At the heart of every utility is the customer. Not the regulator, not the government, not even necessarily the shareholder – for without a contented customer, shareholder value is hard to sustain. And yet with so much change on the agenda at most utility companies it is easy to lose sight of the impact on the customer.
We all know that it is easier to keep a customer than to acquire a new one – this holds even for utilities, where to some extent infrastructure hampers real customer choice. But with governments and regulators promoting open competition between utility suppliers, providing a satisfying customer experience has to be high on the agenda or customers will be exercising their rights to take supply from elsewhere.
Smart grid developments have been much discussed in the last three to five years but how many of those developments are actually improving life for the customer? Let’s leave aside the smart grid activities that are literally smartening the grid itself and largely benefit the utility – tools like next generation SCADA systems for optimised network management and smart reclosers that reduce maintenance call outs – and focus on where most utilities have dipped their toes in the smart grid story – metering.
Best use of resources
Florida Power & Light (FP&L) announced completion of their Energy Smart Florida initiative to modernize the grid and install 4.5 million smart meters across its service territory. An online portal enables customers to track their usage hour by hour to support changes in behaviour that saves money. FP&L themselves gain by having greater control of the grid and can deliver greater service reliability and improve outage management. Clear benefits to the customer, even if a little indirect.
However, FP&L do provide direct customer testimonials on their website to demonstrate how their customers are engaged with and benefitting from smart grid initiatives. Quoting the experience of ordinary citizens brings the benefit into sharper focus. Quotes like:
- “We’ve been able to be more proactive on our energy usage”
- “Energy efficiency not only saves me money, it’s also good for the environment”
- “In today’s economy, every dollar is important”
These cover a range of motivations and let other customers relate to the potential impact of a smart meter on their own circumstances.
Faster outage restoration
San Diego Gas & Electric (SDG&E) has 1.4 million smart meters installed in domestic and commercial properties. These work in cooperation with wireless sensors installed across the network. The sensors automatically detect outages and other problems on the electric grid and fault detectors send alarms if a problem occurs anywhere along the power lines. Operations staff can quickly send crews to that location based on the automatic wireless signals sent by these devices. This enables the utility to respond to power outages and restore electricity to customers faster than ever before. Again clear customer benefits, but the benefit to the utility is perhaps greater.
Erin Collier, communications manager at SDG&E said, “We are committed to providing user-friendly ways to help customers take control of their energy use. Using the newly installed meters as a base, we are developing programmes that create a two-way relationship with the customer to provide them with personalised information about energy use. Connecting to Home Area Network (HAN) devices means customers can see real-time energy use of individual appliances and electronics. SDG&E was also one of the first utilities to implement the Green Button initiative, giving our customers access to a growing range of tools to help them prove their energy efficiency.”
SDG&E Smart Meter (Photo by SDG&E)
The ‘Green Button’ initiative in the U.S. is supported by central government and makes energy use data available in a common format. At SDG&E customers can download up to 13 months of their personal electricity data, which can then be analysed to help make choices about when and how they run appliances. Customers can also view their day to day account, encouraging households and businesses to monitor temperature gauges or run appliances on eco programmes, reducing peak demand for the utility and saving money for the customer.
SDG&E Home Area Network (HAN) Energy Aware Device
Comparative trial
In the UK, a three year trial compared different approaches to improving energy efficiency – including using smart meters. This study found success increased when customers actively engaged with improved data provided by smart meters and this is borne out by live rollouts. At the simplest level, no longer being disturbed by meter readers calling to the home and the assurance that utility bills would no longer have to be estimated is benefit enough. But real savings start to be seen when feedback on consumption is readily available, in short – easy to understand reports. To be actionable, feedback must be reliable and timely – which depends on the back office IT systems the utility chooses.
The UK government’s Department for Energy and Climate Change (DECC) is driving many smart grid initiates, and recognises the need to engage with energy consumers. Supporting this, the department is restructuring to introduce a new directorate focused on ensuring consumers and households are considered on an equal footing with international policy on energy development and climate change, and bringing new generation capacity on stream. In a research exercise sponsored by DECC, a group of volunteers from the early implementation programmes were monitored to see if and how the smart meters impacted their day to day lives. Care was taken that the volunteers covered a range of household types, including consumers considered to be vulnerable – for example the elderly, those with physical or mental health issues, low income households and so on. Volunteers had a smart meter installed with an IHD – In-Home Display – unit so they had visibility of the impact of the smart meter. The study recorded how the volunteers reacted to the programme and if it encouraged them to change their behaviour regarding energy use. Not surprisingly there were a range of responses but the greater the visibility of energy use – for example keeping the IHD switched on and in a place visible to members of the household – the greater the change in behaviour. This underlines the need to provide usable feedback to the consumer, as well as education on the use of supporting tools.
Across Europe there is as much variation in the level of adoption by different countries as there is between states in the USA. Italy was one of the first countries worldwide to roll out smart meters. France and the UK are actively engaged in their implementation programmes. These are largely driven – or certainly encouraged – by central policies of the European Union that promote energy efficiency and backed by national governments that are both keen to enhance their green credentials and to reduce reliance on energy imports.
In France, smart meters will be rolled out to approximately 35 million subscribers starting with pilot projects handling 300,000 meters in the Lyon and Tours areas. This ensures both urban and rural networks are trialled and the experience of the trials will, it is hoped, lead to a smooth introduction country-wide. Consumers will benefit from remote meter reading, automatic fault detection and repair, and two-way meters supporting local and micro generation. By contrast, in Germany the installation of smart meters has stalled in mid-2013 following an analyst report that determined the cost of installing the meters would outweigh the benefits to individual consumers. While this is being investigated, there will be a considerable slowdown in the rollout programme in a country that previously championed smart meters.
The customer is at the heart
While ploughing resources into smart grid technologies, utilities must remember who is ultimately footing the bill. The customer has to be engaged and their concerns handled sensitively. Several groups, notably in the U.S., with pockets in the UK, Australia, and elsewhere, insist that smart meters are a health hazard. In response many American utilities offer ‘opt-out’ clauses for consumers to retain analogue meters. These utilities will have to keep records of where analogue meters remain and where smart meters are installed but are not active, and cope with maintaining provision for manual meter reading and alternative billing systems. An additional expense, maybe, but one that is necessary to keep the customer on side.
Smart metering was and is supposed to provide the customer with greater choice including the ability to monitor energy use remotely and to choose how to manage their consumption according to the attractiveness of the tariff. Improving the customer experience will encourage buy-in to the investment in new technologies across the network and soften the impact of the inevitable disruptions that come with that – from service disruption to simply more road works. Remember, a happy customer pays the bill.
About the Author
Christine Easterfield is Principal Consultant for Cambashi. Previously her experience has been in geospatial asset management for the utility industry, assessing market needs and opportunities, managing customer requirements, liaising with development teams and running global product introduction programmes.
Christine has over 20 years’ experience in the software business, with roles in programming, training, consultancy and, latterly, product marketing management. During this time she has worked for a range of companies from multi-nationals to small start-ups, resulting in an understanding of how different sized organisations operate, grow and become successful. Christine has a Bachelors degree in Computational Sciences and a Masters degree in English Literature. She can be reached at Christine.Easterfield@Cambashi.com.
