Snatching Defeat From the Jaws of Victory

by Paul Woods, HP Exstream


Ineffective communication of smart meter data could be a utility company’s greatest missed opportunity.


When viewed side by side, the simultaneous market penetration of smart meters and smart phones is stunning.

Three years ago, about 6.5 percent of U.S. homes had a smart meter. Today, the Institute for Electric Efficiency estimates 1 in 3 U.S. homes have smart meters.

Research firm Berg Insight projects there will be more than 602 million smart meters installed globally by 2016 with U.S. penetration rates of 50 percent.

As of Sept. 28, 2011, more than 7 million smart meters were installed using federal stimulus money, with as many as 15.5 million stimulus-funded meters expected, according to the Federal Energy Regulatory Commission.

Compare that to smart phone adoption rates, and the similarities are clear. At the end of 2011, the International Telecommunication Union estimated there were 6 billion mobile subscriptions—the equivalent of 87 percent of the world’s population.

That reflects an increase from 5.4 billion in 2010 and 4.7 billion in 2009. In the Americas, estimates of mobile use are as high as 969 million—more than 103 mobile phones per 100 people, with more than 41 percent of all U.S. mobile subscribers’ using a smart phone.

Utilities have enormous opportunity to drive greater customer connection and understanding.

Utilities are encountering a near systematic rollout of powerful tools for gathering and mining consumer information.

Consumers are adopting en masse—and at their own expense—the digital and mobile technology needed for utilities to pass along insights from this data.

Ineffective communication

But in what might be a case of snatching defeat from the jaws of victory, many utilities are not taking advantage of this opportunity by implementing the kind of effective communications strategy that engages key stakeholders. Worse, others are communicating ineffectively to consumers.

Some companies have been more than happy to discuss smart meter benefits and cost savings; however, the benefits they focus on are for the companies and not the customers.

That translates to many consumers’ feeling that the benefits have come at their expense in an infuriating one-two punch of tax-funded stimulus and raised energy rates.

Is it any surprise, then, that news stories’ questioning smart meter safety are becoming more common and are fueling an expanding, interconnected network of grassroots, smart meter opposition groups that use online and mobile communications?

Scientific studies confirm smart meters are safe—the meters give off less radio frequency emissions than average cell phones—but misinformation has stoked public fear to the point that three states have initiated smart meter moratoriums.

In California, at least 47 municipalities have demanded a stop to installations or even criminalized them.

Green Button Push pressures utilities

Meanwhile, the Green Button initiative narrows utilities’ window of opportunity to successfully engage consumers because it offers tremendous incentives for organizations outside the industry.

When President Barack Obama took office, he announced an open data strategy that promoted government transparency.

The utilities industry took note and created the Green Button initiative, providing residential and business customers access to their electricity consumption information in a consumer-friendly format via electronic channels. In May, the number of U.S. customers with access to Green Button data reached nearly 31 million, compared with 18 million customers in January and 27 million customers in March, according to the Department of Energy.

With the Green Button initiative, third-party software providers can engage those nearly 31 million utility customers with apps that allow them to control and gain insight into their energy usage data.

As these vendors and software providers vie for customers’ attention, utilities are challenged to engage customers with their own applications—many without a modern communications infrastructure or internal precedents from which to draw.

“The advent of Green Button means that if the utilities do not dramatically improve their customer interfaces and features, somebody else will,” said Ogi Kavazovic, vice president of marketing and strategy at OPower.

For some utilities, that dramatic improvement starts with a review of communications fundamentals.

Utilities that want to galvanize smart meter support should present substantive messages about smart meter benefits for consumers.

As utilities embrace advanced metering infrastructure (AMI) in an effort to provide two-way communications with smart meters, providers must understand that effective consumer engagement hinges on what they say to consumers and how and when they say it.

Social media’s power play

Assuring consumers of smart meter safety is a critical first step. Sensational, scientifically inaccurate stories about the radio frequency smart meters produce are easy to generate, but they are difficult to dismiss.

As utility commissions in California and other states review scientific studies on smart meter safety—one study found smart meters responsible for one-six thousandth of the permitted federal level of emissions—widespread fears stoked by anti-meter groups still drive headlines with opposition efforts and class action suits.

