Utilities must think like a retail company when it comes to demand response

Credit: Somsak Dalad

The few utilities that have achieved high levels of awareness and usage are not only meeting customer needs, they are benefitting from associated lifts in customer satisfaction and trust, the study notes. The report — a national sample of 25,812 consumers — is designed to help utilities understand and improve adoption of energy consumption and smart energy technology among residential customers.

Meanwhile, few utilities have managed to capture this demand. With the exception of mail-based energy usage analysis, which itself struggles to reach 20 percent, most demand response programs are currently utilized by less than 10 percent of consumers nationwide. Low usage levels can be tied to the fact that most consumers have heard of only one type of program; one in three (37 percent) are unaware of any programs offered by their local utility.   When asked about their level of interest across eight consumption management programs, the majority of utility customers (83 percent on average) express interest in at least one program. Interest is highest for appliance rebates (61 percent) and time-of-use incentives (59 percent); however, interest in tools, particularly those delivered in digital format, is also high — with about one in two customers expressing interest.

“While clearly the goal should be to increase demand response program usage, merely increasing interest provides significant benefits to utilities,” said Chris Oberle, senior vice president at Market Strategies International. “Utilities that successfully educate customers about the features and benefits of demand response programs get a boost in customer satisfaction and trust levels.”

Further hampering utilities’ ability to maximize adoption of demand response programs is the fact that most customers lack a sense of urgency. While upwards of 50 percent of customers are interested in programs once made aware, few say they are likely to adopt programs in the next six months.

“We have found that utilities that approach energy consumption management programs with traditional product management discipline have the greatest immediate demand and product usage experience for these programs,” Oberle said. “This includes planning, budgeting and managing a targeted marketing effort like any retail company would.”

The study also assesses customers’ perceptions of their local utility on its efforts to educate, motivate and deliver on programs. A small number of utilities in each region of the country have managed to achieve high awareness and usage levels as well as accolades from their customers on three of the eleven metrics, including clearly explaining the programs they offer, having programs that are easy to enroll in, and encouraging online services and formats.

The report names PPL Electric Utilities, Salt River Project, DTE Energy, and CPS Energy among the country’s regional and national program leaders.


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