UX and the Bakersfield Effect

User Experience (UX) and the Bakersfield Effect are not yet terms that go hand in hand—but they will be.  I know the title of this post sounds way too geeky but it says a lot in few words about what is going on in the successful—or not so successful deployment of smart meter technology.

Unless you get the user experience right up front every utility rolling out smart meters can expect the same unintended consequences that the early adopts found at PG&E in Bakersfield, or Oncor, or at Xcel Energy’s SmartGrid City in Boulder.

We are at that time of the year here in California and across the West where summer may be waning and the kids are back in school but Fall can still bring the hottest months of the year and a quick spin through historic events will tell you that wildfires and earthquakes have made big news then too.  So we who live on the warm side of the hills or near one of the fault lines get a little antsy each autumn.

Last year at this time PG&E had a regulatory life changing experience when a group of angry customers showed up at a public relations event celebrating the rollout of smart meters in Bakersfield waving their utility bills and demanding answers.  I have called this the ‘Bakersfield Effect’ seeing it as a watershed signpost for the transition of the utility business.

  • The Bakersfield Effect was the unintended consequences of the installation of smart meters at the same time of high temperature events driving up demand, tiered pricing rate designs pushing customers into higher unit costs during peak summer periods and thus spiking bills, and CPUC approved utility rate increases all converging to spark a firestorm of customer anger and an equally angry response from embarrasses politicians and regulators.  This ignited a wildfire of consumer complaints across PG&E’s service territory and actions by a handful of municipalities to stop smart meter installation.  That is has not spread from PG&E to SCE or SDG&E suggests this may be more about PG&E than smart meters.
  • The Bakersfield Effect 2.0 is the looming threat that organized opposition to smart meters and the sum of these impacts driving up utility bills will metastasize into wider opposition to rising utility costs.  TURN is the public interest intervener in utility rate cases in California and one consequence of a Bakersfield 2.0 movement might be to weaken TURN and fragment the interveners.  Whether the opposition gets organized and is sustainable beyond these isolated cases over time depends largely upon customer experience, the response of utilities and regulators to spiking utility bills and the strength of public perception that the smart grid cure may be worse than the disease.

Both the Bakersfield Effect and its 2.0 aftermath are preventable but not with utility business as usual.

Vendors are only too happy these days to help utilities assemble the smart grid parts like a LEGO set at Christmas.  But remember what while you see a space ship on the cover of the LEGO box that does not mean your kid is going to built that.  Instead kids and customers have a way of doing their own thing.  So before you roll out your new smart grid solution it would be wise to invest some serious effort and time rolling out the idea to your customers first and giving them the information, tools and insight about what to expect.

Utilities are good at delivering energy, but they are not very good as consumer products or video games so it takes some adapting of the utility culture to fit the customer’s expectations.

Opt-out Empowerment

So one of the lessons learned is pay attention to the ‘Opt-Out’ question in a utilities customer service information programs for customers.  Using that options tells you a lot about whether customer are receptive to more information about how to manage their energy use, achieve their own green energy aspirations and save money.

There are plenty of vendors now focused on this space which sits behind dashboards or online portals that with the customer’s permission combine energy use information from utilities and those new smart meters with a range of information services, energy efficiency and demand response options and other ways to save.

One of the dirty secrets of utility customer service is less than 5% of utility customers typically participate in most energy-efficiency programs.

But I want to tell you about one of those vendors that is building a name for itself here in the West is OPower.  This Arlington, Virginia based software startup uses the U.S. mail to reach out to utility customers in markets it serves. It offers access to its online portal and the ability to input usage information to provide the customer with valuable insight about their own energy use and savings opportunities.  OPower’s home energy reporting service boasts an amazing 80% participation and that is getting attention.

Do you want to opt out?

That is the question.  If the customer says “yes—go away” they risk missing out on useful information and savings opportunities other in their neighborhood will be getting.  But the ability to opt out is a powerful way of getting customers to actually participate in many of these utility programs.

You see, that is one of the most maddening realities of energy efficiency and demand response programs for both utilities and regulators—customers ignore them even when they could save money and improve the environmental performance of the utility.

OPower’s growing utility client list here in the West includes Puget Sound Energy, Seattle City Light, SMUD, and Xcel Energy but its list of utility star power names spreads east to include Exelon’s Commonwealth Edison in Chicago and Dominion Energy in Virginia.

What is attracting these big boys in the utility business?  OPower gets results.  The company claims that at every utility where OPOWER Home Energy Reporting system has been installed, it has delivered between 1.5% and 3.5% in average energy savings across the customer base.

The other advantage is OPower says it can do the job for less than the average of $100 upfront costs from its competitors to install a home energy management solution.  How much less?  OPower’s back-end analysis, front-end mailer tip sheet method only costs about $10 per customer.

The other dirty secret to OPower’s success is that is does not even rely on the smart meter for the data to help its customers!

Huh?  Oh, if you have a smart meter OPower will incorporate it, but its basic methodology is a statistical analysis called Measurement and Validation.  I’ll spare you the geek speak, if you want to know more about its methodology check out its discussion of methods on it’s website.

So what?

Smart meters are the buzz today and the wave of the future for collecting and utilizing energy use information.  But there are other ways that seem to be meeting the needs of customers while providing a better user experience (UX), encouraging active participation and saving customers money.  This is something no smart meter alone is ever going to do.