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Intelligent Utility explores the strategies and realities of delivering information-enabled energy and building a smart grid, focusing on people, process and technology, economic models, finance, and public policy.


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'Engagement' issues, redux

My column yesterday suggested, perhaps naively, that the annual Consumer Electronics Show in Las Vegas held lessons—or at least an eye-opener or two—for the power industry, if utilities must forge ahead with customer engagement.

So I thought it would be useful to provide resources from our deep archives on the issue, so that readers might save themselves a dash to Sin City. (Not that my columns have ever actually led to anyone booking a flight, unless it was a flight from pundit-land.)

The research and development issue has to be addressed more equitably and when you engage customers they will begin paying attention to their bill and the byzantine stack of charges. I'd submit that the current practice of forcing ratepayers to foot the bill for experiments and cost overruns scorches the earth for more benign interactions. See "The Trouble With (For) IOUs." One recent suggestion, captured in "Energy Innovation and Grid Modernization," is to create a mandatory mechanism for industry-funded R&D. I can hear that debate simmering even now.

Another issue that's going to crop up with virulence this year as discussion turns to using interval meters to enable dynamic pricing is protecting vulnerable consumers such as low-income customers, those with medical equipment that can't be shut off and seniors in frail health or with fixed incomes. A number of sub-issues arise. We've talked recently about the complexities of the low-income customer in "Untying the Gordian Knot" by my colleague Kate Rowland.

Speaking of dynamic pricing, my foray into the topic—see "Dynamic Pricing Now!"—was greeted by readers' commentary, captured in "Dynamic Pricing: It's Complicated."

Even the best laid plans for communicating and engaging customers, even in a municipal utility where the customers also own the system, can run into pockets of naysayers who don't accept anything you tell them. We've documented that phenomenon in, among other columns, "Naperville's Meters and Their Foes." (The lesson here may be that you design your programs for the 95 percent of people who can still agree that, say, gravity is a fact, and offer opt-out options. Still, don't be upset if a core of refuse-niks reject every option. See "Smart Meters = Tip of the Iceberg.") But utilities seem to be trying their best to account for customer preference as long as they can maintain a billing relationship; see "Vermont and the Opt-out Provision."

One way to engage customers, I'd suggest, is to address outage issues squarely and link the rationale for a smarter grid to better asset management, outage management and improved time-to-restoration estimates that digitization can provide. Still, that's a touchy area and utilities with seemingly smart practices still get dinged. See "BGE Handles Howling, and Hurricane," and "Outages Drive Smart Grid, and Muni Legislation." The first piece lauded BGE for maintaining a public face and customer interaction over complaints; still, many utilities were lashed to the mast over their restoration performance and communication practices. Fairly, in some cases, unfairly in others.

Still, the heavy hand of many regulated monopolies would seem to negate parallel efforts to "engage customers" by "enraging customers." Don't take it from me. Our readers give the industry an earful in "ComEd, Xcel: Readers Say There's a Better Way."

It has been said that the pen is mightier than the sword, meaning that persuasion trumps Machiavellian tactics. At least, that's the theory. Utilities, particularly investor-owned utilities, stand at a crossroads, whether they know it or not. Distributed generation and falling costs for solar photovoltaics and energy efficiency practices will increasingly be snapped up by utility customers to escape the "heavy hand." The utility industry doesn't want to wake up one day to find that persuasion no longer works on a captive audience tired of the sword.


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