January 5, 2018
Changing utility business model, Consumer-centric programs
You hear it from nearly all utility executives today: The energy industry is pivoting away from the outdated transactional model toward a more customer-centric future.
This transformational shift has manifested itself in many ways across the country. Utilities are restructuring their organizations, implementing new consumer-facing software and improving methods of engaging with their local communities – all with the end goal of better meeting consumers’ evolving needs and wants.
But utilities are not the only ones driving this change. Many nonprofit organizations – including consumer advocates – and technology companies are playing major roles in developing the more consumer-friendly future of the utility industry.
Here are three very different examples of successful consumer engagement and education in the smart grid era:
A Community-Based Education Strategy in Illinois
Illinois is no stranger to energy innovation. In 2011, the state passed its Energy Infrastructure Modernization Act, which authorized a $3.2 billion investment in smart grid infrastructure by ComEd and Ameren Illinois. However, in addition to the funds earmarked for infrastructure, the bill also mandated the creation of $50 million in education funding to grow awareness of the smart grid and its benefits to Illinois consumers.
Out of this fund, the Illinois Science & Energy Innovation Foundation (ISEIF) was born. ISEIF is a nonprofit, grantmaking organization that essentially serves as a third-party education arm for Illinois’ two main utilities. Through two annual grant cycles totaling $5 million, the organization has developed a wide-ranging community of grantees that are deeply embedded in their respective communities.
Unlike traditional utility education efforts, in the ISEIF model, the utility isn’t directly in the picture. The community engagement partners work in their self-defined context and utilize their own self-generated engagement plan, and there’s no utility branding involved. This model gives the messaging much more credibility within the communities than if it had come from directly from a utility.
The results so far validate ISEIF’s unique model. Through their community partners, ISEIF has held over 5,000 community outreach events, which have reached nearly two million individuals. Of the $20 million in funds that have been distributed so far, nearly two-thirds have been allocated to low-income and senior populations, and through the Smart Grid for Schools program, ISEIF has been educating the next generation on the benefits of advanced energy technology. So far, over 35,000 schoolchildren and their parents have been educated through this program.
With the significant infrastructure investments that are being made in grid modernization, it’s important that consumer education is a part of the investment. ISEIF’s model provides a blueprint for effectively educating consumers on the benefits they can receive through smart grid-enabled programs through existing community channels.
Building a Next-Generation Online Platform
In addition to funding ISEIF's education efforts, Chicago-based ComEd has been a leader in utility innovation and has stated that it’s goal is to be the “utility of the future”. As part of this forward-thinking strategy, ComEd worked with Simple Energy to develop an online marketplace stocked with energy-efficient and smart home products.
Consumers today are increasingly referring to their experiences with tech companies like Amazon and Apple as benchmarks for their interactions with other companies, like their electric utilities. Consumers – especially millennials – want personalization, easy-to-use digital solutions and information at their fingertips. These are some of the reasons that drove ComEd to build its Marketplace.
Another is that available rebates for products like LED light bulbs or advanced power strips weren't available in one location and weren't necessarily easy for customers to redeem. With ComEd Marketplace, consumers can instantly apply most rebates (some up to 50-percent off) at check-out, a win-win for ComEd and its customers.
Debuting in the fall of 2016, the ComEd Marketplace has already seen a lot of activity from its customer base. In the first year alone, over 600,000 customers visited the Marketplace and over $4 million in rebates have been issued to customers. Going forward, ComEd aims to expand the Marketplace beyond a transactional e-commerce website by incorporating additional educational resources. The goal for ComEd is that customers see the website as an “energy advocate” that can help with all of their energy-related needs, questions and concerns – not just a place to buy a discounted smart thermostat.
Reaching SMB Customers with Savings
The small or medium-sized business customer is sometimes referred to in the industry as the “least engaged customer”. Unlike residential, commercial or industrial customers, these smaller businesses don’t always have programs that are targeted to their needs or internal resources to really focus on their energy usage and costs. However, in recent years, San Francisco-based Pacific Gas & Electric (PG&E) has developed a comprehensive outreach strategy, dubbed the Business Best Rate Campaign, to help these customers effortlessly save on their monthly bills.
Realizing that many of their customers in this segment don’t have the energy knowledge or resources required to reduce their monthly bills, PG&E decided on a proactive approach. While PG&E has had an online rate tool for SMB customers for several years, it wasn’t really being used regularly by these customers. So, PG&E conducted a rate analysis of these customers’ accounts and reached out first with phone calls and in-person visits followed by emails and letters that clearly stated the possible savings.
In the first year of the Business Best Rate Campaign, PG&E’s SMB customers realized over $1 million in savings on their bills. Based on this initial success, PG&E expanded the program in 2017, making it even easier for SMB customers to switch rate plans and save. Customers can now respond to the rate change emails with just one click or select a “Remind Me Later” button if they need more time to decide. Hoping to expand the message of the campaign, PG&E is also investing in online ads, e-newsletters and other new channels to reach a wider range of customers.
Three Strategies, One Focus: The Consumer
The maturation of the smart grid era is creating numerous opportunities for utilities and other stakeholders to further engage with energy consumers. While many of these are driven by technology, creative outreach via traditional methods (i.e., telephone and in-person visits) is also more important today than ever before. With the scope of new programs and services available today to help customers save money and have better experiences with their utilities, customer engagement and education are the keys for all stakeholders to effectively realize the promised benefits of the smart grid.
These customer engagement success stories were originally covered in 2017 as case studies. To learn more, download the full case studies here. A webinar recording featuring these three programs is also available here.
About the President
Smart Energy Consumer Collaborative President & CEO
I am the President & CEO of the Smart Energy Consumer Collaborative. Before coming to SECC, I worked for Georgia Tech, where I focused on smart grid research projects and helped to submit almost $10 million in grants to ARPA-E and DOE. Before that, I served as the Executive Director for the Georgia Chapter of the Sierra Club where I focused on energy policy and programs. I also served for two years on the Board of the Smart Grid Society for the Technology Association of Georgia.