they want proactive outage notifications via text, phone or web. Being aware of an outage and how long it will last is a key benefit of a modern grid. This empowers consumer by giving them the information in real time. Secondly, they want low-effort interactions. A simple pay-bill reminder or an email about a new program offered gives consumers the opportunity to interact with their utility with ease. Ease-of-use raises satisfaction and gives the consumer the option to be as engaged as they would like. Lastly, consumers desire a clear channel of communication. They want to know what the utility knows when the utility knows it. Transparency is the name of the game. Customers trust their utilities and they want to know that they are well informed at all times.

SGCC’s Motivations and Emotions of Engaged Consumers research key finding echoes Knight’s approach and goes one step further: highly-engaged consumers tend to cite more internal and/or future-oriented motivations for both their overall engagement and specific purchase/participation behavior. These motivations include providing for future generations and caring for the environment.

In contrast, low-engagement consumers tend to be more motivated by immediate present-oriented things like saving money, convenience, and control. So while messages about environmental savings and even financial savings are sure to be received positively, it is the practicality, affordability, and simplicity of these messages that will be critical to getting this group of consumers to try new and existing energy programs. This ties directly into Knight’s attributes that consumers want to low-effort interactions and ease of use when it comes to communicating with their utility.

CenterPoint Energy has developed a customer experience that is personalized and empowers each of their five and a half million customers.  Delivering a consistent and simple message through all forms of customer communication has helped them to achieve this goal. Many other providers in the energy world are using these same steps to show their customers just how innovative and engaging the smart grid can be. With the growth of a modern grid well underway the energy industry is poised to deliver the highest quality consumer satisfaction this industry has ever seen.

To learn more about SGCC’s consumer research and education join us at our 2016 Consumer Symposium: The Connected Consumer and the Future of the Grid.

Wednesday, October 21, 2015

A Conversation on Net Metering, Energy Storage and Stakeholders

As a smarter grid evolves through the introduction of new technologies, we’re seeing differences arise over potentially unintended consequences.

I’m referring here to the rapid rise in consumer adoption of rooftop solar panels, driven by a drop in cost and the promise of lower utility bills and reduced greenhouse gas emissions. This trend is accompanied by the increasing availability of energy storage technologies and strategies. One of the resulting issues is the emerging division among stakeholders.

Consumers who adopt rooftop solar power argue that they’re contributing major benefits to the grid and to society by reducing demand and overall use of centralized, greenhouse gas-producing power. These consumers argue that reducing peak load helps a utility’s load shaping efforts and allows a utility to defer capital investment in peak-power plants. This position holds that the benefits outweigh the cost to utilities of accommodating distributed generation.

In contrast, some utilities are arguing that managing distributed generation costs more than its claimed benefits. As a result, the utility and customers who don’t adopt rooftop solar because they cannot afford it are subsidizing solar power adopters. Consequently, some utilities are seeking to adopt monthly charges or other means to accommodate rooftop solar installations. An associated issue is how net metering – a policy that credits customers for electricity they return to the grid against the power they use – is structured and whether it exacerbates the purported inequities described above.  

Thus, SGCC’s recent webinar on the topic, “Energy Storage and Net Metering,” featured a distinguished panel representing diverse views on these issues.

Jon Wellinghoff, former chairman of the Federal Energy Regulatory Commission, currently a Partner in the Stoel Rives law firm, essentially argued that the system and societal benefits of rooftop solar adoption outweigh its costs to a utility. Barbara Lockwood, General Manager of Regulatory Policy Compliance at Arizona Public Service (APS), countered that when costs and benefits are fairly weighed, utilities need to recover the cost to serve customers who adopt rooftop solar. Dan Vogler, founder and CEO of UtiliCell Energy Storage Systems, provided a technologist’s view of how storage can perhaps render the foregoing arguments moot by providing flexibility to both the utility-centric grid and to consumers seeking alternatives.

Wellinghoff argued that all means by which utility customers reduce demand should be treated equally, whether that is the adoption of more energy efficient appliances or sending a child off to college. He acknowledged that, under many regulatory schemes, consumer reduction in energy use erodes utility revenue. Wellinghoff implied that this effect should be dealt with through a regulatory scheme that rewards utilities for energy efficiency as well as volumetric sales, but not by penalizing rooftop solar adopters through demand charges.

Wellinghoff cited a meta-data analysis of 11 studies on the issue by Environment America Research and Policy Center, which found a net benefit to utilities from rooftop solar adoption. The study determined a value of $0.17 per kilowatt hour (kWh), well above the national, average retail rate of $0.12/kWh.

“Ultimately, when we talk about net metering, we’re providing a proxy for the value of [rooftop solar] to the grid,” Wellinghoff said.

Wellinghoff suggested that charging customers for rooftop solar adoption is “arbitrary and discriminatory” and that a net metering backlash from utilities will drive consumers to adopt energy storage technologies and to move away from the grid – the “least desirable outcome,” he said, due to the societal value of a centralized grid.

Lockwood in turn argued that most of the “cost of service” born by utilities is infrastructure based, though utilities price electricity consumed by customers on a volumetric basis. She argued that demand charges – applied mostly to commercial and industrial customers at this point – can align cost drivers and rates. She said she agreed with Wellinghoff that “aligning cost drivers and rates will unlock technology innovation for everyone’s benefit.”

