Photo Credit: Susan NYC, Flickr
If there’s one thing regulators don’t like, it’s segmented offerings of essential services. But that’s exactly what consumer-facing smart grid applications can, and should, offer. It does not have to mean leaving behind the most vulnerable -- instead, segmentation can empower those who want to have greater control over their usage and cost.
“The utility needs to move from a one-size-fits-all model to different, targeted programs and different offerings,” said Adrian Tuck, CEO of Tendril, a home energy management software company.
No doubt this is tricky business, especially for utilities that have traditionally never reached into the home.
“It’s the first time we’ve ever contacted the customer,” Ron Bilodeau, project manager for demand response at NV Energy, said about the utility's smart grid pilot that involved installing smart thermostats and other energy hardware in people’s homes. “I was in the cable TV industry for years,” he said, “and we didn’t do it right.” Anyone who has ever seen the movie Cable Guy knows what he's talking about. To avoid a repeat of being the next “cable guy,” NV Energy is meticulous about the process and is constantly improving it. “We have to make sure the customer experience is a seamless experience.”
Providing Choices Won’t Scare People
Tendril’s Tuck makes an important point about customer segmentation: this happens all the time.
In other areas of our lives, we make decisions every day about the choices presented to us, from the kind of milk we buy (organic, regular, whole, skim, yak, almond, soy -- you get the point) to what sort of phone plan works best for our life. “Consumers want choice,” Tuck said during GridWeek. “They want to feel that even if they can’t change their energy supply, they can have choice.”
There is an idea that too many offerings will scare people off. And it will scare some people off -- they'll stick with what they've always had. But the majority of people will hear about the plan their neighbor just signed up for and wonder why they're still stuck on an electricity plan from the Dark Ages. And when offering choices, give those choices cool names (or at least understandable ones) that resonate with people's lives.
You Can’t Win Them All
The way to segment customers and then offer programs based on different lifestyles is first to unlock the data. Many utilities are doing that now. They’re doing pilots and focus groups. Then it’s time to get creative, said Tim Appleton, head of smart grid business development at Intel. “If you can unlock the data, the imagination opens up in terms of the rich services you provide,” he said. “You don’t have to win every customer.”
For some people, they don’t want to think about changing, and maybe they want the same plan they’ve always had, said Kurt Yeager, executive director at the Galvin Electricity Institute. Your grandmother probably didn’t own a cell phone 15 years ago. And she might have even kept her rotary phone far longer than anyone else did. You don’t have to get everyone on board right away, and eventually Grandma might even want to get on board if it means she has more control over her energy bill.
Different Messages, Same Result
One of Tendril’s utility clients wanted to get customers signed up for demand response programs by giving away smart thermostats that people could use to participate. Tendril marketed the exact same product to specific groups using three distinct messages: environmental stewardship, cool new technology, and saving money. The program was oversubscribed before lunchtime on the first day it was available.
Start Small
Regulators and utilities alike are just really dipping their toes into how to provide more choice while still delivering essential service. It doesn’t have to be all or nothing. Reliant Energy, which operates in the deregulated state of Texas, has a lot of amazing programs going on in the consumer space, but its most popular program is also its cheapest and easiest to implement.
“SMS text alerts have been phenomenal,” Craig Tinder, senior manager of smart energy at Reliant Energy, said during GridWeek. “And it’s probably the simplest program we have put out.” It lets people know via a phone text message if their bill goes above a preset amount. It offers control, costs the customer nothing, and starts to engage people in what else the utility might offer down the road. “We foresee a world with lots of automation and smart appliances, but that will take a lot of time,” said Tinder. “We are setting the groundwork for value-added services.”