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Redefining Customer Service is Essential to Modernizing Grid

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Cross post from the Energy Blog.

by Patricia Hoffman

When was the last time you talked to your electricity provider about something besides a service or billing problem? Put another way, does your utility ask for your opinion on its plans for the future? Do you feel like your concerns are heard?

There has been a lot of news lately about projects that focus on modernizing the electric grid, with some of it focused on legitimate concerns of customers that feel alienated and confused about what these projects mean for them. Electricity providers should respond to these concerns by communicating with customers about the grid modernization process. Electric cooperatives are widely considered industry leaders in customer service, and some investor-owned utilities have also demonstrated success (as mentioned below), so presumably there are lessons about customer outreach that all utilities could learn.

As the Assistant Secretary for the Office Electricity Delivery and Energy Reliability, I believe that utilities should explore redefining customer service in the electricity industry. Doing so is essential for the long-term health and growth of our electricity system. The success of grid modernization initiatives hinges upon the ability of electricity providers nationwide to respond to their customers' concerns and actively involve their customers in the process. This belief was confirmed for me when I heard customers' concerns first-hand at the Critical Consumer Issues Forum (CCIF) in Atlanta last month[1], and more recently at a panel discussion on "Critical Issues and the Need for Consumer Protection Policies" in Washington, DC[2]. With regard to a revised concept of customer service, there are two primary themes I have heard echoed repeatedly by members of both consumer advocate groups and electricity providers.

Improve Communication with Customers

As evidenced by the number of questions from consumers, energy providers must do a better job communicating with their customers. And notice I say "communicating with" and not "communicating to" - communication must go both ways. Oklahoma Gas & Electric (OG&E) and its "Positive Energy Smart Power Program" (funded partly by Department of Energy) serve as one prime example (among others) of the benefit of open and honest dialogue between a utility and its customers. OG&E is holding customer focus groups about this grid modernization project, which includes in-home devices like programmable thermostats. It's no surprise to learn that this project has experienced broad consumer acceptance; when customers have direct input in the process, and see that input having an impact on the direction of the project, they have more at stake in the project's success.

Efforts like the one at OG&E are building trust between the customer and the utility - something much needed - through the open exchange of ideas. More active customer participation in the process is leading to a better understanding of their energy consumption. Improved trust and increased knowledge are leading to other, more tangible benefits.

Educate Customers on What a Modern Grid Means for Them

Expectations are sky high about how "smart" the grid will become, but it's important that electricity providers educate customers about modernization so that expectations remain realistic. Yes, the future electric grid will give consumers options they haven't seen before when it comes to in-home energy management, but customers should also be educated about technologies that impact them but won't be seen in the home. Control technologies, for example, reduce outage time and improve reliability, while energy storage technologies help reduce the amount of energy that needs to be generated and make variable renewable energy sources (like wind and solar power) feasible. Fully realizing the potential of all these technologies will require from everyone involved both the effort to implement grid modernization (it's not as simple as flipping a light switch, after all) and the effort to educate consumers about its impact.

I'll leave you with an example of how customer-focused communication and education initiatives by providers result in measurable benefits like peak load reduction, savings on bills, and improved reliability. The Pacific Northwest Smart Grid Demonstration is experimenting with integrating both hydro and wind energy through several pilot projects. One pilot seeks to pay customers to use their water heaters to store surplus wind energy, while another pilot will conserve energy by using switches to cycle customers' hot water heaters during periods of peak demand. Finally, customers in Milton-Freewater, Oregon, will use in-home displays and programmable thermostats to manage their energy usage. City Manager Linda Hall described the relationship she envisioned with her customers in a recent New York Times article: "They can be more of a partner with us and get more control over their power bills," she said. "That's what I'm most excited about."

I couldn't agree more.

Patricia Hoffman is the Assistant Secretary for the Office of Electricity Delivery and Energy Reliability

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[1] "Focusing on Smart Grid from the Consumer Perspective" sponsored by the National Association of State Utility Consumer Advocates (NASUCA), the National Association of Regulatory Utility Commissioners (NARUC), and the Edison Electric Institute (EEI)

[2] AARP/Joint Center for Political and Economic Studies, http://www.jointcenter.org/

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