However, Lockwood argued, the “cost to serve” and “value” are not the same thing and discussions of rooftop solar adoption and net metering do not fairly assess the cost to a utility to accommodate rooftop solar. The study cited by Wellinghoff, Lockwood argued, is based on “value,” not “cost to serve.” Demand charges to accommodate customers who adopt rooftop solar will help utilities recover the necessary infrastructure costs driven by that adoption, she said.

Lockwood also said that APS provides many options for its customers to adopt solar power in a way that includes the “cost of service” and that the utility provides customers with time-of-use pricing that assists in load shaping and cutting peaks, achieving the benefits claimed by rooftop solar and net metering advocates.

Vogler, our third panelist, sees current and nascent technology as an opportunity to finesse the net metering debate, though he pointed out that such policies support the business model for distributed generation.

Vogler extrapolated, explaining how rooftop solar, energy storage, electric vehicles (EV) and the grid could interact to benefit both utility and customer. Digital technology today could provide the means for a three-meter scenario that decouples a customer’s kilowatt-hour consumption at home from the customer’s EV-charging demand, as well as any electricity injected from home to grid, from vehicle to home or vehicle to grid. Using an EV battery as a mobile storage technology provides further flexibility to both consumer and utility, he suggested. He called that “carbitrage.”

Vogler’s presentation reminded me that technology, economics and fairness for all stakeholders in the net metering and energy storage debate is a highly complex matter. The value of electricity consumed and/or produced – at least in a single, local utility service area – has been based on the time of day that each occurs, and the application of energy storage is upending that traditional fact. De-regulated markets such as Texas, which now allow EV owners visibility into the price of wholesale electricity for EV charging purposes, adds another element of complexity.

Clearly these associated issues are now coming to the fore and will be argued at length in traditional public utility commission (PUC) hearings, which require utilities to present their case for cost recovery and require PUCs to weigh that against the public interest.

Industry stakeholders also are debating the net metering issue in energy-related media via essays, blogs, webinars and conferences – not just at PUC hearings. I invite everyone to join us for the SGCC’s 6th Annual Consumer Symposium: The Connected Consumer & the Future of the Grid. The Symposium is one of the industry’s premier events in consumer engagement with smart grid. Co-located with DistribuTECH 2016, the Symposium will feature two panels on the net metering issue.

Thursday, October 1, 2015

Consumers and Standards: A Crucial Relationship

Having listened to three knowledgeable panelists on our recent webinar, “The Importance of Consumer Standards,” I would like to share a few thoughts on the topic and weave in key points from the panel.

Consumers and standards are a necessary pairing, but – like much in the smart grid domain – consumers should not have to know much about standards to enjoy their benefits. My primary takeaway from our panel is that consumers will need affordable, easy-to-use, secure and reliable devices and services to manage their energy use and achieve their expressed goal of supporting clean, affordable energy.

Technical standards, of course, form the foundation for attractive devices and services. And if energy stakeholders collaborate on technical standards, then consumers need not know much about the minutiae of how standards are developed and incorporated into products and services, as long as they create value for the consumer.

In that sense, consumers need only know that a) standards should be supported because they create economies of scale and, thus, affordability, b) standards create interoperability and, thus, compatibility among devices, and c) standards ensure safety and reliability.

In turn, standards “need” consumers to ensure that the technologies being developed really serve a need for end-users. Typically, product manufacturers represent consumers in this scenario. If this is accomplished in a way that creates consumer value, that will accelerate consumer engagement, to everyone’s benefit.

All of this requires heavy lifting in the standards arena. And “getting it right” is crucial to the success of smart grid and transactive energy markets. Readers will recall that two of the world’s most advanced technology companies rolled out home energy management software offerings about five years ago and those offerings soon vanished. Many stakeholders are rightfully concerned that false starts could dampen general consumer interest in a smarter energy future. We’ve all got a stake in getting it right. And standards are the foundation.

That’s a long introduction to our panelists and their points, but I wanted to connect a few dots in my own mind after hearing them speak. Our three panelists presented different angles on the role of standards in the smart grid domain.

Bill Ash, Strategic Technology Program Director at the IEEE Standards Association (IEEE-SA), defined standards and the open process in which they are developed.

“Standards are published documents that establish specifications and procedures designed to maximize the reliability of the materials, products, methods, and/or services people use every day,” he said. “Standards address a range of issues, including but not limited to various protocols to help maximize product functionality and compatibility, facilitate interoperability and support consumer safety and public health.”

Ash had an enlightening infographic – see slide 16 in the webinar slide deck – that showed how standards underlie home energy management networks, how they connect a smart home or building with smart grid and support other purposes, such as electric vehicle charging.

Jeff Gooding, IT Enterprise Architecture Manager, Southern California Edison (SCE), pointed out that standards are required to integrate customer energy systems with a smart grid in a way that ensures the security of data exchanges and safe, reliable interconnections with distributed energy resources.

Gooding added another point consumers need to know about standards: they form the platform for innovation around attractive consumer products and services, which will promote engagement and mutual success between energy providers and consumers.

