What does this have to do with smart meters?  Everything.  NBC didn’t just broadcast the Olympics, they promoted the schedule of events to build interest and excitement about these games.   Newspapers and web sites also identified the dates and times and provided those “human interest” angles in stories.  If I had to work to get the information about the dates and times the US/Canada games were playing, well, I probably would have missed two great games.  But NBC knew that to get its’ message to the widest possible audience, it had to repeat the game schedule (multiple times), tell me where to find more information (multiple times), and continue to advertise the game right up to the moment the puck hit the ice.

Those of us in the Smart Grid business spend a considerable amount of time thinking, talking, and prognosticating about utilities, new technologies, the changing relationship that consumers will have with electricity.  We understand the benefits, the motivators, and the complex, phased deployments of smart meters.  However, the vast majority of the American population doesn’t know, and doesn’t care about anything to do with the Smart Grid.  There are too many other things going on in their lives to pay attention to it. 

Their attention will shift to smart meters only when they get that utility bill insert or letter that tells them they are going to get one soon.  At that point in time, utilities have the opportunity to really educate their residential ratepayers about the benefits that smart meters will deliver.  Some utilities deliver a reasonable amount of education even before this interaction opportunity.  However, many do not, to the collective detriment of future Smart Grid rollouts. 

Now imagine if utilities acted more like NBC competing for consumer attention.  The messages have to be repeated multiple times using different communication channels and social media to get to the demographic groups that are least likely to pay attention to Smart Grid topics.  To educate ratepayers about smart meters, rather than just sending a billing insert, they would reach out to communities and deliver educational talks about smart meters and their ties to energy efficiency and conservation.   Utilities would create tools that offer interactive discussion of smart meters, the new information that consumers can obtain from them, and some examples of how other ratepayers have learned to manage their energy usage to lower their bills.  Add a plan to educate utility resources that interact with the public, and you have the start of a Consumer Enlightenment Model in action. 

Utilities need to understand that the mission to keep the lights on is not enough these days.  The safety and reliability mission must also include education about the consumer benefits of smart meters and other Smart Grid technologies.   The focus on the consumer is a real game-changer, and it is critical to the success of Smart Grid rollouts.

The Metering, Billing/MDM America conference begins next week in San Diego.  The latest technologies will be here, but I’ll be seeking interesting discussions about how utilities and their vendors will communicate the value of smart meters to consumers.

Customer service orientation.  When was the last time your utility asked you to complete a customer survey rating their service?  There was a time when telecommunications companies didn’t forge much of a relationship with customers, but competition has changed that situation.  There is nothing that prevents utilities from developing more outreach to ratepayers to obtain feedback.  Telecom companies learned to do it through advisory boards, customer satisfaction metrics, and communication plans that deliver news in multitude of channels to effectively push information.  Today’s ratepayer may be tomorrow’s customer with a selection of vendors who buy and sell electricity.  Smart utilities should develop Consumer Enlightenment Models now in anticipation of a future with more retail choices.   

Mobility.  Once upon a time, phones were tethered to physical locations. Today, phones roam around, and telecom companies produce billing records that identify date, time, place, and length of calls as well as text messages, internet use, and manage price schedules based on time, geography, and other factors.  The advent of electric vehicles (EVs) and plug-in hybrid electric vehicles (PHEVs) mean that electric meters will be roaming around in large numbers.  Utilities can take a few lessons from telecom companies about billing systems that track roaming charges and required changes to internal operations to support mobile meters. 

Technology adoption at the network edge.   The telecom industry and the electric utility industry share a common and ingrained fear – the fear of unproven technologies.  There’s a sound basis for this fear – given the vital services provided by electric utilities and the phone companies, it would be unthinkable to introduce a new product or application that could bring down a network delivering either electricity or dial tone.  It would also be a career-killer.  Therefore, any new technology undergoes rigorous testing in internal labs, and this testing is duplicated in each utility because each utility network is unique.  This testing process means that technologies are adopted at a slower pace than is commonly seen in some industries, and discourages innovation. 

The “edge” of today’s electrical grid is where the meter hangs on the wall.  The Smart Grid pushes the edge into residences and businesses, and this is the area of great innovation potential.  Smart meters, whether new or retrofitted electromechanicals, are similar to smart phones – there are many applications that can be enabled by them.  This means opportunities to identify external test labs and develop certification programs that do not endorse any edge products but do provide assurances that they won’t “break” the network either.   Utilities should study how the mobile telecom carriers accommodate innovations at the edge of their networks – smart phone applications – and take some notes about setting up simulation programs and testing environments. 

There are other similarities between telecom and electric utilities as well, but these listed here, plus the deeply embedded sense of mission and monopoly skills noted in last week’s blog make the case that forward-thinking utilities should learn from history instead of re-living it.

