Consumer survey: door remains open to utilities

SGCC study shows education increases favorability

Phil Carson | Oct 22, 2012

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As far as consumer awareness of, or value attributed to, a smarter grid is concerned, the good news and the bad news of the past year can be summed up in the same sentence: no change. 

That's good news if you were concerned about the seemingly high level of noise, confusion and disinformation—and fears, legitimate or otherwise—that accompanied media mention of smart meters. 

That's bad news if your utility, like the Smart Grid Consumer Collaborative (SGCC), which released a new consumer attitude study today, considers it your mission to educate consumers on why your smart grid projects (or rate increases, for that matter) should be approved.

The hard truth: consumer awareness is low and shows no change over a year's time.

"Disappointed" summed up the reaction to these results by Patty Durand, executive director of the SGCC, whose mission is to educate consumers, provide the means for utilities to do the same and certainly hopes to document changes when the proverbial needle moves. 

Durand told me yesterday she understands the mission will take time, but I sensed that she and I agreed on the fact that it won't move without considerable effort by all stakeholders. (She called attention, again, to the SGCC's resources on customer segmentation, education and messaging available to utilities.)  

You can find the new study posted on the SGCC's website and I suggest that you satisfy yourself as to the rigor of the telephone survey of nearly 1,100 Americans from August to September and tease out a few nuances that might be of use to you and your utility. (Respondents had to be 18 years of age, head of household and the sample represented national demographics.)  

For me, apart from the obvious upshots of little change over the past year (the first such SGCC survey was taken in August 2011), the new survey added some significant detail around the potential opportunity that remains for raising consumer awareness and how that opportunity might be exploited. 

First, the survey found that educating consumers improves their favorability towards their utility and its smart grid efforts. 

Second, broadband access is widespread across the nation, as are in-home wireless networks, offering not only a channel for education but also the infrastructure for actual utility programs.

Third, something like half of all homes have social media accounts, which could be leveraged to make energy use monitoring, energy program participation and other engagement activities fun and cool, particularly for the Internet-savvy generation to come. 

"That's the message from research," Durand told me. "Education increases favorability. Don't take that lightly." 

Though some utilities apparently want to deploy smart metering and related systems with as little fanfare as possible, avoiding customer education and, presumably, controversy, other utilities have reaped the benefits of customer education, she said. 

The other upshot of the foregoing study findings: Technologically, Durand pointed out, households are ready for smart grid-related apps and "a lot of tech players are waiting to access those markets." 

"People are connected," Durand said. "And people are interested." 

One finding that really popped for me: the two most widely supported benefits (respondents said they'd pay a modest premium for them) are increased reliability and decreased environmental impacts. Specifically, when a smarter grid's benefit is described as decreasing the number and duration of outages, consumers will pay. When a smarter grid's benefit is described as enabling more renewable energy sources and, thus, decreasing greenhouse gas emissions, respondents also are willing to pony up. 

This directly supports my mantra that reasonable steps at reasonable cost to reduce harmful emissions and protect air and water quality have long been mainstream American values. 

In Durand's view, the emphasis on traditional reliability may well be a result of the number of well-publicized and, indeed, widespread and prolonged outages of the past year. The fact that those particular outages were the result of severe, even extreme weather tentatively linked to anthropogenic climate change may have led to support for the second, environmentally linked smart grid benefit. Regardless of the stock anyone puts in those connections, mainstream environmental values are supported by other facts, Durand said. 

"More than 30 states have renewable energy portfolio standards," she said. "The governors of those states didn't just wake up one day and say, `Let's do this.' People at the grassroots demanded them. Our research supports the fact that people want a mix of energy sources, including renewables. There's a general desire for a diversity of sources and for energy independence and people equate those things with renewable energy." 

In terms of rates and pricing, the new study confirmed the high consumer interest in critical peak rebates, or CPR. 

For stakeholders—utilities, regulators, consumer advocates and others—who are hesitating to move to dynamic pricing, CPR represents "the shallow end of the pool" where there's no risk to consumers, Durand pointed out. 

The study reiterated the value of customer segmentation and messaging that prioritizes the concerns of each segment. The SGCC study out today reviewed the segments that it has identified, which roughly correspond to those established by myriad others, and provided a statement that captures their outlook: 

  • Traditionals: "Frankly, we're not at all sure Smart Grid is needed." 
  • Concerned Greens: "Smart grid and smart meters will help protect the environment."
  • Young America: "We wish someone would tell us how Smart Grid can help us save money and help the environment."
  • Easy Street: "We can afford to pay for electricity. The cost isn't that much, on our budget."
  • DIY & Save: "Energy efficiency and Smart Grid programs sound appealing, because they would help us save money." 