In terms of lessons learned by SCE, Gooding said that the timeframe for a utility rollout of advanced infrastructure unfortunately often does not match up with the rapid cycle of consumer adoption of related technology in the home. These two value streams need to be better aligned for mutual value creation, Gooding said. Thus, utilities need to be flexible and adopt standards that will support multiple consumer technologies to enable customer choice and demand.

Erich Gunther, Chairman, Chief Technical Officer and co-founder of EnerNex, spoke in his role as Vice-Chairman of the Smart Grid Interoperability Panel (SGIP), whose mission is to “securely accelerate and advance grid modernization through interoperability.”

Gunther gave numerous examples of how standards support, for instance, utility-consumer energy data exchanges. The most telling example was his description of the diversity of participating offices and organizations involved in the creation of the Green Button initiative. As you know, Green Button provides consumers with access to their own energy use data and the opt-in ability to provide that data to third parties for value creation. The White House, the U.S. Department of Energy, the National Institute of Standards and Technology, and myriad legislators, regulators and innovators worked to make Green Button “an overnight success, years in the making,” Gunther said.

Gunther’s phrase really captures the painstaking standards process so crucial for the value that consumers must have to participate in an interactive energy ecosystem. That is, if we do a good job working together on standards so that consumers find it easy and attractive to engage with our collective energy future.

SGCC will continue to work to engage and inform industry stakeholders on consumer standards. Please let us know what else you think we can do. Beyond our recent webinar on the topic, please visit our standards webpage, where you will find a list of consumer standards as well as the first of three blogs on the topic, not counting this one.

Tuesday, September 8, 2015

Who Has Rights to Consumer Data?

By Patty Durand, Executive Director, SGCC

If you missed our recent SGCC Peer Connect Webinar on “Right to Data Access,” I’d like to connect the dots and provide resources for you.

The webinar presented two panelists with policymaking as well as industry implementation experience to discuss principles and practices in the vital area of access to energy use and grid data – for consumers, utilities, third parties, even policymakers.  Data on end users’ energy use and data on grid operations is of high value – the more granular and timely, the better, according to our panelists. Consumers and businesses should own their energy use data, while utilities, third parties and other stakeholders using that data in aggregated, anonymized forms should be responsible stewards of it. Energy use data can be the path to engaging consumers in ways to manage energy use, save money and practice environmentally sound energy-use behavior according to their values.

Utilities may find that making end-user data available to their customers will enhance customer loyalty in an era when customers have more and more energy choice. Our two panelists revealed how stakeholders can work together to achieve value creation for consumers and others through forward-looking data-related policies and programs.  With an increasingly digital, intelligent grid, we can achieve our societal goals of smarter, more efficient and environmentally sustainable energy practices, which are precisely the consumer aspirations reflected in SGCC’s research.

Now to our panelists’ points.

Cheryl Roberto, associate vice president for clean energy at the Environmental Defense Fund (EDF), has served as a PUC commissioner, a municipal utility leader, counsel for a state environmental agency and other significant roles in the energy space.

Roberto noted that the EDF has attracted significant stakeholder support for its embrace of market-based solutions to achieve widely supported environmental and sustainability goals. She also noted that, despite the widespread implementation of smart meters – some 50 million meters now serve 43 percent of U.S. homes – most Americans do not have access to their energy use data or do have access but have not chosen to access that data online. 

What are some of the ways that data can be enhanced to provide value? Utilities can use it to create customized service options, attract program participation and manage their operations and resource planning. And regulators can use data to design tariffs and evaluate utility performance. Data on energy use and grid operations can also be used by investors to assess whether their capital is yielding measurable results.

Roberto cited the EDF’s “Open Data Access Framework” that can simultaneously serve consumers, utilities, third parties and regulators while remaining competitively neutral to all parties. She pointed out that while NARUC and other organizations are in agreement at a high level, practical challenges arise in local implementation of the Framework’s principles. One such challenge is making the data useful, secure and private and balancing those values with the need to innovate and provide value to consumers. Utilities that hesitate to meet that challenge may find their customers’ loyalty wavering.

“Data is valuable enough that third parties will find a way to get it,” Roberto said. 

The Framework link above will provide a summary of principles that address customer ownership, their right to authorize (or withdraw permission for) others to use their data, and technical matters around data formats, security and other matters.

The Framework provided a segue for our other panelist, Ryan Ellen, director of advanced metering infrastructure (AMI) for Ameren Illinois, to discuss that utility’s phased approach to AMI and the implementation of the EDF’s Framework. Ameren Illinois is on track to install 188,000 smart meters this year on a multi-year march to 1.25 million in its territory.

As meters are installed, Ameren Illinois will provide data-based value to customers. During the webinar Ryan shared their “Right to Data Access” position on slide 23 for Ameren Illinois’ phased approach to AMI-based data functionality. Stage 3, scheduled for Q4 this year, includes a data-driven Peak Time Rewards Program and improved outage notification. Note that the webinar and slides are available to non-SGCC members. 

Details aside for the moment, what struck me was that Ameren Illinois worked with the EDF and its “Framework,” along with the local Citizens Utility Board (CUB) and the Illinois Commerce Commission (ICC) to reach consensus on how to meet the challenge of practical implementation of “Framework” principles. In fact, to Roberto’s point that most American consumers are not accessing available energy use data, Ameren Illinois is working on an app that allows mobile device access to meter data. 