And why should they?  It’s the responsibility of utilities, and maybe the Department of Energy (DOE) as well to educate consumers better about what Smart Grid technologies can do today and in the future.  The DOE has developed a series of booklets that explain the benefits of the Smart Grid to various groups, including consumers, but clearly there need to be much more aggressive and coordinated campaigns to enlighten consumers.

Does Joe Ratepayer understand that smart meters enrolled in utility programs will reduce or eliminate the need to build more power plants to address peak electricity load requirements?  Does Jane Ratepayer understand that new power plant construction translates into higher electricity bills to recover costs?   Could Joe or Jane intuitively understand how a smart meter saves them money and saves the environment too?    

Those of us in the business understand that smart meters will save consumers money on their utility bills as the grid evolves to residential Time of Use (TOU) electricity rates and Home Energy Management Systems (HEMS) are deployed.  (Note:  The Smart Grid Dictionary defines TOU as “A rate structure with different unit prices for electricity use in a 24-hour timeframe, generally to encourage use during periods of lower demand.  This price applies to a time-of-use price, rate, or tariff and is a dynamic price scheme typically used with non-dispatchable demand response programs.  It is also known as time-of-day pricing.”) 

Analogies can help explain the Smart Grid rollout process and the role that smart meters play.  For instance, let’s say that I am building a new house with the kitchen of my dreams.  I won’t get the benefits of that kitchen’s output until foundations to fixtures are installed. 

The smart meter is like my house’s foundation.  There’s no home without a foundation.  There’s no Smart Grid without smart meters.  In building my new home, I understand that there is a start and a finish to the project.  I have a blueprint to visualize the goal.  I have a project plan to understand the process of achieving that goal.

It is vital for utilities to connect the dots between current smart meter rollout activities and long term Smart Grid objectives.   Ratepayers and consumer advocacy groups need equivalent blueprints and project plans to understand the long-term objectives in terms of what it means to their bills and the environment.   Outreach via a Consumer Enlightenment Model is absolutely necessary to build and sustain public support of Smart Grid initiatives.        

I’ll be attending the ITExpo’s Smart Grid Summit and the Grid ComForum conference to explore these concerns – see you there! 

I reviewed community websites and posts about PG&E’s smart meters and have a few New Year’s resolutions to suggest to PG&E and other utilities planning smart meter rollouts:

- Learn from PG&E’s sad tale – utilities must develop a thorough communication plan as part of a Consumer Enlightenment Model that explains the benefits of smart meters to ratepayers.  There is a tremendous amount of genuine confusion about the beneficial impacts of smart meters for consumers.  Many consumers have the impression that smart meters are great for utilities, but just an additional expense for ratepayers.   Utilities must communicate the “What’s in it for me?” messages tailored for residential consumers.   

- Part of the Consumer Enlightenment Model’s communications plan must include a statement that an old electromechanical meter can slow down over time, possibly resulting in under-billing in the past.  Therefore, when a smart meter is installed, it may be the first accurate reading of electricity consumption in many years.  One irate consumer reported that his electricity bill for a family of four jumped from $20 to $80 per month – therefore the smart meter was inaccurate.  I’d say the old meter was inaccurate since he’s not supplying any of his own electricity from solar, and $5 of electricity usage per person per month is awfully low for PG&E rates. 

- Provide communications training to their field resources and any subcontractors installing meters.  That training must cover the talking points about the benefits of a smart meter from the ratepayer’s perspective.   Telling consumers that smart meters will eliminate meter readers jobs is an accurate but insensitive statement to make during a recession with high unemployment.   

- Examine customer service scripts to deal with customer calls about increased bills.   A review of all call flows in customer care centers is in order to ensure that callers receive a smooth handoff from one department to another and strive to achieve “first call” satisfaction.

That old Ben Franklin saying about “for want of a nail, a shoe was lost” seems appropriate every time this litigation story comes up.  Lacking upfront, convenient, and accurate information about smart meters or any other visible and disruptive technology, ratepayers will seize upon misinformation, substitute opinion for fact, and develop attitudes (about utilities and smart meters) that will be difficult and expensive to change, slow down rollout plans and inflict damage on other Smart Grid initiatives.

Are you interested in learning more about the Smart Grid?  There are two opportunities coming up in early 2010.  The ITExpo will host its first Smart Grid Summit from January 20-22 in Miami, Florida.   The Grid ComForum Conference and Exhibition is scheduled for February 2-3 in Santa Clara, California.   See the events sidebar for more information.

I study HEMS solutions and always ask the HEMS manufacturers about the support model.  There is remarkable unanimity in their assertions that the utilities will take the first support calls – for HEMS web portal software and for IHDs.  The HEMS providers are confident that their solutions are so easy to use that support is quantified as a nominal increase in support calls.  Some of them go to great pains to develop friendly user interfaces.  But I have marketed, sold, and deployed many software applications in my career, and what is “a nominal increase in support calls” to a vendor may be dramatic increases in call volumes to utility customer contact centers.    

