How a Utility Brings Smiles to Consumers

How a Utility Brings Smiles to Consumers

At a recent SAP user group meeting for utilities customers, there was a lot of dialogue around engaging consumers to help utilities meet their energy needs in the future. The most immediate means of shrinking the gap between supply and demand in the short term will occur by focusing on energy efficiency and conservation -- or, as Amory Lovins nicknamed these efforts, negawatts.

In states like California, the legislature has even passed a law that requires utilities to reduce their load by 1 percent per year through energy efficiency programs in order to ensure their consumers will have electricity without interruption. But even with the passage of laws, getting consumers to change their habits can be difficult.

As strange as it may sound, one presenter at the "Sustainability for the New Energy Era" conference noted how in the last 18 months their utility "launched a new revolution by becoming customer-centric." This was not a clueless voice in the wilderness, but rather a function of a highly regulated industry that didn't require a commitment to customer intimacy. Customer service has historically been more about reacting to outages than getting closer to consumers.

Helping to lead the way, though, are utility executives like Paul Lau, Assistant General Manager of Customer, Distribution & Technology for the Sacramento Municipal Utility District (affectionately referred to as SMUD). Lau provided important lessons learned for other utilities rolling out smart meters and other customer-facing initiatives during his talk at the conference and later over lunch.

Noting that technology rollouts have not gone that smoothly at other utilities, Lau led an effort at SMUD where they sought a high degree of interaction with their customers. It began a program of "40 days and 40 nights" with customer focus groups. What SMUD found out was that its customers wanted more transparency, more information, and more control of their energy. According to Lau, "Residential customers don't like demand response and they don't care about the grid. They just want to know what we can do for them."

Lau also noted that SMUD customers want to interact face-to-face through regularly scheduled neighborhood and business meetings. This was very much driven by SMUD's goal of maintaining a customer satisfaction rating of greater than 95%. Lau cited a number of examples as to how they work to keep this rating high during a period of technological transformation.

With skeptical residential consumers, SMUD offered to keep its old meters side-by-side with new ones so it could compare the results. SMUD also tested whether it could have an impact on consumer energy use after smart meters were installed. One limited trial program compared usage between neighbors, where bigger energy users got a humorous "frowning face" on their bills. But customers were not amused and the program was quickly dropped.

The utility industry is going through a transformative stage (see my earlier article, "Disruptive Energy: Getting Ready for the New Utility") and it will change the way in which utilities and their consumers view each other. There is a great opportunity for these groups to work together, but it will take a new understanding of their consumers for the utilities to get it right and take advantage of this changing dynamic.

John Davies is Vice President of GreenBiz Intelligence.