In response to an audience question on customer uptake of data that’s available, the two panelists agreed that consumer education and engagement – the work we do here at SGCC – will take time. But once this value is established, many customers will increasingly avail themselves of the opportunity just as they do other areas of their life where data adds value. 

Tuesday, September 1, 2015

Clean Power Plan Aligns with Consumers’ Stated Goals

Last week, the Environmental Protection Agency announced its finalized Clean Power Plan (CPP) with new regulations to reduce carbon dioxide emissions from existing U.S. power plants. Much of the general industry conversation has focused on the CPP’s impact on utilities and the industry, and not centered around what consumers think about grid modernization and what they want from their electric grid. I am pleased, however, that our consumer research aligns with the CPP goals for a cleaner energy portfolio.  Consumers want a cleaner energy mix, according to SGCC’s foundational research series Consumer Pulse and Segmentation studies conducted over the past five years. In fact, a cleaner energy mix is the top benefit that consumers express when asked which of several benefits they feel is the most important utility grid investment.

In the absence of a national energy policy, the CPP offers clear direction. That direction includes shuttering inefficient coal-fired power plants, achieving grid efficiencies through technology adoption and increasing the amount of renewable energy on the grid – all goals of the smart grid. And the CPP offers flexible ways for states to create that mix, many of which are already well on the wait to achieving their target emissions reductions set for 2032.

The CPP’s stated purpose is to cut carbon emissions, increase public health and ensure that a cleaner energy mix with lower public health impacts stimulates economic growth. Of course, the CPP is a complex directive whose benefits and costs are being debated as you read this and will end up in the courts. The spectrum of reaction ranges from fossil fuel interests and Obama Administration critics who are forecasting reliability and cost issues. Some clean energy advocates say that, with current market trends, the CPP doesn’t go far enough, that the market already ensures that its goals will be met and, possibly, exceeded. In terms of financial markets, some are saying that the CPP’s most important role is to signal the capital markets on the direction of the power generation industry, creating confidence that positive, current trends toward a cleaner energy mix are likely to continue.

This is America, after all, and views will be widely discordant.

This is an excerpt from the full article, published in full on Smart Grid News > > >

Wednesday, August 5, 2015

SGCC Consumer Pulse and Segmentation Study: Are 1,000 Consumers Enough?

In 2011, Smart Grid Consumer Collaborative (SGCC) inaugurated our Consumer Pulse research program. We’ve completed five waves so far, most recently in late 2014. Each wave of the Consumer Pulse is a national telephone survey of 1,000 adult (18+) heads of household, interviewed via telephone by the highly regarded research firm Market Strategies International. This is the most reliable and scientifically valid research available on smart energy technology and consumers.
Occasionally, when I talk about the Consumer Pulse research at a public forum, audience members question how we can make statements about the perceptions and preferences of the entire U.S. population when we have interviewed only 1,000 people. This happened just two weeks ago while I was at a conference in Washington, D.C., with an audience member expressing doubts that 1,000 was large enough. While a blog post cannot substitute for a course in probability and statistics, I will try to address that concern here, very briefly.

There are really two ways to answer, one based on everyday experience, the other on theory and (sorry) some slightly complicated mathematics. First, let’s talk about your own experience with polling data. Remember the last presidential election? A day or two before election day, we were all reading polls that predicted the percentage of the national vote each candidate would receive, within a small “margin of error.” Most national political polls are based on one-two thousand interviews with “randomly selected” voters, and nearly all of the polls that were conducted competent, independent observers turned out to be accurate, within their margins of error.

Even now, the first GOP debate hosted by Fox News will be determined based on polling data with approximately 1200 survey respondents to determine which are the top 10 candidates based on voter preferences.

To say that survey respondents are “randomly selected” means that each person in the population we want to know about has an equal chance of being selected and asked to respond.  This is key because if, for example, people over 50 had a higher likelihood to be included in the survey than people under 50, the survey results would be “skewed” in the direction of older people’s opinions – the survey respondents would not be “representative” of the total population.

In our Consumer Pulse surveys, great care is taken to make sure that the respondents are selected at random – every US household has an equal chance to be included in the surveys. When data collection is complete, the data are weighted slightly by age, ethnicity, gender and region to align even more closely with national population parameters. This allows us to state that the margin of error for the total sample size of 1,000 is +/–3.1 percentage points at a confidence level of 95%. This means that there is a 95% probability that a Consumer Pulse finding we report is within +/–3.1 percentage points of the finding we would arrive at by interviewing every 18+ head of household in the U.S., if that were possible.

Proving this claim is where the math comes in. Statistical theory demonstrates that, assuming the people included in a survey are selected randomly, the required sample size n and margin of error E are given by the following formulas:
N x/((N-1)E2 + x)
Sqrt[(N - n)x/n(N-1)]
Egads!  I will not try to explain these equations (or pretend that I would be competent to do so), but they are governed by the laws of probability, one of the best understood and most practically useful areas of mathematics. If you would like to delve more deeply into this topic, there are many good statistics textbooks and academic websites to help you do so.
If you have stuck with me this far, I hope you are persuaded that the Consumer Pulse research is well-designed, rigorous and accurate. That is why we feel confident calling it “the most reliable and scientifically valid research available on smart energy technology.”

