THE OLD ADAGE, "You can lead a horse to water ." seems to apply to utility customers with respect to their use of smart meter information and their actions to more prudently use energy. If managers believe their utilities can simply install smart meters and customers will automatically change the way they use energy, the findings of a 2011 IBM consumer study provide eye-opening evidence to the contrary. In total, 10,000 people in 17 countries were surveyed, and IBM found a startling lack of knowledge. "Thirty percent didn't understand the basics of their energy bill," said Michael Valocchi, vice president of IBM Global Business Services.
The report on the study's results contends that this lack of understanding leads to decision-making processes that depend on the evaluations of trusted advisers, rather than on understanding the clear choices made available to a customer by the smart grid and smart meters.
In many cases, educating customers and giving them the information they need requires the use of a middleman - a company that sits between the customer and the utility. The role of the third party is to help manage the large volume of data collected by smart meters, analyze the data to produce useful analytics about usage trends and correlations of usage with other factors, and present the information and findings to customers in an easy-to-understand way.
Certainly, utilities could do this work themselves. However, they would need the staffing and expertise to perform the nuanced analysis, integrate the data into their existing systems, correlate the findings with other data, and present the information to the customer through, for example, a personalized Web portal.
For help, utilities are relying on software vendors such as IBM, Oracle, SAS Software, SAP and others, whose products are currently used in their back office operations. Or, they are turning to third parties that bring an added dimension to address these challenges.
One example of this middleman role is an ongoing effort between IBM and the Republic of Malta's government-owned utility. The joint project found that deploying smart meters needed to be coupled with new presentations in billing that focus on the concrete steps to be taken to improve conservation.
This falls in line with the findings of the IBM survey, which found that customers, in general, and younger customers, in particular, were much more inclined to change usage based on the consensual decisions of their social circle of friends rather than on the traditional financial motivations being offered by energy providers. Thus, utilities must find ways to tap into that social aspect of customer decision-making.
To that end, IBM helped create an online smart energy portal that explains conservation in easy-to-understand terms and that provides the tools for measuring a customer's progress in energy savings compared with their peers' progress.
Focusing on the social aspect of customer decision- making is the forte of Opower, another one of the middleman companies. Opower has teamed with roughly 60 utilities, including eight of the 10 largest in the United States. It has access to data from more than 40 million smart and traditional meters, and it delivers information to more than 10 million customers in North America.
Like IBM, Opower marries smart meter data with other information and then uses advanced analytics to develop customized messages for consumers. For example, using statistical algorithms and multivariable regression analysis that combines energy usage, housing and weather data, Opower estimates the amount of heating and cooling energy used by each household without the need for an in-house monitoring device. Thus, instead of learning that a household used 10 percent more energy overall than their neighbors, customers can discover that they specifically used 30 percent more energy on heating, and therefore may need furnace maintenance or new insulation, or may need to set their thermostats to a lower temperature.