The relationship between electric utilities and their customers is evolving rapidly—what has been a very stable relationship historically is transforming into yet another element of instability for utilities. The same technology changes that are triggering Smart Grid transformations inside utilities are acting on the customer base of utilities, offering an array of new solutions and alternatives for receiving and managing electricity. But utilities and customers have widely different perspectives of Smart Grid, as is evident in proceedings that challenged Smart Grid plans in California, Texas, Maine, and Maryland over the past two years. Listening to those arguments could make one wonder if the opposing sides were looking at the same set of facts.
But as the graph below shows, what is really happening is that various segments of electric utility customers are evolving their perspectives at different rates, and the more emotional arguments often come from the low end of the maturity scale outlined below—in other words, the debate is too often based on fear and ignorance than it is on facts and rational arguments. It is to the utility’s advantage to understand the evolution of customer perspectives and stimulate a more mature, informed outlook among its customers.
In Chapter 7 of The Advanced Smart Grid, we talk about the maturing smart energy consumer using the above graph, which we call the Smart Consumer Maturity Model, borrowing from the approach taken by IBM and associates to create a Smart Grid Maturity Model a few years back (now managed by the Software Engineering Institute at Carnegie Mellon University). We propose that smart consumers may be organized just like IBM did with utilities, based on their relative maturity in progressing from passive and ignorant Consumers to responsive and committed Prosumers. A key challenge for utilities will be the dynamic nature of this maturation process: utility/customer relationship and communication strategies will need to shift as customers mature, with the utility recognizing these different maturity levels and adjusting the communication strategy to accommodate the shifting ratio of customers at each stage of this maturation curve.
Historically, most electric utility customers—Consumers in the graph—have been relatively passive and ignorant, content to pay their bills and use electricity by plugging in appliances and flipping switches. That was all that was asked of them, and few had reason to understand in any detail where electricity came from, or even less, the delicate balancing act performed from minute-to-minute by control center operators. But as utilities promote demand response programs and smart thermostats, and as technologies like home energy management systems, solar PV panels, and electric vehicles become increasingly available, some customers become more aware, progressing to Smart Consumers, now curious to understand the changes about them and new opportunities coming their way.
Now motivated to manage their personal load in new ways (and now able to relate to their utility in new ways, as well), Smart Consumers evolve to Active Consumers when they decide to act on their newfound knowledge—whether it is participating in a utility program, replacing incandescent bulbs with CFL light bulbs, or any of a variety of other steps, they have evolved to a new level of maturity. And when an Active Consumer decides to participate in a utility demand response program to help shave the peak curve and avoid high cost production, she evolves to a Partner status. Bringing consumption into harmony with production is a long-sought goal of utilities—after all, were more consumers to truly understand the dynamics and shift their load off-peak, the system would operate much more efficiently.
Finally, when a consumer begins to deploy distributed generation and meet some of her own electricity needs without using the grid, we use the term Prosumer, a term originally used by Alvin Toffler to describe a consumer who also produces. At this stage, the consumer becomes even more aware and mature, monitoring the production from the on-site facility and adjusting personal consumption to bring it into harmony with personal production.
As long as the majority of consumers remain at the first stage, their objections to utility programs are likely to be rooted in fear-based ignorance. Passive and ignorant, yet utterly reliant on electricity, they are more likely to fear change and suspect the utility’s motivations and discussions on changes in rates and other changes become skewed and less effective. Such misperceptions provide utilities ample motivation to begin now to accelerate this learning curve with education programs and other forms of outreach, so that down the road their customers are no longer surprised and fearful when future changes are put into place. It will be to a utility’s benefit to spend time understanding consumer perceptions and educating them to allay fears and support future fact-based dialogue. Finally, utilities should encourage early adopters to move more rapidly up the maturity curve, to provide consumer-based leadership, showing the way for other consumers to mature.
