Time to coach, mentor, counsel power customers, expert says

December 13, 2020

Teaching power consumers about dynamic pricing is more complex than just sending materials in the mail to explain what peak and off-peak power means, Peter Honebein, co-founder of the Customer Performance Group, said during a Demand Response Coordinating Committee webinar on Friday.  The online discussion focused on explaining dynamic pricing and cost recovery options to the public.

Customer education should be thought of as customer performance, Honebein said.  To get the performance utilities desire, there must be a vision laying out the goals of a dynamic pricing program.  Consumers need to be given access via effective call centers, in-home displays and other tools.  Customers will also respond to incentives, which can be all reward or reward and punishment in nature, he said.

The educational component needs to go beyond the traditional “lecturing” process, Honebein said.  It should instead be based on “discovery learning,” which stresses education as an ongoing process.

Utilities should also take into account how information is delivered and if customers are actually getting the correspondence.

It is also important to capture a customer's attention with any educational materials in less than a minute, before distractions set in.  Customers have a limited “time on task” window, he said.

“Education is not an event, it is a process,” Honebein said, noting that it helps to ask consumers to opt-in to receive additional information, like direct marketers do.

As a TOU plan participant, Honebein finds a refrigerator magnet his utility provided listing the peak and off-peak hours in his plan a valuable piece of education, he said.  The tool allows people in his home to plan for or delay washing dishes, running a washer and dryer or turning on the oven.  He has saved $262 this year by taking part in his TOU plan, he added.

Utilities can protect consumers and ease their concerns about how dynamic pricing will affect monthly bills.  One way is to issue shadow bills showing what power costs under an existing flat rate plan and what it would have been under a dynamic plan, Honebein said.  There is also bill protection, giving customers the right to a rebate if the dynamic pricing plan did not save them money.

The “most special” way utilities will have to change in a smart meter/TOU universe is to improve customer care, he said.  “The call center of the future will be about coaching, mentoring and counseling” versus the traditional, transactional-based way centers operate.

Voluntary plans urged

Consumer advocates have concerns about dynamic pricing and cost recovery, starting with whether plans are required or voluntary, said Ohio Consumers' Counsel Janine Migden-Ostrander.  These advocates prefer voluntary plans -- and note that within that choice is another: whether utilities make it voluntary on an opt-in or opt-out basis.

“Opt-out gives [utilities] a larger pool of customers to achieve the changes and reduce peak demand,” she said, but there is also the opportunity for program failure if large numbers of people result in uneducated consumers who make the wrong choices under TOU plans and get angry when their power bills increase.

Cost recovery plans must ensure utility shareholders, and not ratepayers, are bearing the risk of smart grid initiatives -- and that verifiable and transparent audits can occur.  Recovery should be treated in base rates, and not surcharges, she said.

“There should be an open and honest dialogue to mitigate [power] costs to consumers,” Migden-Ostrander said, noting that consumers also have gas, water and broadband bills to pay.

More pilots sought

More pilots are needed to test a number of dynamic pricing ideas, like how low-income consumers are affected, Migden-Ostrander said.

“There is a correlation between income and usage: The higher the income, the higher the usage,” she said, noting that low-income households would not likely have a lot of flat-screen TVs and other discretionary electronic equipment often found in more affluent homes.  The lower load for lower-income customers could make dynamic pricing less favorable for some.

Utilities need to offer dynamic pricing plans as soon as possible when AMI deployment begins so customers can see the benefits, Migden-Ostrander said.

Rate plans should also be kept to a minimum to avoid confusion, and net metering should be part of TOU programs for those interested in distributed generation, she added.

© 2010 Modern Markets Intelligence Inc..  IMPORTANT: This article was reproduced from the December 13, 2020 issue of Smart Grid Today with the limited permission of the owner.  To view the full story on Smart Grid Today’s website, please visithttp://www.smartgridtoday.com/public/Time_to_coach_mentor_counsel_ltbrgtpower_customers_expert_says.cfm?sd=31 .