From California to Illinois to Maine—where in late July the public utilities commission voted to investigate smart meter safety—utilities regularly are forced to disprove negative claims publicly because they are tried publically in the media.

Many smart meter opponents coalesce in plain sight via social media and other digital communications platforms. In the past, reporters looking for quotable voices of grassroots opposition had to attend city council meetings or the rare utility town hall meeting and listen and interview participants. Today, reporters merely check out a Facebook page or Twitter feed to uncover half a dozen instant sources. Decision-makers at utilities must understand that if social media can topple a totalitarian regime, it can stop a rate increase or smart meter installation.

Creating compelling communications

To build stronger relationships with consumers, utilities must avoid communicating a narrow subset of consumer benefits. In a down economy, any savings will help, but if misinformation about safety hazards has been injected, financial incentives become less compelling.

When a lower bill is the sole benefit a utility touts, the utility practically ensures greater consumer frustration and opposition to rate increases after smart meter installations.

More compelling than a few dollars or even pennies off a monthly bill, smart meters and a smart grid accurately pinpoint and reduce power outages. Faster restoration—particularly during severe weather—provides a foundation for stronger communication: safety and comfort.

Imagining a communications campaign of this nature requires utility decision-makers consider customer impacts.

In addition, utilities can draw compelling content from related issues, including peak energy usage, the inefficiency of power grid usage, blackout threats, and the negative environmental impact of excessive and sometimes unnecessary power usage.

To communicate benefits most effectively, a utility also must devise a communications strategy that balances privacy and insights.

The key is in the enormous amounts of data collected from smart meters and how the utility uses it.

Like other industries that struggle to meet big data challenges and opportunities, utilities must understand that the value of information is not in amassing it but in how quickly, accurately and effectively it can be parsed for actionable, valuable analytics and drive near real-time customer communications.

The amount of smart meter data some utilities pull is impressive.

Many utilities read residential smart meters hourly, upload the data every four hours and run analytics on the data every six hours.

Multiply that by several million homes, and the importance of communicating key metrics effectively and efficiently is evident.

Without a strategy to analyze this information intuitively, utilities could bury themselves in unusable stats. If communicated properly, the data could drive great consumer engagement.

One popular analytic, consumer energy usage and neighbor comparison, can be interesting but when taken on its own is slightly passive.

A more proactive, useful approach is the comparison of usage profiles and determination whether a customer could be a prime candidate for a peak-time rebate or time-of-use program.

If someone misses the usage window by only an hour, a utility could send a tailored message to alert of the opportunity and drive greater use of a digital portal, mobile app or social platform.

This establishes invaluable, proactive customer service, alleviates call center volume and changes the communication dynamic between utilities and customers by extending communication beyond one paper bill each month.

Protecting what’s private

This comes with a note of caution: Utilities, especially with smart meters, have deeper access to consumer information.

People are right to assume and expect utilities will use that consumer information responsibly and to customers’ advantage.

Utilities should tread lightly when communicating advantages assessed from smart meter data.

Offering insights derived from too much analysis of personal information can feel invasive and even unsettling to customers. Unease can be compounded when communication platforms do not align with customer preferences.

If a customer opts for paperless communication and receives a specific, personal, time-of-use offer despite his existing enrollment, he likely assumes his utility gathers information haphazardly and communicates carelessly.

If a utility emails outage information specific to a customer’s area instead of text message, mobile or social media, the customer probably will not receive the information when he needs it.

What will the customer think when service is restored and he receives useless, outdated utility messages on his home computer?

Utilities will be well-served to move communication strategies to the tops of their agendas.

Developing communication strategies alongside all other initiatives will prevent having to develop messaging quickly and under pressure. Focus on consumer engagement before it becomes a crisis.

The reach and efficiency of social and mobile platforms present much opportunity. With AMI and analytics, utilities can manage the flood of smart meter data that allows customers and utilities to reap the benefits of a smart grid.

To capitalize on that opportunity, utilities must communicate benefits in ways that reach and influence customers.

Utilities are interacting with highly connected, savvy consumers. Without a sound communication strategy, a utility’s next crisis could be just a simple tweet away.

Paul Woods is the energy and utilities industry solutions lead within HP Exstream. He has 20 years’ experience in the industry.

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