Consumer Communications Key to Smart Grid Implementation
The age of the smart grid is dawning, with millions of smart meters already installed across the country. But some utilities have encountered opposition to smart-meter pilot programs, and the question of how to communicate benefits to consumers complicates the picture.
Fortunately, two-way customer communication and comprehensive customer service – trademarks of competitive electricity markets – have been identified as key to unlocking the full potential of smart grid technology for consumers. “Energy providers must do a better job communicating with their customers,” said Patricia Hoffman, Assistant Secretary of the U.S. Department of Energy. “And notice I say ‘communicating with’ and not ‘communicating to’ – communication must go both ways.”
Innovative service plan offerings, including time-of-use and dynamic pricing, thrive in competitive markets. Customers in restructured states have the option to choose such plans, which show the true cost of electricity as it matches demand throughout the day. “Generally, I think where you have retail competition, you’re more likely to have smart grid plans,” said Ashley Brown, executive director of the Harvard Electricity Policy Group, in an October 11 Electric Power Daily article.
In comparison, most customers of monopoly-protected utilities have little access to these innovations and are limited in their ability to capitalize on smart meters. If a customer only sees a bill pricing electricity on a flat rate and after the electricity is already consumed, they cannot connect the dots between higher costs and conservation, and therefore have little incentive to cut energy use.
Attentive customer service – another feature of competitive electricity markets – has also been identified as an important factor to customer acceptance of smart meters. In competitive markets, power suppliers compete against one another to provide the best possible service at the lowest cost in order to attract and retail customers. When competitive suppliers compete against incumbent utilities, all market participants are incentivized to innovate in customer communications.
Washington, D.C.’s successful PowerCentsDC and several programs in Texas are good examples of how this translates to smart-meter technology. These programs feature multiple ways for consumers to interact with their electricity supplier via text message, email, phone calls and monthly reports. Texas also launched the interactive Smart Meter Texas website to help translate smart meter benefits, and reports savings of 10 percent off electric bills for an average of $200 per month.
American consumers’ perceptions of the smart grid are largely unshaped, and ripe for education. A recent study reported 79 percent of Americans know little or nothing about the smart grid, but when the technology is explained to them, 75 percent feel the smart grid should be a priority.
Competition’s benefits represent the best potential to temper potential consumer opposition to smart grid technology by empowering them to gain greater control over their energy consumption and costs. It’s no surprise seven of the top ten states leading smart grid implementation participate in competitive markets.
Through competitive electricity markets, customers can take advantage of the full potential of smart meters by reacting to accurate price signals – saving money and building support in the process.