Regardless of the success of the introduction of a HEMS solution and associated IHDs, if the support model is inadequate, the end result will be frustrated ratepayers, lagging participation in crucial Demand Response and other energy conservation and energy efficiency programs, and more utility time and expense to fix these problems. 

Utilities that offer HEMS solutions to their customers need to include software and hardware support of the HEMS solution and IHDs into their Consumer Enlightenment Model.  Bring in consulting professionals with experience in contact centers, software support, and emerging technology introductions who are knowledgeable about Demand Response and Energy Efficiency programs.  Work with them to develop a fully integrated Consumer Enlightenment Model that aligns with utility objectives to reduce overall energy use during peak and non-peak times and manages not only the introduction, but the ongoing support of visible, disruptive, and extremely important HEMS solutions and their IHDs. 

Feds Step Up Enforcement of Appliance Reporting Standards

Energy efficiency was proclaimed to be “sexy” by President Obama just last week, and the days of lax enforcement of energy efficiency standards are thankfully at an end.  The Department of Energy (DOE) recently announced that January 8, 2010, is the deadline for manufacturers of certain residential products to submit accurate certification reports and compliance statements regarding energy efficiency.  A 30 day grace period lets the slackers correct their non-compliance without penalty. 

After January 8th, the DOE will begin enforcing these reporting requirements, including leveling civil penalties or fines for non-compliance. This covers reporting and certification requirements – not the actual energy efficiency standards, which are already subject to scrutiny by DOE.  The requirements include a certification report for each basic appliance model covered by the energy standards, along with a signed compliance statement.  You can access the DOE press release and fact sheet, and for even more info, here is the Web site for DOE’s Appliances and Commercial Equipment Standards Program.   To all the appliance manufacturers that have been playing by the rules all along, kudos to you.  To those manufacturers who treated the rules cavalierly, the playing field just got leveled.

A consumer enlightenment model informs utility customers about the HEMS solution and the beneficial impacts of the HEMS solution to consumers, to utility bills and rates, to the environment, and to energy security.  A consumer enlightenment model delivers education along with aspirational messages that generate interest and excitement for the HEMS solution and the evolving Smart Grid.  It also places the utility customer front and center as an active participant in magnifying the positive impacts through increased energy efficiency behaviors as well as enrollment in utility programs to reduce, shift, or shape demand.

Here are four critical actions that utilities must take in successfully introducing HEMS solutions to their residential customers.

1.  Recognize the long-term strategic value of the HEMS solution to the utility.  The best HEMS solutions have adhesive qualities that make customers more likely to “stick” with an energy services provider.  Why is that important?  If deregulation is coming to your area, the local incumbent utility may not be the only choice of energy services providers.  That makes the utility’s selection of the right HEMS solution so critically important to not only initial rollout success but to long-term market share objectives.  And what is the right HEMS solution?  Stay tuned to next week’s blog for that answer.
2. Recognize the strategic nature of the HEMS rollout to the residential end-user.  This is not a time to discount the value of communications and messaging, as is often the case in engineering-oriented organizations like utilities.  This is not a business-as-usual project – this is a business-as-enlightened project.  The HEMS rollout needs support from the highest corporate levels and must include all the departments that interact with residential customers, so all field resources will deliver consistent messages as well as traditional customer contact points. 
3. Define clear objectives for the consumer enlightenment model.  Make sure these objectives – whether they are based on HEMS adoption rate, DR program enrollment, or energy reductions – align with the overall corporate utility strategy.  If the priority is to keep rates as low as possible, then residential consumer participation in DR programs and reductions in energy use will help by eliminating the need to build expensive peaker plants or avoid additional power purchases. 
4. Develop and deploy a HEMS communications strategy and project plan that identifies objectives, segmentation, messaging, and media.   Engage the internal departmental stakeholders in the process to ensure that their objectives and tactics align with the overall HEMS rollout strategy.  Plan for careful orchestration of messages and communication tactics, internal training about objectives and messages, and adjustments in staffing for customer care centers to handle increased customer communications.

Many utilities lack the in-house resources with sufficient time or experience to build the customer enlightenment model or manage the HEMS rollout.  Use consulting experts to assist in these strategic projects with in-depth experience in telecommunications (similar regulatory structures and technology disruptions), successful introductions of innovative software applications, knowledge of the Smart Grid sector, and demonstrated creativity in using traditional and social media channels.  

We’ve already seen that it is easy for consumers to build the wrong impressions of smart meters.  Let’s make sure that introductions of HEMS solutions – the most disruptive and visible technology that residential customers will see – are done right. 

*Virtual Service Aggregators or VSAs are defined in the Smart Grid Dictionary as a business model concept that proposes that an organization dispatch and control renewable sources of energy plus energy storage devices, and manage demand response and smart EV charging services.