Having observed utility/commission interactions and worked with utilities in their customer contact centers, it is quite clear that for many regulated utilities, their focus is on satisfying their local commission, and then their ratepayers.  This means that IOUs spend their time building business cases and justifications to win approval from commissions, not interacting with ratepayers and learning about them.   IOUs have become experts in managing their relationships with commissions.    

Commissions are there to protect the public and ensure reasonable and fair rates are set for regulated services like electricity.   IOUs have not had to concern themselves with really knowing much about their ratepayers, since there has been little need to know more than basic categorization such as residential, commercial business, or industrial operation, and the amount of electricity used each billing cycle.   

These practices worked well in the past, but the advent of disruptive Smart Grid technologies and the importance placed on increasing consumer participation puts new pressures on utilities and commissions to learn more about ratepayers.  We often talk about the need to educate ratepayers about the short and long term benefits of Smart Grid initiatives, but what about the need to educate utilities and commissions about ratepayers?  Any transition to a real consumer-oriented Smart Grid will require utilities to revamp their marketing and communications departments to create more touchpoints with their ratepayer bases and build more knowledge about them.  The questions that IOUs and regulatory commissions should be asking themselves are: How differently would we communicate and market to our ratepayers if they become consumers with choices about how much electricity they buy, sell, store, and use?   What do we need to know about their issues and aspirations around energy use to effectively communicate with them?

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!