 

Durand added that because no single smart grid theme or message shows significantly more traction than others, messaging that combines a few benefits may resonate with consumers. 

"It's not useful to limit yourself to one theme," Durand said. "We often encounter utilities that suggest customers will `save money,' otherwise they won't care. Our research has shown that multiple benefits attract interest and will gain more traction."  

Many of these points and others documented in the new SGCC study are worthy of further, indeed perennial, discussion and I'd welcome all interested parties to constructively weigh in on the pros and cons. 

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

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Comments

Targeted marketing is the answer

I just returned from a high school reunion where I had many opportunities to describe what sort of work I do (smart grid customer engagement research, education, and marketing). Out of 150 former classmates, only two had the faintest idea what smart grid was so I am not surprised at the findings of the SGCC's latest study.

As the study supports, when one can approach a person based on their set of priorities, most respond positively to the benefits and capabilities offered by grid modernization including more fair pricing policies.  The way that I interpret the survey findings is that marketing messages will only be effective if they are targeted to the right segments.  For example, if you believe climate change is a hoax, hearing green messages turns you off and you might not stick around to learn more about how you can save money.

Only a few utilities give customers the opportunity to self-select programs and information paths on their websites.  The benefit of a targeted approach (used effectively in other industries) is so one can leave out the irrelevant programs, tips, or options and emphasize language and tone that will be most meaningful and helpful to that audience segment. 

TV ads and billboards are fine for general brand awareness, though customers living in monopoly service territories often object to paying for that luxury.

The best educational experiences are interactive; be they online, on the phone, or face to face.  Two-way social networking participation by knowledgeable employees, proactive customer service and field calls by well-trained personnel, and well-designed workshops, meetings, and community summits are more effective at reassuring fears, explaining the benefits of smart grid and dynamic pricing, and inspiring energy champions to reach out to their peers.

If more utilties were to invest in these very cost-effective activities, I suspect we would see a marked difference in the number of consumers who know about and value smart grid improvements.

Judith Schwartz
To the Point

 

Hi, Judith! Wendy here...

Looks like you are still working away toward your goals.  So am I.  I still have my analog meter, and have been participating in a series of workshops with the PUCN and NV Energy.  The PUCN will issue a decision regarding whether, and how much, NV Energy customers will be required to opt-out of the AMI we never asked for.  We are truly captive customers; NV Energy's ratepayers have always been viewed as the "safety net" for all new projects they (and the NV Legislature, and RE stakeholders) start up with the help of taxpayer subsidies.

I also participate regularly, as a member of the public, in meetings of Gov. Sandoval's NV State Office of Energy (NSOE) New Energy Industry Task Force (NEITF).  Somehow, our Republican Governor is under the impression that NV should be in the business of selling RE to the State of CA.  The NEITF is assigned the job of "creating" the business case for this.  So far, they have been unable to show that one exists.  Big surprise.  But, they continue to pursue one.  Although CA would love to dump their RE on NV, I have seen no evidence they want to buy any from us.

I have learned a great deal about the true costs of solar and wind energy--to ratepayers and taxpayers in dollars--and to the environment.  It takes a huge amount of real estate, both private and public, destroys vegetation, wildlife habitat, and wildlife.  There is very little "bang for the buck" in other words.

I hope you are well; I think of you occasionally, and also your friend.

Here is a book I would like to recommend:

Power Hungry, by Robert Bryce

It puts things like energy density and power density into perspective, through simple mathematical calculations.  I am a chemist, but someone without a scientific background can easily understand the concepts and perform the calculations.  It is a fun book, and I would recommend it to anyone.  Robert Bryce writes for the Manhattan Institute, too.  You may be familiar with his articles.

I just wanted to say hello when I happened across your name.  Yes, I subscribe to this, and several other newsletters.  Phil Carson thinks I just like to complain, but this is not true.  I have practical, logical, and philosophical objections to energy and climate policy--as well as what role government should play in (and how much control it should exercise over) energy industries and markets.

Take care,  Wendy

P.S.  Nobody I went to school with would understand anything about these issues, so don't feel bad :-)  Most of the people I used to hang out with in high school, are probably still smoking weed, "looking" for a job  haha.