How utilities can make any customer care about efficiency

How utilities can make any customer care about efficiency

CC license by The Nick Page/Flickr

Most people don’t realize it, but their relationship with electricity is odd.

Ed White, vice president of customer and business strategy for National Grid US, summed it up in a recent interview by relating a vignette from a colleague with a 13-year-old son. The boy ran from the house one day shouting, “We don’t have Internet. We don’t have Internet!” It turns out there was a power outage. But it wasn’t the darkening room or warming refrigerator that caught the teen’s attention. He’d been denied entry to cyberspace.

The story illustrates the strange world of the electric utility. They sell a product that everyone relies on more and more, but hardly notices. Consumers are far more aware of their relationship with the information-delivering Internet than the electron-delivering power grid.

This has to change if the U.S. is to achieve its energy efficiency goals. Saving energy requires that customers pay attention. Most of us would rather not. It’s going to take innovation and risk-taking on the part of the utility industry to engage the consumer.

That’s the message coming from National Grid, which is taking the conversation to the national stage. The utility, which serves 7 million electric and gas customers in the Northeast states, is promoting the idea of greater “energy productivity,” a kind of next generation energy efficiency. The term refers to the amount of economic activity we can wring out of each unit of energy.

At the heart of the campaign is a recent report, Energy 2030, by a national commission co-chaired by Tom King, president of National Grid’s US operation, and U.S. Senator Mark Warner (D-Va). If we double our energy productivity by 2030, we can save an average household $1,000 per year, add more than 1 million jobs and cut carbon dioxide emissions by one-third, according to the report.

National Grid is walking like it’s talking. The company now invests more money in energy efficiency than any other U.S. utility (except perhaps California’s PG&E, depending on how you crunch the numbers).

National Grid’s initiatives span a wide range, from the conventional free energy audit to the newer electric vehicle charging station. A medical campus in Buffalo, N.Y., is home to one its most closely watched endeavors, a project that may signal the new kind of relationship consumers and utilities could form in an age of energy innovation.

It started when the 120-acre Buffalo Niagara Medical Campus found itself undergoing rapid growth and realized it needed to think about energy and transportation in new ways. So it sought customized help from the utility -- not something typically done.

“This is a new dynamic for a utility,” White said. “We used to just take orders and provide your service. Or you would come to us with your energy efficiency needs, and we would tell you how our programs applied to what you are asking for. What we are doing now is working with the campus to really help shape the programs of the future.”

The campus and utility formed a partnership and created a five-year plan that centers on energy cost savings, local economic growth, alternative energy and transportation, learning, and energy for the health sector. The partnership estimates it will achieve $2.9 million to $12.1 million in annual savings by 2016.

Among other things, the partners have installed smart technology in a turn-of-the-century home to demonstrate that energy efficiency and beauty can co-exist. They also plan to install smart grid and renewable energy, as well as more far-reaching innovations, some springing from research on the campus: miniature energy storage, nanomaterial and advanced materials.

It’s not surprising that National Grid has undertaken this project, or is trying to lead the industry. The utility has a history of pursuing energy efficiency that goes back a couple of decades to when it was still called conservation and ignored in most states.

It is too soon to know if the utility industry will embrace energy productivity beyond those already in the hot spots for efficiency: the Northeast and West Coast.

For it to work, utilities will have to rethink their old-school economic model, which was to sell as much electricity as possible. And regulators may have to let utilities take some chances without facing financial penalty.

White says the new world is “about the efficiency of the investment.”

“It is not just selling less, but it is about selling in the right places. We are not trying to use as much power as possible. Those days are gone,” he said. “No one wants to see waste.”

If National Grid and Energy 2030 succeed, electricity may no longer be an invisible product, but one that the consumer takes the time to manage or at least notice. Who knows, the next crop of 13-year-olds may emerge from a darkened house shouting, “The energy orb is down! The energy orb is down!”

This article originally appeared at RealEnergyWriters.com.

Image credit: CC license by The Nick Page/Flickr