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.