The consumer-centric approach to the smart grid
Smart Grid Consumer Collaborative holds symposium in San Diego
On an industry-wide basis, some utilities may already be losing the battle to successfully educate their customers about the smart grid. Yes, there are utility success stories. And, just like high school, they're getting an “A” from their consumers because they did their homework ... and they did an awful lot of it ... before deploying smart meters.
“The most successful smart grid marketing effort today is the marketing effort of the opponents to smart grid in the San Francisco Bay area,” business development consultant Craig Boice, vice president of the Boice Dunham Group, told a roomful of electric utilities and their vendor partners yesterday afternoon in San Diego. “In six to nine months' time, they changed the mind of consumers about what smart grid is all about.”
At the first-ever symposium sponsored by the Smart Grid Consumer Collaborative (SGCC), Boice was speaking plainly, as did consultant/panel members Ahmad Faruqui (principal, The Brattle Group), Chris King (president of eMeter Strategic Consulting) and Judith Schwartz (president of To The Point and the SGCC's research director). My colleague Phil Carson has an excellent interview with Schwartz also running in Intelligent Utility Daily today, discussing the SGCC's “2011 State of the Consumer Report,” which she authored.
Part of the problem, according to King, is that “in this industry, the way it is regulated, it's easy to have a big voice.” Easy for consumers, that is. And they've learned that lesson quickly: go to the Public Utilities Commission (PUC) and demand a hearing. On the other hand, it's not as easy for electric utilities to have that same “big-stick” voice.
So what's the answer? That's what the SGCC is all about. A non-profit organization aiming to gather all stakeholders to listen, educate and collaborate toward modernized electric systems in the United States, the SGCC feels that industry leaders – consumer and environmental advocates, technology vendors, research scientists and electric utilities alike -- must urgently pool resources to gain knowledge of what consumers need and how to communicate with them by listening to their concerns.
“The fundamental problem is that we don't get out enough,” Boice said. “In any other industry, we would be focused on consumer demand.” He argued that we haven't yet found a way to bring the consumer into the story. “The smart grid story that we're telling – good grief! We're arguing about being able to change lines on our bill,” he said.
“If we look to other industries, they are all working to create customer demand. We have to come up with compelling enough products, and a compelling enough story, to create customer demand,” he added.
A second panel later in the afternoon took a closer look at utility consumer education programs that were getting a positive grade from their consumers. Key to American Electric Power Ohio's program, pre-deployment, is consumer interaction on many levels, the company's corporate communications director, Terri Flora, told the audience. “Our challenge: we can't think like a utility, we have to think like a Best Buy. And that's very difficult for us,” she said. “We are out there frequently, talking about what smart grid is, and why it's important. It's all about breaking it down into foundational messages, and then we repeat, and repeat and repeat,” she said.
“Every time we focus on customers accepting a program, every time we focus on customers accepting a rate, that's utility-centric,” said Shaltreece Reddick, customer value services program manager for dynamic pricing for Consumers Energy. (Reddick was responsible for the implementation of Michigan's first-ever dynamic pricing pilot in 2010.)
“Smart grid is more than about programs, it's more than about technology, it's about getting customers to accept smart grid as whole.” Key to gaining acceptance, Reddick said, is incrementation. “The first step is basic energy education. Then insert the benefits education....then deployment education. Then we tell them about deployment.” Two key words resounded throughout the day: “engagement” and “trust”.
“There is enormous fear associated with the use of smart meters,” Ontario Information and Privacy Commissioner Dr. Ann Cavoukian told the SGCC symposium. Targeted, thoughtful education seems to be the answer.
It's all a matter, to borrow Shaltreece Reddick's succinct explanation, of moving consumers from enablement to empowerment.
Comments
Consumer-centric, utility style?
Alfred North Whitehead once suggested, "When one is lost, one should not ask where one is but rather where the others are." Yet, the approach most utilities adopt on smart grid are decidedly inside-out, i.e., let's check in on best practices or talk with one another to adjust our approach. Is it only me or where were the customers at the SGCC and in the follow-up articles?