Friday, July 24, 2015

Do’s and Don’ts in Presenting Data for Consumer Engagement

By Patty Durand, Executive Director, SGCC

Since the term ratepayers has morphed into consumers in the electric utility world, utilities and their partners have explored how to engage them. The prevailing model, backed by research, suggests that giving consumers timely, detailed information on their energy use will raise their awareness, sometimes inspire their engagement and promote their program participation. The win-win outcomes include more efficient, cost-effective and more environmentally sustainable utilities, and more satisfied consumers.

In an era when utility business models are threatened by nimble, digitally and consumer-savvy third parties, discovering best practices in consumer engagement has taken on added urgency. One important element in this effort is to figure out the most effective practices in presenting consumer usage data and other utility-consumer communications to consumers.

Thus the title and focus of our most recent webinar, “Consumer Engagement with Data Presentment,” which featured three experienced practitioners and their lessons learned. Also - please pass the word that SGCC webinars are now open to anyone, not just our membership, and join us for our next webinar on August 26 “The Right to Data Access.”

I’ll select a few highlights from each of our three presenters, each of whom come to the topic from a unique perspective. Their findings and observations really fell into a set of do’s and don’ts. A few insights on what works and what doesn’t may well influence your thinking on consumer engagement best practices.

Becky Williamson, strategic marketing coordinator for Memphis Light, Gas & Water, noted that her distribution utility offers electricity at below the national average cost and MLG&W’s customers have some of the highest per capita electricity consumption. This is in part driven by widespread use of electric heating among local households. MLG&W’s goals include raising consumer awareness of their consumption and lowering their usage and bills, automating customer service including payments, promoting utility programs, and raising customer satisfaction – the whole enchilada. Advanced metering infrastructure (AMI) is the source of the utility’s consumer data.

MLG&W’s findings are that a pilot program that relied on in-home displays using the Zigbee protocol experienced too many interface glitches which led MLG&W to expand its online portal – “My Account Dashboard” – for consumer data delivery. The dashboard presents data in many ways and at various depths. “Customers can choose how deeply they want to dig into their data,” Becky said. One related issue for the utility/presenter of data is the degree of data granularity. MLG&W offers electricity consumption data in various formats, from month-to-date to 15-minute intervals.

Brewster McCracken, president and CEO of Pecan Street, Inc., presented a dozen data-driven insights gleaned from field trials in 1,200 homes in 11 states equipped with data acquisition devices. You’ll remember that Pecan Street is a neighborhood in Austin, Texas, outfitted as a virtual lab for testing energy-related technologies and behaviors. A handful of McCracken’s points that caught my ear may be of service to readers shaping their own consumer data presentment programs.  

All broadband- or cellular-based data presentment strategies are prone to frequent, although brief interruptions, McCracken said. The implication is that data-caching abilities are needed on the measuring device itself to avoid loss of data.

More than 80 percent of discretionary electricity use in peak hours is spent on air conditioning, according to McCracken’s data. The implication is that comfort is very important to consumers. And pricing trials to change that behavior made little difference, he reported. My thought here is that perhaps other strategies will prove useful in load shaping for summer afternoons.

McCracken also reported that seasonal variation is prominent in HVAC (heating, ventilation, air conditioning) use generally, versus other appliances, which typically are low consumers of electricity but are always on. And HVAC-driven usage spikes are most prominent among residential consumers.

“Residential AC is the biggest thing to focus on,” McCracken said, referring to energy efficiency or demand response programs.

Mimi Zhang, product manager for Silver Spring Networks, confirmed some critical connections from a vendor’s point of view. Silver Spring Networks is a networking company with a consumer focus.

“A consumer engagement focus is critical to grid modernization,” Zhang said. “Engaged consumers are important to [utility] program participation and customer satisfaction.” And she added that consumer engagement requires data.

Zhang suggested that utilities installing AMI should immediately offer programs with value for consumers to connect the costs they inevitably pay with the value they expect in return. For instance, she pointed to Oklahoma Gas & Electric, which did just this and saw customer satisfaction spike as a result.

The drivers in effective data presentment, according to Zhang: maintain consumer interest in online portals by, for instance, embedding a customer’s month-to-date usage and charges on the opening home page; limit their efforts by making presentment clear and simple; and tackle the mobile device first to reach more consumers.

The principles outlined by our presenters suggest that best practices in consumer engagement and its corollary, data presentment, are maturing. And it looks like the ecosystem of research to inform utilities and their partners already has achieved results. That’s good news for everyone in the business of consumer engagement.  

Wednesday, June 10, 2015

The Changing Utility Business Model – and the Consumer

By Patty Durand, Executive Director, SGCC

As most of you know, fundamental shifts in technology, utility practices and consumer behavior are affecting the power provision paradigm. The effects on the utility business model are many, while the outcomes remain uncertain. This theme was underscored by participants in our recent webinar, “The Changing Utility Business Model.” If you were unable to attend but would like hear the recording and see the slides, please go here.

