When the concept of the smart grid was first being discussed, a popular term that many of us used was "educating the customer." The phrase is a little paternalistic, but after all, we are talking about a significant change in the business relationship between utility and customer.
 
Over the last year or so a more popular smart grid term has been "engaging the customer." This term better described the relationship change that will need to happen to see the smart grid successfully adopted. A utility can educate a customer all it wants, but if it does not solicit feedback from customers, and engage in a dialogue, smart grid solutions are not likely to be attractive to the customer, and they will not be adopted, at least not in the quantities desired from utilities.

In my humble opinion I think we are still off the mark with these phrases. I think we need a better phrase that provides a clear understanding of the destination that we seek. So today I would like to suggest a new term to describe what our industry must do for smart grid customer program endeavors to be truly successful, and that is "persuading the customer."

We can engage in a dialogue with utility customers until we are blue in the face, but at the end of the day if utility customers do not change their behavior, our industry's smart grid efforts will be a failure of epic proportions.

Now don't get me wrong. We must indeed educate and engage the customer, but this should lead to product and service creation and delivery and end with the realization of valuable results.

The obvious challenge our industry will have in persuading the customer is attributable to human nature. That is, we can get a little complacent. The utility business in the eyes of the customer has not changed much in the last 100 years. This is especially true for residential customers - they use power, the monthly usage is multiplied by the associated rates for the customer, the customer receives a bill each month for their usage, and the customer pays the bill. And the only time the typical residential customer would call the utility is if their power went out.

To persuade the customer (and the customer's regulators too for that matter) to change this relationship, utilities are going to need to excite the customer, and clearly demonstrate how their needs will be better met. Utilities will need to have a better understanding of what their customers really want and will need to have a plan on how they can simplify needed changes.

To the educated reader this probably sounds like a significant challenge. The bad news is this is a significant challenge!

Utilities will need to better understand the real products, services and support that customers value, and address end users not as a single group, but as thousands of unique buying groups. And they must develop strategies to increasingly drive program participation. Unless a certain level of critical mass is achieved, the time and money invested in smart grid solutions will not be worthwhile.

The good news is that the smart grid does offer a vast array of potential benefits for customers. The smart grid has the potential to be embraced by consumers as a way to lower power bills, lower the number of outages, improve the level of customer service and help the environment.

However, our industry needs to take heed from the negative feedback being heard from many smart metering customers. Somehow many in our industry have been convinced that utility customers desire to be "empowered" and are eager to have additional pricing options. While this is true of some utility customers, clearly not all have been persuaded.

 

Christopher Perdue
Vice President, Sierra Energy Group
cperdue@energycentral.com
310.471.7396