Better Consumer Engagement Needed on Demand Response

Platts
June 29, 2020

By Tom Tiernan

Demand response providers and utilities should improve their consumer engagement efforts by targeting only customers that have an interest in smart grid technologies or timebased pricing, several speakers said at a Washington conference this week.

Utilities have been making some headway on consumer engagement efforts associated with smart grid plans, and the conference, the National Town Meeting on Demand Response and Smart Grid, offered plenty of case studies and lessons learned on that front. But plenty of speakers made it clear that because the utility sector is slow to change, improvements come in small steps, and most customers don’t want to change their energy usage patterns even if they stand to benefit financially.

Some of the phrases from utility speakers heard over three days of panels at the meeting
include: “We’ve never really done anything like this before;” “We’re charting new territory;” and “We hope to learn more about our customers.” The speakers were referring to different types of demand response or time-based pricing plans, but they were all talking about engaging customers as customers and not as ratepayers.

Almost half of utility customers in one survey showed an interest in time-of-use pricing, said Patty Durand, executive director of the Smart Grid Consumer Collaborative, a collection of utilities, regulators and consumer advocates formed to conduct research and improve consumer engagement. Utilities “do not have to convince everyone” of the benefits tied to smart grid efforts or demand response plans, just those that have a desire to learn more, Durand said.

There is clearly a thirst for information, and consumers are not turning to their utilities for that information, said Rich Peterson of Best Buy stores. Best Buy set up energy information booths at three stores with the help of retail suppliers or local utilities, and their success for both the stores and the suppliers is pushing Best Buy to try it elsewhere, focusing on restructured states, said Peterson, director of growth operations in the new business solution group at Best Buy.

Customers spent an average of 35 minutes at the booths in the Best Buy stores in San Francisco, Houston and Chicago. Pacific Gas & Electric trained Best Buy employees to share information about home energy usage and ways to save electricity in California. And in Chicago and Houston, where customers have retail choice, Reliant Energy and Constellation NewEnergy helped inform customers about retail competition, with Best Buy gift cards available if customers signed up to buy power from NewEnergy in Chicago, Peterson said.

Meeting with customers on their own terms or in personal settings works best, rather than bill inserts, door hangers or other communication efforts, Peterson and other speakers said at the meeting.

Automated devices can be programmed to respond to power prices or market conditions, so customers do not need to take action, and such automated demand response is a growing sector so consumers do not have to change their behavior or lifestyle to see results, several speakers said.

But even programmable thermostats can present a challenge for some customers, related Mike Farrell, director of customer programs at Oklahoma Gas & Electric. In the first heat wave of summer this week, OG&E’s call center has been “overwhelmed” by inquiries from customers taking part in a demand response program where power prices and colored lights indicate peak demand events, Farrell said.

OG&E has about 24,000 customers in the program, which has been underway for more than a year, with customers paying varying rates based on market prices and grid conditions. The off-peak price is 4.5 cents/kWh, with midpoint prices of 10 cents/kWh and 23 cents/kWh, and a critical peak price of 46 cents/kWh.

Many customers have called OG&E because “they have no idea what those lights mean” when high prices are in effect during the heat wave, Farrell said. In some cases, husbands or wives sign up for the program and don’t inform others in their household, but the results this week show that OG&E has a lot of work to do informing consumers about the program.

OG&E, which has about 790,000 customers, hopes to attract 120,000 customers to the program by the end of 2014, and it is ramping up its advertising and marketing about the program, Farrell said.

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