Gary High, senior vice president for smart grid solutions at metering solution vendor Landis + Gyr, set the stage by describing a number of key trends now transforming the electric utility landscape.  Demand is flattening due to improvements in energy efficiency, conservation, demand response programs and escalating adoption of distributed generation. Consequently, revenue from volumetric sales has flattened, while fixed costs remain.

Other trends are buffeting utilities too. According to High, those trends include the advent of electric vehicle charging, energy storage, smart appliances and programmable thermostats. Utility programs affecting consumer behavior include transactive energy, prepayment, variable rates and net metering.

One trend that’s likely to impact the utility/consumer relationship is whether utilities achieve cost recovery from volumetric, kilowatt sales or through fixed rates that pay for infrastructure. High said this shift is being widely discussed and I agree with him that such a shift will be a major area of interest and concern to both utilities and consumers going forward.

Joe Barra, senior consultant for business model development at the investor-owned utility Portland General Electric, described the many ways in which PGE is adapting to the trends outlined by High. Most interesting to me was Barra’s description of how PGE mashes up metering data with customer segments (based on socio-economic, load-based and attitudinal segmentation) to better understand its customer base.

For instance, PGE has distinct summer peaks from increasing air conditioning use among its customers, while winter peaks result from legacy use of electric heating. These insights have driven PGE consumer programs offering demand response and dynamic pricing. My takeaway is that the advanced metering infrastructure (AMI) projects partly funded by the American Recovery and Reinvestment Act (ARRA) have begun to deliver useful data beyond offering utilities operational efficiencies and, in PGE’s example, this appears to be good for consumers.

In fact, PGE offers an online “Energy Tracker” service that lets consumers see their current electricity usage and a variety of related metrics and analyses. This is a fundamental service for consumers that allows them to make informed choices and, thus, empowers them. Consumer engagement is one result that meets fundamental utility goals as their business models begin to shift. It’s fantastic to see it happening.

Rob Caiello, vice president of marketing at consumer engagement firm Allconnect, cited SGCC research to frame the utility-consumer relationship. Generally, the public has low awareness of “smart grid,” but when smart grid benefits are described, consumers exhibit high interest, Caiello noted. Consumers also exhibit high interest in utility programs, but a significant proportion (more than 40 percent) don’t believe that utilities always act in consumers’ best interests. These attitudes may partly explain why the adoption of energy-related products and services remains low, Caiello said.

Asked what single factor drives utilities to request Allconnect’s services, Caiello cited consumer engagement and its corollary, consumer satisfaction. So utilities are certainly aware that in many cases they need outside help in that department.

Caiello described several shifts in utility practices that could create “stickiness” with their customers. In the past, utilities have simply sought to sell their most profitable products. But if utilities sought what was best for their customers, perhaps in personalized offerings, they can build trust and lifetime loyalty. Where a utility once sought to brand itself to its customers, in the future it should consider improving customer satisfaction to the point where customers become brand ambassadors via social media. Though utilities use data to make decisions, they could also use data to inform new programs.

Clearly, from PGE’s presentation, some of Caiello’s points are being put into action. Many utility programs in fact seek to work with consumers to mutual benefit. But because many trends discussed in our webinar are nascent or their effects have yet to fully impact the utility business model, these discussions inevitably will continue, perhaps with increased urgency.

We'll continue the discussion this September 24-25 at our annual members meeting in Houston, Texas, sponsored by CenterPoint Energy. As far as I can tell, CenterPoint Energy is out in front and a leader in terms of converging their IT and OT platforms. We’ll hear how they did it, what the challenges were, and what benefits both the utility and their consumers are experiencing.

SGCC members, please join us for the Members Meeting and Interactive Workshop by registering here. There is no charge to attend.

Monday, April 6, 2015

Opportunity knocks: Engaging utility customers to drive satisfaction

By Patty Durand, Executive Director, SGCC

Our recent SGCC webinar focused on our latest research report, “Consumer Pulse and Market Segmentation Study – Wave 5” and I will share a few highlights here because SGCC’s research has matured beyond theory to being directly applicable to the power industry’s interest in customer engagement.

The study’s mundane title disguises its significance as you will in this summary. And in articulating these research findings, I will highlight the expertise of three knowledgeable people who presented on our webinar. Jack Lloyd now serves as coordinator for SGCC Research. Jack retired as vice president of Market Strategies International last year and brings a career of consumer research to us. Gomathi Sadhasivan chairs the SGCC Research Committee and works as a senior consultant at DNV GL. Mike McMahan is vice president for advanced metering infrastructure (AMI) at Commonwealth Edison (ComEd), based in Chicago, which is providing solid information to its customers on smart meter benefits.

Jack and Gomathi opened the webinar by providing insight on the statistical integrity of the Wave 5 study as well as its key findings; Mike McMahan added real-world insights into ComEd’s high-touch approach to its ongoing AMI deployment.

