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Customers need energy data first

I tuned into a webinar last month in which Roger Levy of Levy Associates presented regulators with a talk on customer access to their energy use data and how information feedback does—and does not—engage them.

Officially, the talk was titled "Customer Data Access—Valuing Feedback: A Strategy for Customer Engagement," and it was delivered to the National Association of Regulatory Utility Commissioners (NARUC). Levy works in conjunction with Chuck Goldman, a staff scientist in the Lawrence Berkeley National Laboratory's Smart Grid Technical Advisory Project, for NARUC. 

Essentially, Levy cited several "myths" and paired them with actual facts established through careful research. The myths, he said, have become conventional wisdom through repetition, not because they are backed by scientific evidence. He also offered insights into fundamental issues regarding how to achieve long-term behavior change.

Part of the NARUC webinar also focused on recent research findings by Karen Herter, of Herter Energy Research Solutions, from a project she conducted at the Sacramento Municipal Utilities District that bolstered Levy's key points.

Both Levy and Herter raised such fundamental issues around the role of electricity customers, the provision of energy use data to them and the desired behavioral changes that utilities and regulators seek that I followed up with each of them separately to explore their findings.

As readers must realize, this is a particularly critical area, one that deserves attention and clarity. Levy's and Herter's findings and conclusions are not prescriptive, but they inform the discussion that's currently at or near the top of the industry's agenda, which is how do you engage customers and accomplish smart grid expectations? So their points unfold here in a conversational manner, befitting the context. But I'd urge anyone with questions to contact them directly for key details, arguments and data.

First, Levy's short list of myth vs. fact:
 
Myth: In-home displays are essential. Fact: In-home displays are hardware, which is not essential. Information is essential.  .
Myth: The use of in-home displays delivers 5 percent to 15 percent energy savings. Fact: Most savings estimates are anecdotal, the research is inconsistent, and focused on short-term behavior.
Myth: Real-time data is more effective than day-old data. Fact: Studies provide minimal evidence for this.
Myth: Rate, bill design and frequency influence the impacts of in-home displays. Fact: Studies typically ignore these variables.

Levy also made points about the role of electricity customers, the provision of energy use data to them and the desired behavioral changes that utilities and regulators seek.

"We emphasized to NARUC that there's been too much focus on in-home displays," Levy told me. "The studies in support of in-home displays are at best flawed and, at worst, they're looking at the wrong things." 

In home displays support short-term behavior change, focus on near real-time meter data, and price estimates which are not necessarily compatible with customer appliance and infrastructure investment decisions, Levy told me. Behavior change without automation has been shown to be unreliable and difficult to sustain. Permanent changes in energy use and usage patterns will require investments in more efficient appliances and renewables, which is a long-term proposition. These types of investment will require historical information, pricing, cost and  other data that provides customers with clear tradeoffs.  In-home displays only provide a small part of this information package.   

"Right now, utilities aren't focused on the customer value function," Levy said. "In fact, they haven't given it a whole lot of thought. What you see in most of the smart grid implementations is that there's been very little change to rates and pricing, and how information is presented to customers.  Most changes to the information customers receive has been dictated by political pressure. So, there's a lot of work to be done."

Step back and consider the bigger picture, Levy suggested.

The customer is important to making the smart grid work because it's the customer that has to make major energy usage changes for demand response, peak load shaving and other load shaping activities. And customers are the party in the equation who can make broader use of distributed generation and renewables, he said.  Changing customer behavior and investments is a long-term proposition that requires a long-term plan, not necessarily in-home displays.

"One of the key weaknesses of smart grid at the customer level is that there's been too much emphasis on hardware," Levy said. "The focus should be on the energy use feedback and the communication of that information. There's been substantial focus on in-home displays and that's hardware. But there's been a lack of focus on the information communicated to the customer. In-home displays can facilitate that, but 'in-home display' can mean any kind of device, not necessarily a dedicated device."

The focus on the customer must integrate and include all customer touch points: the rate, how rates translate into pricing, billing, appliance rebates and incentives, access to information and education to inform customers on what actions they can take and how changes will affect them.

The power industry needs a better understanding of the customer value function: What's in it for me? How will pending changes impact my bill? How does what I do affect the community I live in? Some customers' objectives will include "community," small or large.

The information and other measures to encourage customer behavioral changes need to be persistent and long-term, Levy said. In-home displays typically focus on short-term changes that - unless supported through other measures - are difficult to sustain.

Okay folks, those are the myths/facts and challenges confronting the power industry as it attempts to implement a smarter grid that involves the much-ballyhooed two-way interaction with the customer. Tomorrow, we continue the discussion with Levy for more color around these issues and some suggested solutions.

Phil Carson
Editor-in-chief
Intelligent Utility Daily
pcarson@energycentral.com
303-228-4757

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