(August 2011) Economic consultant Michael Rosenzweig challenges Constantine Gonatas’s proposal for ensuring FERC’s demand response rulemaking achieves its objectives. Also, Juliet Shavit...
Bringing Customers On Board
Realizing the benefits of smart meters.
behavior and action.
• Education: Utilities must educate customers so they can make more informed decisions based on how the amount and timing of their consumption affects prices. But not every utility truly understands how important it is to develop and execute a communications program that effectively brings this information home to customers and makes their options clear. To this end, any AMI project—already one of the largest and most important undertakings a utility can embark upon—also must include a program-management function specifically focused on the customer experience.
Change management principles and programs often are overlooked or assumed to be less important than technical issues and process re-engineering efforts, but they deserve just as much concentrated leadership and vision.
• Overcoming aversion to change : Although change, flexibility, and acceptance often are regarded as necessary contributors to the advancement of new ideas and technologies, people do not inherently accept change. They often fight it. One of the most prevalent and important challenges to be addressed is the customer experience itself. Move-ins and move-outs are perhaps the most intense customer interactions with the utility (and its fee structure), but for most customers, it is the routine monthly bill cycle that reflects consumption, commodity, and distribution charges—and attracts their interest as cost-conscious consumers.
When AMI comes to town, the customer experience must address basic elements of communication that explain why these changes are needed. Customers need to understand that they are part of both the problem and the solution. How do I take action? What do I need to do to lower my immediate and longer-term costs? What decisions should I be making to help lower my overall costs? An informed consumer is often the best consumer.
Customers who understand how their actions affect anticipated outcomes are in the best position to change and improve the overall situation. But they have concerns beyond the pocketbook that must be addressed as well. Some early focus groups have uncovered concerns about the utility’s potential capability to peer into customers’ lives, Big Brother-style. Other concerns surround the prospect of giving up control—such as when AMI enables the utility to reduce consumption by turning off equipment, lowering heating settings, or raising air-conditioning settings.
The answer to these concerns lies in other behaviors with which customers are better acquainted. Most people have become comfortable registering for automated bill-pay services through banking institutions to prevent late payments and their associated fees, installing spyware software to run in the background to protect from intrusive and damaging hacking actions, or setting limits for purchases or sales of equity positions with online trading accounts to limit financial exposure. In effect, it is an accepted value proposition that certain technologies and control features can limit exposure to risk, reduce costs, and improve service. The anticipated benefits of AMI and its related technologies aren’t all that different from these other scenarios. Even more important, customers who understand them can better understand how their actions ultimately affect their pocketbooks.
In this respect, the situation requires not only a smart consumer but also a smart utility—one