As presented by Jack and Gomathi, The Consumer Pulse study provides a segmentation framework designed to better understand U.S. consumers according to their values and attitudes about energy. The report’s data identifies five consumer segments:

  1. Green Champions (30%) demonstrate the strongest interest in new utility services and smart energy programs. They are early technology adopters, the youngest segment and the most environmentally-conscious. “Smart energy technologies fit our environmentally aware, high-tech lifestyles,” they might say.
  2. Savings Seekers (20%) have low satisfaction with current utility provider, and want a choice. Awareness and favorability toward smart grid and smart meters are low; however, the segment views smart grid benefits as important. They might say “How can smart energy programs help us save money?”
  3. Status Quo (18%) have a lower interest in smart energy programs than any of the other segments. The segment is relatively older, where comfort and ease are more important than conservation. They are likely to say, “We’re okay; you can leave us alone.”
  4. Technology Cautious (17%) are more knowledgeable about smart grid programs, but have little interest in participating in them. They might say “We want to use energy wisely, but we don’t see how technologies can help.”
  5. Movers and Shakers (15%) are the highest income segment and smart grid awareness and favorability are high, but utility satisfaction is low. They are thinking, “Impress us with smart energy technology and maybe we will start to like the utility more.”

Of course, each segment has numerous attributes that further define it, and there can be overlap between segments. Real people can inhabit several categories and every utility is likely to have a different percentage mix of these segments. Nonetheless, understanding each segment can lead to effective  messaging about smart energy programs and services that engage customers and leads to customer satisfaction.

During the webinar, Jack Lloyd noted that none of the five consumer segments are dominant, yet none are niche. Some clearly are more open to being approached than others. Green Champions, for instance, exhibit strong interest in smart energy programs, are likely early technology adopters and exhibit average satisfaction with their utility. Opportunity! This is true, each in its own way, of all five segments.

Gomathi pointed out that Wave 5 research and SGCC’s segmentation framework, combined with a local utility’s load shape data, can yield priorities for both program design and messaging. For example, consumers in the top quartile of energy usage are prime candidates for savings if they address peak time use.

Mike McMahan added that, at ComEd’s scale – it is installing 25,000 smart meters per week – its high-touch program of customer engagement is already complex. Adding segmentation would introduce practical difficulties. The opportunity here is for after the fact segmentation to come in when the utility is ready to introduce new programs and services that increased data and communications equipment will allow, increasing customer satisfaction in those investments.

SGCC’s customer segmentation framework, for the first time, provides a low cost tool to our members  with which a utility or third-party can mash-up individual energy consumption data to further refine consumer messaging - or even develop smart energy programs that benefit both utility and customer. Please contact me for more details about that.  

Our research also shows that most consumers still are not familiar or knowledgeable about smart energy, yet their interest is high. The benefits of Smart Grid, when described, have broad consumer appeal that can be leveraged to build trust in the messenger. Innovative pricing programs draw high interest and our report explains which pricing programs are most popular and why. Critical peak rebates draw a whopping 60 percent of potential participants.

Disappointingly, consumer knowledge hasn’t grown significantly over the past four years we’ve conducted our consumer research, though negative attitudes have increased slightly.

Consumers are interested and want to hear more about smart energy, and our segmentation studies provide the basis for targeted messaging. Some utilities have pursued this opportunity while others are waiting. Meanwhile, fear mongering about smart energy technology has somewhat bolstered negative attitudes. That leaves an open door for utilities and their partners to communicate the consumer value proposition to their customers and provide meaningful insights to them about the value and benefits to them for grid modernization. Access to data, variable pricing programs, and programs and services that consumers will find value in will engage consumers in positive, value-enhancing ways.

The bottom line here is that consumers are open to learning more about the benefits of smart energy practices and programs and, if engaged, are likely to participate. Utilities and their partners can take this research and make new opportunities to drive customer satisfaction through programs, services, and messages that appeal to consumers in the areas they care about. To learn more and access the Consumer Pulse study findings, visit

Monday, March 16, 2015

Seniors and Smart Grid: Challenges and Opportunities Part II

By Patty Durand, Executive Director, SGCC 

My topic today is a continuation of my last blog post about Smart Grid Consumer Collaborative’s (SGCC) webinar on the Consumer Pulse: Focus on Seniors report. However, I would like to take a closer look into the research portion of the senior consumer analysis.

The Consumer Pulse: Focus on Seniors study, is an consumer analysis which takes a deeper dive into the data collected from SGCC’s national flagship research series, Consumer Pulse Wave 1-4, which was collected during 2011–2013. This analysis was undertaken to help smart grid stakeholders understand seniors’ awareness, favorability, expectations and preferences as they relate to the smart grid and smart grid-enabled programs/technologies.

In the energy industry, there is no single study that explores seniors’ attitudes toward the smart grid and energy programs. Therefore, this new analysis provides insight for utilities and the smart grid stakeholder community on a demographic that is not well understood. The report puts context around and answers the key question: What benefits do seniors value most from a smarter grid? 

There is no consensus on when someone becomes a senior citizen. For AARP, it’s 50, for the federal government, it’s now 65 (when you receive full Social Security benefits), and for marketing purposes, it’s sometimes 54. For this report, the two senior groupings we used were 55 and older, and 65 and older. These are the ages where notable differences in attitudes and behaviors often emerged. These two groups were then compared to the general population.
The results from the analysis revealed that seniors say “saving money” and “reliability” are the most important and favorable smart grid benefits. Ironically, seniors are less likely than their younger counterparts (18 – 54) to participate in or have an interest in smart grid programs and technologies that have the potential to save them money.
For seniors who had favorable attitudes toward smart meters their primary reason was lower electric costs, while younger people found energy conservation more appealing. Also, more than half of the seniors surveyed said they would participate in critical peak rebate programs.

