Readers Respond to 'Changing Consumer Behavior'

Phil Carson | May 06, 2010

 

When it comes to that sometimes elusive and always fascinating animal - the consumer - a lot of folks are paying close attention.

Whether it's the consumer's role in adopting technology and modifying behavior inside the home (or not) or their grasp of smart grid issues as it relates to taxes and electricity rates, the consumer remains critically important to smart grid discussions in many minds.

That includes the minds of our readers, who wrote in with thoughtful responses to this past Wednesday's column titled, "Changing Consumer Behavior: Nothing New Under the Sun."

Some of the best responses came via backchannel to me, so I share them here, while protecting the privacy of those who did not post publicly. (I cleared this with the writers first.)

The column was based on consultant Christine Hertzog's participation on a panel at the Peak Load Management Association's spring conference on April 30. Hertzog suggested that other industries have already implemented retail communications strategies that electric utilities could borrow. She acknowledged, however, that most other industries have not had to change consumer attitudes and behavior to the degree that electric utilities must as they implement smarter grids.

One reader suggested that utility use of consumer usage data "will become a valuable revenue stream." As the sale of electricity once represented the bulk of utility revenue, so in the future consumer data-inspired additional services will become utilities' new revenue source as conservation-minded consumers use less electricity, in this reader's view.

Electric utilities will be spurred to engage consumers in earnest, this writer added, "when competitive processes are introduced by others like Google, Microsoft, Sun and even GE or other appliance manufacturers who create the computer application or little black box that can sit on your counter to be read or to alarm when usage patterns are not beneficial."

"Google, Microsoft and others are already close to offering systems that provide appliance-level granularity systems for consumers. Hopefully their introduction and acceptance by consumers will be a motivating factor that will move the electric utility industry" become more consumer savvy, this reader concluded.

Another reader warned, however, that utility access to data beyond the aggregate total measured by smart meters, for instance, would bring backlash. Granular, applicance-level data will spark outrage over privacy issues, this reader said.

"First, utilities should not depend on receiving appliance-level data from consumers. Simply acknowledging that smart meters have the ability to collect this information has already set off a firestorm of protests, most notably from privacy advocates who point out the dangers if this information is not handled with the utmost care," our second commenter wrote. "The cost of gathering and protecting that data is probably not worth the benefit other than in limited amounts for research purposes."

"Second, I think automation is more important than some sort of in-home display," this reader wrote. "Consumers need to be able to 'set and forget' major energy-consuming appliances."

"Third, I challenge any assertion that utilities will be worse off if consumers turn to third parties for help managing their energy bills," this reader concluded. "Has any utility conducted an objective analysis to determine how their earnings and growth prospects would be impacted if consumers employ third parties to provide commodity and energy management advice? Your readers should be skeptical of any claim (to this effect) until proved otherwise."

A third reader reacted with total skepticism that any value arises from consumers' energy management efforts. Estimating that an average monthly electricity bill might be $100 and active management could reduce that by 10 percent, this reader figured a $10 monthly savings, a negligible gain in a typical monthly household income of $2,500.

"Is the average person really going to limit peak use after work, analyze a complicated bill, and mess around with fancy metering when the payoff is $10 a month? Knowing they are paying an extra 30 cents a day for that luxury isn't going to bother many," he concluded.

We welcome this latter writer to our fold - and I wonder who among you would like to tackle that notion? I have a feeling that readers who do respond may cite the expected advent of critical peak pricing, which would increase the gain from managing home electricity use and the "set it and forget it" mantra mentioned above, which eliminates most effort from the process.

But you, dear reader, should feel free to say "yea" or "nay" to the contents of this column - just be sure to mention why you think as you do.

Phil Carson
Editor-in-chief
Intelligent Utility Daily
pcarson@energycentral.com
303-228-4757