Monday, May 8, 2017

Utility Innovation and Customer Engagement Successes

The landscape for customer engagement for energy providers has changed quickly over the last few years. Younger generations with different sets of values are emerging as increasingly important target demographics. The proliferation of smartphones, social media and mobile apps is creating new channels where some customers expect interaction. And customers’ experiences with companies like Amazon, Verizon and Lyft are influencing these customers’ expectations for their relationship with their electric provider.

In this new world of evolving expectations and emerging innovation, members of the Smart Grid Consumer Collaborative have led the way in demonstrating how to effectively reach and engage consumers. Let's take a look at how three SGCC members have maximized customer engagement around residential solar, demand response/smart thermostats and microgrids, respectively.

Get on board the Solar Express in Snohomish County

Located just north of Seattle, Snohomish County is one of the fastest growing counties in the United States. It's also notable for being home to one of the nation's most innovative municipal utilities.

Snohomish County Public Utilities District (SnoPUD), the second largest publicly owned utility in Washington, serves over 341,000 electric customers throughout a service territory that covers more than 2,200 square miles. Led by progressive leadership that has for years emphasized the importance of adapting to climate change, SnoPUD launched its Solar Express program back in 2009 to drive the adoption of rooftop solar.

To get the program off the ground, SnoPUD relied on several aspects, including cash incentives, local media outreach, community engagement and education.

For qualifying Solar Express customers, the utility initially offered up to $2,500 in cash incentives for residential customers that installed their solar system via a SnoPUD-approved solar contractor and had their installed system inspected by the utility. In addition to the upfront financial incentive, customers were also benefitted by positive Washington State policies and programs around net metering and residential renewable energy production.

The impetus of the Solar Express program was the high consumer demand in Snohomish County, and the utility capitalized on this interest to develop a robust community outreach program that included targeted letters, printed inserts, community meetings, solar fairs and solar home tours. Due to the high interest in the local market, it was easy to attract local media attention to the program, and over the years, cultivating social media discussion and word-of-mouth testimonials has been crucial for sustaining interest in the program.

SnoPUD also supported community-led, grassroots efforts to promote installations, whereby neighbors could get together, identify an ideal solar installer and obtain lower cost for multiple installations. Furthermore, the utility partnered with area schools and local businesses to install solar demonstration projects where the community could learn directly about solar energy.

Over the years, the Solar Express program has been a shining success. The first megawatt (MW) of solar was installed in three years, but the second MW came less than 18 months later. The third MW was added less than a year after that.

Today, the program is at nine MW of installed solar, and system costs are down significantly. While some of the financial incentives are going away after this summer, the utility will still offer an education and information program for customers interested in solar energy.

Demand response, BYOT and holiday promotions at CPS Energy

Down in San Antonio, Texas, another SGCC member, CPS Energy, has seen impressive growth and high customer satisfaction with its Bring Your Own Thermostat (BYOT) program.

With nearly 800,000 electric customers, CPS Energy is the largest municipal utility in the U.S. and is also a leader in encouraging energy efficiency and reduction in their community. Through the Save for Tomorrow Energy Plan, CPS Energy aims to reduce community demand for electricity by 771 MW by 2020 – roughly the same output of a small-ish power plant.

In addition to energy efficiency and solar, CPS Energy’s demand response program has been a key part of achieving this goal, and to effectively promote demand response to their customer base, CPS Energy developed a wide-ranging outreach and education program that included newsletters, paid advertisements, partner outreach emails, local TV spots, in-store promotions and much more.

The three main concepts driving their outreach were:

1) Create value for customers.
2) Meet customers where they are and when the best deals are available.
3) Eliminate cost barriers.

The program outreach also was strategically aligned with the holiday season, and in particular, Black Friday, a day when consumers are already expecting to spend to get significant deals from retailers. To increase adoption of their BYOT program, CPS Energy increased their smart thermostat rebate from $89 to $150, so customers could go out and buy a Nest thermostat for just $19 on Black Friday.

From year one, the program was a massive success. With a first year goal of 1,000 new customers, CPS Energy nearly doubled that figure. Thanks in part to helpful partners like The Home Depot who allowed CPS Energy to promote BYOT in store during the holidays, the program grew by 40 percent in six weeks.

And after the program was over, CPS Energy expected fewer enrollments; however, due to community awareness and word of mouth, post-event enrollments doubled.

In year two, CPS Energy offered the same financial incentives to consumers but pursued a different angle on marketing the program. Capitalizing on the heightened community awareness from the prior year, CPS Energy backed off some of the media spend but increased their presence on social media. Despite the drastically decreased marketing budget, CPS Energy added about 3,300 new customers, and the program became increasingly cost effective for them.

In the past two years, the San Antonio community has embraced CPS Energy’s BYOT program, as the program has quadrupled in that time. The BYOT program meets customers’ needs by allowing them to conveniently select their own device and save money, yet it remains the most cost-effective program CPS Energy’s demand response program.

Analyzing the results of community microgrid projects

Microgrid projects are being deployed at an increasing rate across the country, as they offer financial, resiliency and other benefits in many applications. SGCC member Energetics, a Columbia, Maryland-based management and engineering consulting firm, has extensive experience working with partners on microgrid projects.

While most of the microgrids that have been deployed are single-customer projects, like military bases, data centers, hospitals and universities, a major next step in this area is the development of community microgrids, which offer a more complicated set of requirements in the implementation and operation. With multiple customers, meters and even connection points with the grid, there's a higher level of coordination required in this emerging model that usually requires utility involvement from the beginning.

Prompted by the widespread devastation caused by Hurricane Sandy, the State of New York has been funding and conducting feasibility studies on the application of community microgrids that could restore power more quickly in the event of another superstorm or similar scenario. Over 80 projects were submitted in the first round for communities across the state, including Brooklyn, The Bronx, Syracuse and Yonkers, that were assessed for their technical feasibility, environmental suitability and also, importantly, the value proposition to the community.

Collectively, these 83 feasibility studies represent the world's largest body of literature on community microgrid design. Prior to this initiative by New York State, there was very little information globally on designing community microgrids and around the policy implications and the technical hurdles that need to be overcome.

After the initial studies were collected, Energetics was tasked with data mining the studies to determine best practices and lessons learned, especially around community involvement and customer concerns. In most of the communities, engagement in the process of designing a local microgrid was high, and community members came together as teams to determine the specific concerns of the community, most often environmental issues and the cost of residential customer electricity rates.

While microgrids, particularly multiple-customer microgrids, are still a burgeoning part of grid modernization, the New York State program has developed a solid base of information that other projects can utilize going forward.

To learn more about utility innovation and customer engagement successes, SGCC members and member prospects are invited to attend the 2017 Members Meeting & Fall Workshop in Austin, Texas on Sept. 13-14. The two-day event will feature sessions on the connected home, millennials, distributed energy resources, electric vehicles and more.

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