The study showed that a significant number of seniors (20 percent) indicated they do not know who to look to as a "trusted source" regarding smart grid information – suggesting an opportunity for utilities to position themselves in this role.
One of the top takeaways from the study illustrates that utilities need to be cognizant of media preferences when engaging seniors, who prefer traditional media channels such as print, radio and television. Moreover, their awareness and favorability of the smart grid can be influenced through education on these channels.
The study’s results support SGCC’s fundamental research findings illustrating that an engaged customer is a more satisfied customer. And utilities have the front-line opportunity to engage their customers and shape the relationship. There remain significant opportunities to engage with and educate the senior population about the vast benefits of a cleaner, smarter electric grid.

To download the report and learn more, visit here.

Friday, February 20, 2015

Seniors and Smart Grid: Challenges and Opportunities Part 1

By Patty Durand, Executive Director, SGCC

SGCC released a new research report, “ConsumerPulse: Focus on Seniors,” that pulled age-relevant data from four earlier, annual Consumer Pulse studies to develop a factual basis for understanding seniors’ knowledge, attitudes, perceptions and concerns relative to smart grid.  Our research release webinar included speakers Bill Malcolm and Gerri Madrid-Davis from AARP and Lisa Magnuson from Silver Spring Networks.

Lisa Magnuson, vice president of global marketing, Silver Spring Networks, sponsored the “Consumer Pulse: Focus on Seniors” research. She spoke of their Power Over Energy global literacy campaign which seeks to educate consumers about electricity. Magnuson also spoke to the effectiveness of proactive customer education and shared ways to do that.

Bill Malcolm is senior legislative representative, state advocacy and strategy integration at AARP. Bill addressed AARP’s stance on smart grid issues in general and its consumer-related concerns in particular. Bill shared with the audience that AARP policy guidelines can be viewed in their biennial Policy Book which is linked above.

As with the general population, seniors are not a homogenous group. They reflect the same diversity of motivations found in the general population. The challenge for stakeholders that emerged during the webinar discussion is how to address traditional concerns and protections for vulnerable groups such as seniors while also allowing seniors to participate in smart grid-enabled programs.

SGCC’s “Consumer Pulse: Focus on Seniors” pulled data from four annual consumer surveys that yielded data on consumers ages 18-54 and those over 55. American consumers ages 55 and over are not the typical definition of “seniors,” but this approach allowed us to draw on a statistically significant number of older Americans to see if their knowledge, attitudes and concerns differ from their younger cohorts.

Seniors share, in roughly similar proportions, the five motivations that drive the general population – customer segments we’ve titled Traditionals, Concerned Greens, Young America, Easy Street, Do-It-Yourself and Save.

Like the general population, seniors’ knowledge of smart grid and smart meters is low; about 10 percent or less claim solid knowledge, about 20 percent have heard the terms but don’t know their meaning and about 50 percent have not heard the terms.

We know from our research that seniors welcome information on smart grid. Messages such as “how to save energy (and, thus, money)” is a good way to reach many seniors, and we also know that seniors prefer big box retailers and utilities as their trusted energy advisors. In fact, seniors place high trust in their utility, unlike younger consumers. And utilities with the right messages can reach seniors via traditional channels such as newspapers and television which is their preferred source over younger people, who prefer social media and digital channels.

Magnuson noted in her talk that proactive consumer education mitigates potential opposition, addresses concerns prior to technology deployments, aids receptivity, boosts customer satisfaction and underscores the utility role as a trusted advisor. These findings are based on recent studies by JD Powers, Accenture and SGCC.

Magnuson also presented a customer engagement framework with specific steps that include creating a stakeholder plan and an educational plan, carefully selecting trusted messengers, creating customer-centric messages, proactively addressing concerns, and showcasing customer successes.  

She also pointed out that the Power over Energy research findings captured the essence of seniors’ attitude towards smart grid: “We wish someone would tell us how Smart Grid can help us save money and help the environment.” As examples, Magnuson pointed to two success stories: San Diego Gas & Electric hired retired employees to have face-to-face conversations with consumers, and Florida Power & Light partners with Miami Dade College on “Energy Savings Essentials” courses.  

AARP’s Malcolm articulated his organization’s position on many issues typically aired during the regulatory process, many pertaining to utility cost recovery. In the big picture, AARP supports both reliability and affordability. On smart grid-related points, AARP seeks the protection of vulnerable customers; it opposes mandatory time-of-use (TOU) rates; it favors a demonstration of customer benefits and how they are realized prior to cost recovery approval; it is opposed to remote disconnections, made possible by advanced metering infrastructure without an effort to personally contact a customer; and it favors data privacy.

Everyone agrees that a clear demonstration of consumer smart grid benefits is beneficial to stakeholders. Everyone agrees that consumers’ voices should be heard on the process and the results of grid modernization. And everyone agrees that gaps remain between the power industry’s approach to grid modernization and AARP’s concerns on behalf of their membership.