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Accentuate the Positive

A practical guide to explaining the value of the smart grid.

Fortnightly Magazine - August 2013

It’s a common theme – skeptical stakeholders and reporters will say, “OK, a smart grid is good for the utility, and what’s good for the utility is supposed to be good for the consumer. But exactly what’s in it for the consumer?” 

Explaining the value proposition of a smarter electricity system to consumers, stakeholders, and regulators remains the last mile in terms of driving acceptance and adoption of smarter technology. Why? Because it’s not easy to do for most organizations, and because our nation’s energy literacy isn’t where it should be. And without widespread time-of-use or other smart grid programs deployed in every service territory in the United States, it’s difficult to understand how new pricing programs and technology investments are tied to direct consumer benefits. 

A customer might rightly ask, “Why should I accept expensive smart grid technology investments for benefits that I don’t see and that only help the utility?” That is, if they have even heard the term “smart grid.”

Even in the wake of storms such as Sandy, where outage restoration dominated headlines, consumers have yet to understand the whole value of an advanced electricity infrastructure. Understandably, regulators take a conservative approach to approving new smart grid programs and technology investments since they have two priority goals: maintaining the lowest cost and the highest reliability for customers. 

While consumers value reliability and low cost, research shows there are other benefits of a smarter electricity system that consumers do value and would be willing to pay for, including enhanced efficiency and a cleaner environment. 1

But we know consumers don’t understand electric utilities’ primary mandates because they don’t understand electricity. How does an organization engage and educate consumers and stakeholders about the benefits of a smarter system? How can a regulatory system be designed to enable success with smart grid programs?

Many U.S. utilities have successfully taken on this challenge. And they’ve said many of the same things: show consumers how to save money and how to manage their budget; do it early and often; show them the short-term benefits; and be sure to communicate about the long-term benefits as they occur. Anticipate and address questions from a skeptical public. Also, help consumers realize they’re in control, and show them how a smarter grid is addressing their environmental concerns. After all, consumers have several motivations for caring about a smarter grid. 

The fact is, once consumers understand the benefits associated with a smarter system, they overwhelmingly support it. 2

Getting Real with Customers

Research has shown consumer awareness and understanding of smart grid is low; fewer than 50 percent of Americans have heard of the smart grid, and only 25 percent of those who have heard the term know what it means.