Oncor gets smart

Learning the difference between customers and consumers

Published In: Intelligent Utility Magazine July/August 2010

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DALLAS-BASED ONCOR LEARNED A VALUABLE LESSON earlier this year: it has ''customers'' not ''consumers.''

A snowstorm hammered the Dallas-Fort Worth area in February, dropping 17 inches, the second-largest snowfall ever recorded in the region. It was also the fifth-coldest winter on record. As the company responsible for ensuring power gets to its 3 million residential and business customers, Oncor Electric Delivery, a unit of Energy Future Holdings Corp., pressed its workers into action.

Bad weather is anticipated in Texas, said Oncor spokesperson Carol Peters, but not extremely cold weather for days on end and a freak snowstorm on Valentine's Day.

Storm of another sort
Alas, a public relations storm was also brewing on the horizon. Electric bills arrived and Oncor customers were not impressed, some reporting an increase in their monthly average from $400 to $700 to nearly $1,800.

The culprit? Many pointed to the smart meters Oncor has been rolling out since 2008. The new meters read electricity usage in 15-minute intervals, giving the user the ability to monitor real-time use, in addition to measuring a home or business's carbon footprint. Customers can also log on to the Smart Meter Texas Web site, set up by a group of electric transmission and distribution service providers, to get reports on their electricity usage.

But the cry rang out: ''The meters are inaccurate!''

Not so, replied Oncor.

Perfect storm at play
Peters said three factors were responsible for the high bills. The bitter storm and sustained frigid temperatures had a greater impact on people using electric heat as
opposed to those using natural gas to heat their homes. ''Anyone with electric heat is really in a bad way,'' she said, adding a regulator told her that relying on electric heat ''is like heating your home with a hair dryer.''

The third factor at play, she said, was the fact that many customers had not searched for the best rate from retail electricity providers (REPs). Many were paying 12 cents per kilowatt hour (kWh), while if they had shopped around, they could have locked in at a rate of 9 cents per kWh.

And the reality is that if homeowners see a big spike in their electricity bill, they automatically blame the utility company because it is visible - and in Oncor's case, its workers were in the streets fixing downed lines in the thunderstorms - even though the company has nothing to do with an REP's rates. ''We get the blame,'' Peters concurred.

Dealing with perception
However, Oncor quickly realized that perception is reality, in the customer's eyes. So, although the utility had been proactive in its public relations campaign surrounding its installation of smart meters in central and north Texas, it also established, in response to the backlash from the storm, a rapid response team. The team received more than 4,000 calls, and established that about 3,000 of those customers had not yet even received a smart meter.

It's understandable, Peters noted: Customers turn on a switch and don't care where the power comes from or who is responsible for each leg of the journey from power generation to the light bulb. ''It's just not something you think about,'' she said.

But when customers get angry, they seek answers. Oncor realized ''we do touch customers,'' Peters said. ''We learned some lessons about ourselves during the smart meter response and the snowstorm. Customers want to hear from us. They want responses.''

There was a growing realization within Oncor that ''we can't do our job if we don't have some engagement with the customer,'' Peters said. Indeed, one small but perhaps meaningful change: ''Instead of consumers, call them customers.''

Increasing customer engagement
Oncor called the media to watch side-by-side tests between digital smart meters and old analog meters. Company representatives visited homes and discussed shopping for electricity rates.

The company also found that roughly 1,800 smart meters were not installed correctly, which it reported to the Public Utility Commission of Texas (PUCT). The PUCT launched its own review in early March, hiring Navigant Consulting to test smart meters that Oncor and other power companies installed. Peters said all of the 1,400 Oncor smart meters tested were on the mark. (On April 1, the PUCT said Navigant should also look into usage and customer complaints.)

''We believe our meters are accurate, but what's most important is customers believe that they are accurate,'' Peters said.

Not all customers agree. One lawsuit was launched in late March against the utility. At the time the legal action was launched, Chris Schein, Oncor's director of communications, told Greentech Media it was ''full of misstatements and untruths. It's clear that it's a lot of hyperbole designed to get media attention rather than address the facts that are out there.''

Even in Waco, where Oncor installed its 1 millionth smart meter on June 2, the company still faced skepticism. The Waco Tribune-Herald reported that while some homeowners were looking forward to closely monitoring their electrical usage, other neighbors were reluctant to have the smart meters installed because they ''had heard'' high electricity bills soon follow. It is this perception that Peters said Oncor is working to overcome.

Interfacing with consumers
Prior to entering a community, Oncor will advertise what it is doing, leave messages on door handles and roll out its ''Smart Texas mobile experience,'' an 18-wheeler that transforms into what Peters calls ''a rolling smart house.'' It expands to 1,000 square feet, complete with kitchen, laundry facilities, a living room and all the state-of-the-art appliances and electronics imaginable.

''There's lots of communication that goes on around the smart meter installation,'' Peters said.

Part of the communication process is convincing customers that the $2.19 monthly rate the PUCT allows Oncor to charge to cover the costs of installing 3 million smart meters by 2012 is not prohibitive. Although Oncor can apply the fee for 11 years, the total cost to a homeowner or business of $26.28 a year, nearly $290, those dollars can be recouped, said Peters, by replacing old technology with new energy-saving items such as LED lights.

Peters noted they would have even more dealings with the public as the company processes, protects and analyzes the mountains of data the smart meters will generate. Meanwhile, the utility is building a transmission line that requires 800 miles of right of way. That is a whole mess of landowners with whom they'll communicate.

Now the Texas heat is rising, air conditioners are humming and Oncor is bracing for more questions. They anticipate more customers receiving high, unforeseen, electricity bills. They anticipate scrutiny.

''We are not going to get everything right, but I think we are getting a lot of it right,'' said Peters

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