Customers need energy data first

Researcher says focus on in-home devices is misplaced

Phil Carson | Apr 22, 2012


I tuned into a webinar last month in which Roger Levy of Levy Associates presented regulators with a talk on customer access to their energy use data and how information feedback does—and does not—engage them.

Officially, the talk was titled "Customer Data Access—Valuing Feedback: A Strategy for Customer Engagement," and it was delivered to the National Association of Regulatory Utility Commissioners (NARUC). Levy works in conjunction with Chuck Goldman, a staff scientist in the Lawrence Berkeley National Laboratory's Smart Grid Technical Advisory Project, for NARUC. 

Essentially, Levy cited several "myths" and paired them with actual facts established through careful research. The myths, he said, have become conventional wisdom through repetition, not because they are backed by scientific evidence. He also offered insights into fundamental issues regarding how to achieve long-term behavior change.

Part of the NARUC webinar also focused on recent research findings by Karen Herter, of Herter Energy Research Solutions, from a project she conducted at the Sacramento Municipal Utilities District that bolstered Levy's key points.

Both Levy and Herter raised such fundamental issues around the role of electricity customers, the provision of energy use data to them and the desired behavioral changes that utilities and regulators seek that I followed up with each of them separately to explore their findings.

As readers must realize, this is a particularly critical area, one that deserves attention and clarity. Levy's and Herter's findings and conclusions are not prescriptive, but they inform the discussion that's currently at or near the top of the industry's agenda, which is how do you engage customers and accomplish smart grid expectations? So their points unfold here in a conversational manner, befitting the context. But I'd urge anyone with questions to contact them directly for key details, arguments and data.

First, Levy's short list of myth vs. fact:
Myth: In-home displays are essential. Fact: In-home displays are hardware, which is not essential. Information is essential.  .
Myth: The use of in-home displays delivers 5 percent to 15 percent energy savings. Fact: Most savings estimates are anecdotal, the research is inconsistent, and focused on short-term behavior.
Myth: Real-time data is more effective than day-old data. Fact: Studies provide minimal evidence for this.
Myth: Rate, bill design and frequency influence the impacts of in-home displays. Fact: Studies typically ignore these variables.

Levy also made points about the role of electricity customers, the provision of energy use data to them and the desired behavioral changes that utilities and regulators seek.

"We emphasized to NARUC that there's been too much focus on in-home displays," Levy told me. "The studies in support of in-home displays are at best flawed and, at worst, they're looking at the wrong things." 

In home displays support short-term behavior change, focus on near real-time meter data, and price estimates which are not necessarily compatible with customer appliance and infrastructure investment decisions, Levy told me. Behavior change without automation has been shown to be unreliable and difficult to sustain. Permanent changes in energy use and usage patterns will require investments in more efficient appliances and renewables, which is a long-term proposition. These types of investment will require historical information, pricing, cost and  other data that provides customers with clear tradeoffs.  In-home displays only provide a small part of this information package.   

"Right now, utilities aren't focused on the customer value function," Levy said. "In fact, they haven't given it a whole lot of thought. What you see in most of the smart grid implementations is that there's been very little change to rates and pricing, and how information is presented to customers.  Most changes to the information customers receive has been dictated by political pressure. So, there's a lot of work to be done."

Step back and consider the bigger picture, Levy suggested.

The customer is important to making the smart grid work because it's the customer that has to make major energy usage changes for demand response, peak load shaving and other load shaping activities. And customers are the party in the equation who can make broader use of distributed generation and renewables, he said.  Changing customer behavior and investments is a long-term proposition that requires a long-term plan, not necessarily in-home displays.

"One of the key weaknesses of smart grid at the customer level is that there's been too much emphasis on hardware," Levy said. "The focus should be on the energy use feedback and the communication of that information. There's been substantial focus on in-home displays and that's hardware. But there's been a lack of focus on the information communicated to the customer. In-home displays can facilitate that, but 'in-home display' can mean any kind of device, not necessarily a dedicated device."

The focus on the customer must integrate and include all customer touch points: the rate, how rates translate into pricing, billing, appliance rebates and incentives, access to information and education to inform customers on what actions they can take and how changes will affect them.

The power industry needs a better understanding of the customer value function: What's in it for me? How will pending changes impact my bill? How does what I do affect the community I live in? Some customers' objectives will include "community," small or large.

The information and other measures to encourage customer behavioral changes need to be persistent and long-term, Levy said. In-home displays typically focus on short-term changes that - unless supported through other measures - are difficult to sustain.

Okay folks, those are the myths/facts and challenges confronting the power industry as it attempts to implement a smarter grid that involves the much-ballyhooed two-way interaction with the customer. Tomorrow, we continue the discussion with Levy for more color around these issues and some suggested solutions.

