Customer buy-in: Key to successful smart utility rollouts

Smart networks, sensors, IoT and Big Data are key phrases in the definition of a smart city.
Published: Tue 08 Nov 2016

While these technological elements are critical to laying the foundation for smart city development, the role of the citizens who are ultimately the customers, end-users and beneficiaries of these technologies, cannot be stressed enough. [Engerati-In Focus Smart & Sustainable Cities ]

With the introduction of any new technology, the catalyst for adoption is always the enduser. The utility sector is a prime example where engagement with customers or the 'end-user’ is critical to gaining understanding and acceptance of new technology; eg. smart meters and/or services that will have a direct impact on them.

In its 2016 Strategic Directions: Smart City/Smart Utility report, EPC and consulting firm Black & Veatch also state that, with utility service providers increasingly joining the smart systems movement, it has become clear that continued progress greatly depends upon customer buy-in, either through rate cases or the customers’ own installation of smart devices at the home. The firm notes that creative education efforts can place customers in a partnership role with utilities and can help users understand the smart grid’s complexity.

According to Fred Ellermeier, managing director for Black & Veatch’s Smart Integrated Infrastructure service line, “It is critical to convey a deeper understanding of the systems that make next-generation devices a more efficient option. It will help place value on their implementation.” Ellermeier adds that equally important to developing agile network technologies is customer education.

Customer education

The report notes that smart utility rollouts have been plagued by skepticism at the customer level, largely because they are misunderstood.

Executive consultant Kevin Cornish, said: “The past year has seen utilities struggle to convince residents of the required cost of smart grid updates and the steps customers can take at home – often with the help of utility-provided devices – to enable their own smarter choices.”

Furthermore, the report found that nearly 58% of utilities, cities and organisations had not announced a smart utility or smart city initiative. Perceptions were that smart initiatives were not applicable to organisational missions. Moreover, a lack of education and information about ‘smart’ improvements were among the factors contributing to this perception.

Cornish added: “Many utilities understand the benefits of smart grid investments but are struggling with how to communicate their vision. In some cases, they may simply prefer to let larger institutions make the first moves and demonstrate their effectiveness.”

While skeptism remains a challenge, the firm reassures that there evidence is mounting that automation and other smart device deployments are reaping significant cost savings and efficiencies.

“Utilities have a unique opportunity to revisit their strategic missions. They can recommit to new, efficient ways of delivering services. A plan that communicates how the utility and its customer base are invested in each other will go far toward incentivising residents to act as partners,” said Cornish.

Fort Collins – a ‘bellwether’ example

Fort Collins Utilities in Colorado, US, received a smart grid investment grant in 2009 to kick-start its advanced metering project (AMI) and lay the groundwork for its Peak Partners Demand Response programme.

Peak Partners has become the foundation for an upcoming programme that will focus on areas including managing electric vehicle charging, grid responsive water heaters, and the dispatching of curtailment events by a third party. Building upon their success, Fort Collins Utilities has used the wealth of information collected to help refine the Peak Partners programme and improve customer engagement.

The programme encourages customers to start using a programmable thermostat and, for customers with an electric water heater, to also use a two-way device, allowing their unit to be cycled for load control.

Fort Collins Utilities found that customer engagement persisted even after the initial few months of introducing the programme to its customers. The digital thermostat portal saw more than 100,000 sessions in just over a year. That’s about one session per customer per week. Since most of the participants did not have a connected thermostat prior to enrolling in the programme, Peak Partners opened a new engagement opportunity between Fort Collins Utilities and their customers. The utility also started a programme with the local library to check out devices to residents in order to test consumer response to in-home displays. The goal of this programme is to provide new services to customers and increase their knowledge about energy use.

Fort Collins Utilities leadership recognised that a strong focus on efficiency would require building internal support and understanding. A 2008 initiative, Utilities for the 21st Century (City of Fort Collins 2009), addressed the internal cultural shift required to fully align utility staff with the city’s energy and climate action policies. Together, the initiative and policies have helped to drive the city’s efforts for efficiency, conservation, renewable and smart grid technologies, all of which will contribute to meeting greenhouse gas reduction goals.

“It will be crucial for utilities pondering an investment in smart solutions to develop a comprehensive plan that is tailored to a community’s needs. In addition, that plan must include an aggressive customer education component to instill trust and preempt suspicions about the utility’s motives,” concludes Ellermeier.

This article appeared in Metering & Smart Energy International Issue 4 2016.

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