Public Utilities Reports

PUR Guide 2012 Fully Updated Version

Available NOW!
PUR Guide

This comprehensive self-study certification course is designed to teach the novice or pro everything they need to understand and succeed in every phase of the public utilities business.

Order Now

Maximizing Customer Benefits

Performance measurement and action steps for smart grid investments.

Fortnightly Magazine - January 2012

over time, though observers are cautioned that improvements in SAIDI (resulting from increased sectionalization, for example) can come at the expense of MAIFI performance. “Customer minutes out” is another performance metric that warrants consideration for this reason. Of course normalization for weather will still be an important component of reliability measurements.

Beyond statistics, however, it’s difficult for individual customers to perceive even fairly significant improvements in reliability. The issue is simply one of scale; a 99.95 percent reliability rating translates to only 4.4 hours of customer outage a year. Even a 20 percent improvement on 4.4 hours of outage amounts to less than an hour’s improvement annually. This fact, combined with the infrequent nature of outages, makes reliability improvements extremely difficult for customers to perceive.

Customer Service Enhancements: Customer service enhancements, generally made possible by AMI and two-way meter communications, can be difficult to measure. Quantifying the percentage of eligible customers that access a new capability is a reasonable metric for some enhancements, such as in the case of detailed energy usage information being made available via secure web page. However performance on other potential customer service enhancements isn’t so easily measured. Consider for example, a proactive outage information service. Such a service would combine smart grid capabilities with today’s communications technologies to text or e-mail information on outages to affected customers. Simple descriptions of new customer service enhancements implemented as part of smart grid deployments might have to suffice as a yes-or-no performance measure in some instances, with emerging best practices serving as useful benchmarks as to what is feasible and valuable. Another service enhancement that a subset of customers would appreciate is prepayment; AMI provides capabilities that facilitate the operation of pay-as-you-go programs.

Communicating Benefits

Smart grid benefits can be significant in the aggregate but insufficiently large for individual customers to perceive. Even customer service enhancements, which one might consider to be readily perceptible, are known only to customers that have accessed them or been exposed to them. And even these customers might not relate the enhancements to smart grid investments. Accordingly, documentation and communication of benefits to customers should be a conspicuous component of post-deployment optimization plans and is critical to confirming smart grid merits and value to customers.

One way to think about smart grid benefit communications: If a benefit isn’t communicated, it’s as if the benefit had never been created from a customer’s perspective. Even the U.S. government understands this concept; what driver hasn’t seen a road construction project adorned with “this project funded by the American Reinvestment and Recovery Act ” signs?

This isn’t to suggest that communications shouldn’t be conspicuous before smart grid deployment as well. In fact, providing stakeholders with realistic expectations about smart grid value and capabilities before investments are made is perhaps more critical than post-deployment communications. Stakeholder engagement can help utilities prioritize smart grid investments by understanding the value constituencies place on various capabilities and benefits.

Benefits and Cost Recovery

Three distinct approaches to smart grid investment cost recovery appear to be emerging: special-purpose riders; special-purpose riders with limits based