I am waiting for a utility to reach out and engage a critical number of innovators in their service territories with an offer to bankroll some smart grid technology experiments. Let them play with new approaches and share their discoveries with their friends. Let enthusiasm for this develop from the bottom up, like people develop enthusiasm for iPhones, Netflix and just about anything else that is interesting and useful today.
And along the way forget about the 'everybody is in or out' and 'one size fits all' approaches utilities seem wedded to. Maybe there has to be a 'one size fits all' backbone but the sizzle is going to come from how and what can be built off of this. Let customers learn what can be done and then help sell product line extensions. Most utilities are making this way to hard. Time to try a new, more partnering approach.
Consumer-centric, utility style?
Alfred North Whitehead once suggested, "When one is lost, one should not ask where one is but rather where the others are." Yet, the approach most utilities adopt on smart grid are decidedly inside-out, i.e., let's check in on best practices or talk with one another to adjust our approach. Is it only me or where were the customers at the SGCC and in the follow-up articles?
I am waiting for a utility to reach out and engage a critical number of innovators in their service territories with an offer to bankroll some smart grid technology experiments. Let them play with new approaches and share their discoveries with their friends. Let enthusiasm for this develop from the bottom up, like people develop enthusiasm for iPhones, Netflix and just about anything else that is interesting and useful today.
And along the way forget about the 'everybody is in or out' and 'one size fits all' approaches utilities seem wedded to. Maybe there has to be a 'one size fits all' backbone but the sizzle is going to come from how and what can be built off of this. Let customers learn what can be done and then help sell product line extensions. Most utilities are making this way to hard. Time to try a new, more partnering approach.
Consumer concerns = industry opportunities
Paula, thank you for your cogent comments on this topic. At DistribuTECH this week, I had the opportunity to talk to a number of industry leaders about cyber security, communications infrastructure, privacy and data analysis. During our conversations, examples in the banking, insurance, health care and telecommunications industries came up frequently. Looking to other such industries for best practices, especially in the absence of standards in certain areas of the evolving electric utility space, we are learning quite a bit.
With regard to your final point about complexity, I completely agree. In the new January/February 2011 issue of Intelligent Utility magazine, Patti Harper-Slaboszewicz made a similar point in her article "Dynamic pricing gurus needed". I encourage you to read it, as I think you'll enjoy the way in which she talks about using an Apple Store approach to selling dynamic pricing to consumers.
Kate
Consumer concern is not a hurdle, but an opportunity
I have been reading, with great interest, many energy industry articles related to marketing the launch of smart-grid technology. As a technology marketing professional, I have worked with network providers and software companies in developing, launching and marketing new (and sometimes revoluntionary) products. While deploying new technology takes skill, a fair amount of consumer research, education and repeat messaging, it is not a new process.
For those who think the consumer is "fearing" the smart-grid, I would ask you to define those fears and then see how these "fears" align to the anticipated benefits. For example:
Security- Just as our banking is automated and can be done using wireless transmission, so too will our energy. Encryption (a coding technique used in computer transmission and is required for all Banking entities) will element/reduce the possiblity of someone hacking into the wireless network. Smart meters and (hopefully) new billing will provide greater control over home energy consumption by showing detailed information on things like time of day and day of week consumption.
Price Increases-This is a valid concern and one which has to be addressed honestly. Utility costs are going to continue to increase. Given that reality, smart-grid technology will allow utilities to better manage their network efficiency and consumers to better manage their home consumption. These efficiencies should translate to smaller price increases.
Complexity- For those of us who are technology challenged (think programming a VCR), this is also a valid concern. With the proliferation of social media, training materials are simply a click away. For those without computers, toll-free support and/or office support should be provided, similar to that received by your cable company. Like any new technolgy there is an adaption period, but once you have embraced the new technology you often find that you can't live without it.
Smart-grid deployment is creating a paradigm shift in the energy sector because of the control it places in the hands of consumers. To prepare for this shift utilities should look outside of their industry for professionals with the skills and experience necessary to support their new consumer and technology requirements. Instead of Best Buy, try company's like Apple, Cisco, GE, IBM and Verizon.
-Paula, MPowered Group