Utilities must step up or customers will step down

Early stakeholder involvement, transparency touted by readers

Phil Carson | Jan 19, 2012

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For our regular Friday feature, we'll dip into the mailbag to give the floor to readers' reactions to the past week of columns.

As the week began, I channeled conservative polemicist Ann Coulter with "How To Talk To a Customer, If You Have To," implying of course that utilities might find such contact distasteful—but alas I did not receive the vitriol Coulter typically attracts. (At least, that vitriol was not shared with me.) Instead we received three forum comments that implied I might be on to something.

I finished that column on a high note with the following:

"For utilities that don't understand that they are proposing generational changes in customer engagement and behavior and that affecting that change will require a new way of doing business, let the bill stuffer be your epitaph."

The first to comment that Monday morning was John Cooper, president of Ecomergence and co-author, with Andres Carvallo, of The Advanced Smart Grid: Edge Power Driving Sustainability. (I've edited all comments for clarity and length.)

"Utilities must do a much better job of sharing their smart grid projects, from strategic planning at the outset that incorporates community leaders and consumer use cases, to addressing security, privacy and health concerns, to showcasing the rationale for a comprehensive, system modernization effort, of which smart meters are but one component," Cooper wrote.

"There remains too much ignorance in this 'debate,' which should have much less controversy and much broader participation," Cooper continued. "Simply put, way too many utilities continue to operate like monopolies, as if their constituencies did not have alternatives to grid power or a say in the future of their regional electricity economy. Smart utility managers will act as regional smart energy subject matter experts, educating their constituencies (consumers, community leaders, local governments, regulators, etc.) on the complex task of modernizing our fundamental energy infrastructure, stressing a balanced view of both benefits and costs, and putting risks in the appropriate context. Silence only leaves room for miscreants to step in to fill the gap, as we have seen since Bakersfield in 2009."

Consulting engineer and faithful contributor Jack Ellis put the challenge to utilities—and their stakeholders—more bluntly. 

"In fact, the utility monopoly is being threatened, even if the public hasn't yet caught on," Ellis wrote. "If solar PV prices continue to fall and someone comes up with a cheap enough battery, consumers will begin leaving the grid in droves. In California, Governor Brown's push for 12,000 megawatts of rooftop solar is likely to help things along.

"Of course, utilities aren't wholly responsible for their consumer-unfriendly attitude," Ellis added. "So-called consumer advocates who insist on making electricity a social service and an entitlement, and regulators who abet the consumer advocates and insist on one-size-fits-all solutions bear some responsibility as well."

Ellis' remark about consumer advocates is a point well-taken and, while I've often agreed with those advocates' tactical points, the time is nigh for said advocates to sit down with the latest research that reveals realistic measures for protecting vulnerable segments of the population. That said, the theme here and elsewhere in my work is that utilities, in general, need to work on transparency and early stakeholder involvement to engender the largely missing ingredient of trust. I digress.

Patty Durand, executive director of the Smart Grid Consumer Collaborative (SGCC), which has collected and synthesized much of that consumer-oriented research (see "2011 State of the Consumer Report"), offered insights that may make customer engagement not only less painful but even salutary.

"Speaking of how to talk to customers, SGCC recently completed wave 2 of our series on understanding consumer attitudes and thinking about the smart grid," Durand wrote. "Seven benefits were tested to determine which ones consumers feel are most/least important. All seven benefits are considered important by at least 80 percent of consumers. Continued low awareness is a cause for concern: only 50 percent of people in our survey have heard of the term 'smart grid' or 'smart meter.'

"On balance, increased knowledge, even when both positive and negative messages are presented, appears to strengthen support for smart grid development," Durand continued. "Based on data from the first wave of Consumer Pulse research, the SGCC segmentation framework divides consumers into five distinct segments that are defined holistically in terms of attitudes, values, behaviors, motivations, lifestyles, technology adoption, etc.—as they relate to smart grid issues. The segments react very differently to smart grid concepts, products and services. Levels of interest in energy management range from 'yes, definitely' to 'no, thank you.'

"Our bottom line is that consumer education should proceed quickly, and the message should vary by broad categories of consumer values, also known as consumer segmentation. Wave 2 research findings will be available on our website Monday, January 23rd."

A sincere thanks to all our forum contributors this week for their insights and, not incidentally, for establishing that I'm hardly a voice in the wilderness on the issues involving power and society.

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

 

 

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