I THINK THERE ARE A COUPLE OF KEY ISSUES. FIRST, BECAUSE there's so much discussion about smart grid, what we don't want to do is over-promise and then under-deliver to our customers. Because no matter how you look at it, if smart meter is any indication of the first impression that they have of smart grid, some companies have done it very well, but some companies have not. So now that we're rolling, and your customers have all this information about, "Oh, you have a smart meter now, you have two-way communications," how is the utility going to translate that into benefits customers actually care about?
So that's one of the biggest challenges. The meters are in; what are you doing about it? And what are you doing that is actually going to make sense and benefit the customer? In the customer's language, what are you doing to find the plan that is going to improve her lifestyle, or help him reduce his bill, or is going to be more convenient for their lives?
How do you communicate that so that the customer cares? Utility customers think about their utilities about six to eight minutes a year: when they pay their bill (unless it's automatically paid), and when they have an outage. And even then, if you're lucky, only 15 to 25 percent of the people call you when they have an outage, because they assume the neighbor has, or they assume you already know about it.
Customers don't know utility realities
That's one thing we found out when we did the smart meter installation. We did 130 community workshops before we even rolled the meters out, and the customer had no idea that we didn't know. They say, "You've got to be kidding! You didn't know I'm out of power?" I say, "No." And they pull out their smart phones and say, "I know exactly where I am in the world, I can pick a restaurant, book a table and then get point-to-point directions on how to get there. And you, the utility, actually don't know if I'm out of power or not?" I say, "I only know if it's a major outage. But if a fuse blew in your transformer, I wouldn't know."
We're putting intelligence out there now, making the distribution system a lot more intelligent, but it's still a long way away. The Smart Grid Investment Grant we received is literally only 12 percent of our system. So it's going to take a while before we can upgrade the rest of the system. And so the key challenge is, how do you communicate to customers the benefit that you have to keep the customer's interest? If you can't, it's like green-washing something-smart this, smart that-so when you have real programs that benefit them, they've already lost interest. One of the big challenges is: how do you stage your program and services, and the data analytics now that you have on the smart meters and your distribution system, and how do you parlay it into a benefit that customers could actually care about?
Even as much as we talk about volt-VAR optimization and conservation voltage reduction, and the customer doesn't have to do a thing and can get between two percent and two-and-a-half percent reductions on their bills, most customers say, "Paul, my bill is $80 a month at SMUD. Well, two percent is $1.60. I can't even buy a cup of coffee at Starbucks with that. It's not going to be really high on my priority list when I've got to compete with taking my kids to soccer, piano, worry about college, worry about high school and SATs and PSATs, it doesn't compete with that." And so that's really why I think it's so important for utilities to be really thoughtful about the customer experience. To me, I think that's actually a bigger challenge.
Getting usable data into the system
Technically now, we have EVs, PVs, time-of-use rates, demand response-how do you actually get the data into the distribution and transmission systems, so people can actually use it? That's one of the challenges that we're tackling right now. There are literally millions of data points that we have to make sense of before we overload our operators. I think our biggest challenge of 2012 is to determine when we have enough intelligence that we can start optimizing the system so it translates into dollar savings or improved reliability for our customers.
It is overwhelming if you don't really spend the time to think out strategically where do you want to go and how to prioritize those needs. Because you do have to prioritize, and you really need to keep an eye out and share the knowledge within the utilities. Specific utilities have different problems they're trying to tackle, and there truly are unique challenges that each utility faces, when you talk about living the smart grid vision. But there are also a lot of similarities. I think that it's finding the right balance. We can really learn from each other, and say to ourselves, "How does this apply to my utility?"