AH, I LOVE MY HOME STATE OF KANSAS. THE ROLLING HILLS (yes, Kansas has hills), the Wizard of Oz, the tasty barbeque—and the laid-back Midwestern humor. The folks at Westar Energy—a utility headquartered in Topeka, Kan., that employs 2,400 people and serves more than 684,000 customers in east and east-central Kansas—not only understood my humor, but also understood a critical factor in the success of smart grid projects: customer engagement. I recently visited the utility’s office in Lawrence, Kan., and learned that Westar Energy is serious about making sure that customers matter most in their smart grid project—SmartStar Lawrence.
Before diving into Westar’s customer engagement efforts, let’s quickly review the SmartStar Lawrence project. The project will install 48,000 smart meters in Lawrence—a town about 40 miles west of Kansas City that’s home to the University of Kansas. On top of the smart meter installation, the project will deploy distribution automation, smart grid-enabled outage management and supporting IT infrastructure. Even though the meters only cover a portion of Westar’s service territory, the project will build out the entire IT infrastructure needed to support a systemwide deployment of smart meters.
The three-year project will cost about $40 million. The U.S. Department of Energy (DOE) will cover about $19 million of that through the Smart Grid Investment Grant program from the 2009 American Recovery and Reinvestment Act (ARRA).
“We knew a smart grid initiative was going to be undertaken at some point,” said Hal Jensen, who has worked with Westar for nearly 20 years in various roles and currently serves as director of SmartStar programs. “The ARRA presented an opportunity to move forward, and Westar looked at the opportunity very diligently. We had to understand the rules of the game. We became comfortable with them and ultimately made an application.” On March 26, 2010, Westar signed an agreement with the DOE to move forward with the project.
Testing the unknown
Through the SmartStar Lawrence project, Westar will work to prove the assumptions it laid out in its business case, but some will be more difficult than others. "We generally know how many truck rolls we’ll save and other business items like that, but what we don’t know is the customer reaction,” said Jensen. “How do we promote the project? How do we attract and engage customers? How will customers accept it?"
A first step for engaging customers was rallying community leaders around the project. “We didn’t want the project to cover just a portion of a town. We wanted a communitywide effort,” Jensen said. “To that extent, we’ve worked very closely with city and county officials, the chamber and other key organizations—like the University of Kansas. We’ve been actively engaged with all of them from the very beginning.”
“I couldn’t ask for a better response from the community,” added Jim Ludwig, who’s been with Westar for 20 years and serves as the executive vice president of public affairs and consumer services. “Whether it’s elected officials, the chamber or community leaders, they’ve been very supportive and accepting.”
Westar has successfully rallied community leaders around SmartStar Lawrence, but what about rallying everyday customers? Community building was key, but Westar realizes it has to go further. Other ways Westar is engaging customers include:
- Community-based marketing
- Immediate interactivity with smart meters
- Employees as smart grid ambassadors
For customers to accept smart grid, they have to know what the term means. “It’s not a known entity we’re rolling out here,” Jensen said. “As we plan our communications effort, we realize it must start with a very fundamental message about smart grid to build awareness. Once we get past that, then we can start explaining the project specifics and generating the excitement and enthusiasm for what we’ll be able to offer customers.”
In addition to Westar efforts, the company is working on joint marketing with the city, the county and the chamber of commerce—all in the spirit of building total energy awareness in the community. This includes linking the SmartStar project with other energy projects that have been going on for a while. By tying many energy projects together, Westar expects to build a broader customer understanding and awareness of energy.
Although the initial messages about SmartStar will be consistent across the service territory, Westar realizes that customers will have more sophisticated needs as they learn more about the smart grid. “Customer engagement is going to evolve and we realize that customers won’t move monolithically in the same direction,” said Ludwig.
“We’ll have to build out those customer segments as we go,” added Peggy Loyd, Westar’s vice president of customer care. “Right now, as a traditional utility company, everyone’s the same. We have to spend a lot of time developing those segments and understanding the best messages and offerings to put in front of them.”
Westar realizes that true customer engagement won’t come through just a slick marketing campaign and a smart meter. Customers need opportunities for immediate interactivity with the new technologies. Ludwig pointed out that “it’s just not satisfactory for customers to say that their memory of a smart grid experience was Westar showing up at their house, inconveniencing them while they got a new meter installed, and then nothing else happened. That’s not a good customer experience.”
Westar customers will be able to access information through a web portal shortly after their meters are installed. The portal may not offer all the information customers could ever want, but it will help them track daily energy usage, cost information and their carbon footprint. The information offerings will evolve over time, based on customer demand.
“We want to determine what information will have value for customers and that it’s something they’re interested in. If that’s the case, then we’ll look at what format they would like it in,” Jensen said. “It is important to understand that before we go too much further in deployment. We want to make sure there is intrinsic value for the customer, and that we can effectively serve as an energy advisor for the customer.”
Employees as smart grid ambassadors
Another key customer engagement component is Westar’s employees. “We’re a service territory of small towns,” Ludwig said. “So when consumers want to know something about us, they typically ask one of our employees. They’re our ambassadors.”
Westar has numerous efforts under way to educate employees. Those employees not directly participating in the SmartStar project are getting smarter about the smart grid so they can better inform customers. These education efforts include everything from a SmartStar quiz with the opportunity to win prizes to SmartStar weekly updates to in-person employee presentations.
In addition to education, the company culture is focusing more on the customer. “I’m a technical guy, and I’m looking forward to the technology,” said Kevin Heimiller, who’s been with the company for 36 years and is director for advanced metering infrastructure. “But I’m also becoming customer driven. I’m really pumped about it. I think it’s really good stuff, and it’s going to be really good for our customers. We need to do it right.”
The push for the customer is also driving better cohesion within the company. “Not they we haven’t had challenges working together, but everyone is on board,” Heimiller said. “It’s like ‘let’s talk about this, let’s concentrate on the customer.’”
All in all, Westar’s focus is not only on building a smarter grid, but also on truly engaging the customer, which is proving to be another reason to love Kansas. “It’s been rewarding and a lot of fun because it’s a new frontier for us. And really, in many ways for our industry and our customers,” Ludwig said.