Phil Carson
Intelligent Utility Daily

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Hooray for Roger!

It's about time that somebody spoke up to power about what those of us fighting in the trenches have known for many years: the value of real-time feedback is overrated, and unactionable for most people. I've been having this argument at conferences for more than a dozen years, and continue to have it, even on Energy Central, with people who try to spin inconclusive or minimal results into big wins. A two percent reduction in electricity usage (cited elsewhere on Energy Central), although material to some people, is not a big win; 35% is. That's the level that Rocky Mountain Institute was able to help squeeze out of the Empire State Building's energy use, and less than I have achieved over the past three years in my own home. It wasn't real-time feedback that yielded these gains, it was data collection coupled to rigorous analysis and prioritization of which actions would yield the fastest payback.

Those who have read my periodic rantings on this site can probably sense my frustration about the sorry state of information provided to customers by their energy providers. People really don't care about kilowatt hours and electricity usage profiles, they care about money and the environment. They need clear metrics for how their behavioral changes will translate into dollars, or societal benefits. They want to know which things to spend money on and how long before they pay for themselves. That's the reason I started my present company, to provide better, cheaper, and easier-to-use tools for energy service providers to answer those questions for their customers.

Greg Tinfow
CEO, Energy Informatics LLC

p.s. Although I haven't seen Roger in many years, I can attest that he knows whereof he speaks. He and I worked together on one of the first web-based energy self-audit applications more than 15 years ago, back when dial-up Internet access was the norm and 33.6 kilobaud modems were state-of-the-art.

thanks for the comments

Looks like Roger Levy's basic points resonate with some of our audience.

I'd say that utilities (and vendors) would do well to avoid "in-home displays" unless they're smart thermostats that can receive a price signal and react to peak events. Otherwise, information on pricing and events should go to the existing communication channels such as smart phones, texts, voice mail and email.

If utilities try to ram in-home displays down their customers' throats, there'll be **** to pay.

Regards, Phil Carson

Good points

I totally agree with the main points of this article.

A few years back I bought a Kill-a-Watt meter for around $25, which plugs between your appliance and the wall outlet and gives you accumulated energy usage info. By putting it on various appliances in my home, I quickly learned how much my PC, DVRs, and stereo amp were adding to my electric usage. After that experiment which identified the power hogs, there was little to be gained from continual monitoring.

For continual monitoring, you have to ask how much the hardware will cost versus the gain. A smart grid adapter box which plugs between the appliance and the wall might cost $50 to $100, at least initially. Smart grid will eventually be built into new appliances, but again it will probably cost $25 or so. What can one of these devices do for you? Well, it can monitor power usage. But really, once you know what the power hogs are, does continual monitoring help? Smart grid might also tell you when power is cheap. But do you really need that function on every device? How many devices can be set automatically to go off when power is cheap? Do you really want to load up your dishwasher or washer and hope they will go off by the next morning? Most people have to do these things within a few hours, and they already know nighttime power is cheaper than daytime power. A few devices such as refrigerators have to run all the time anyway. Cars are increasingly hooked up to the internet via cellphone or maybe even the home's Wifi when parked in the garage. They can easily be told to start charging by a "tweet" from the power company, which will probably want control of the charging process to stage the charging of all the electric cars in an area.

I live in Boulder, CO, and that town's experience with Xcel's smart grid has shown everyone that the promised nirvana of "smart grid" is decades away. But anybody can get most of the benefits of smart grid today, for a lot less.

       Milton Scritsmier

       Boulder, CO

We are a hardware industry

The focus on in-home displays and hardware is a reflection of the industry's history.  We are good with poles, wires, and gadgets. It is a very tangible industry.  The softer human side is a very different dynamic.  Becoming more customer centered and more customer sensitive takes new thinking, skills, and systems.  It is a difficult transition, particularly in a monopoly market where change is slow.

Customer Engagement

I hope the decision-makers who determine what gets done and how it ultimately gets paid for are reading this article and thinking hard about what it says.  We don't need to have utilities invest billions of dollars in devices that get installed and gather dust. 

I also agree with Mr. Levy that there's absolutely no reason for customers to be limited in any way by the type of device they rely upon for usage and price information.  Equipment vendors may like the idea of selling directly to utilities but consumers will be much more likely to engage if they can use devices of their choosing.  Utilities are not hardware vendors and hardware is not the one-size-fits-all proposition they and their regulators are used to dealing with.  In this case, consumer choice is necessary, it's feasible, and it's paramount.

Jack Ellis, Tahoe City, CA