In December 2011, National Grid submitted an updated proposal to the Massachusetts Department of Public Utilities for a 15,000-customer smart grid pilot in Worcester, Massachusetts, U.S. As this is written, National Grid awaits a decision on the pilot from the Department of Public Utilities (DPU). The utility's updated filing relied heavily on its unique approach to customer engagement.
Central to this approach was the utility holding the Green2Growth Summit in conjunction with the city of Worcester. This two-day summit brought together customers of all backgrounds, community leaders, regulators, government officials, the city and utility executives to better understand how energy underpins customers' lives. National Grid learned some key lessons from the summit and used the information to update its proposal to the Massachusetts DPU. Elements of the enhanced pilot were based on customer and community feedback gathered during the summit.
In June 2008, the Massachusetts legislature enacted the Green Communities Act. Among other things, this bill required Massachusetts investor-owned utilities to submit smart grid pilot proposals to the Massachusetts DPU. The goal is to achieve a 5% reduction in energy use on average and during the peak. In April 2009, National Grid submitted its initial proposal for a smart grid pilot the utility hoped to implement in Worcester. The original 2009 pilot included plans to use the best-available technology at the time. It has since withdrawn the 2009 proposal and resubmitted a bold new update.
The Way it Was
Traditionally, utility customers have been passive buyers of electricity; it is a service that is an afterthought among the larger financial obligations everyone has to deal with on a daily basis (for example, mortgage, fuel and food). Most customers only interact with their utility when they have a bill complaint or a power outage. To make matters even worse, most customers have no way of knowing how much energy costs when they turn on a light switch versus running a microwave oven. Combine this with the fact customers receive their bill one week to six weeks after they consume electricity. There also is the situation where the sale of energy is a one-way transaction.
Smart grid initiatives are beginning to change all of this. Finally, customers are beginning to have choices: a choice in how and when they use energy, as well as a choice about how energy is made.
In 2009 and 2010, there was strong consumer backlash to numerous smart grid pilots across the United States. In studying the primary drivers behind this response, National Grid quickly came to understand the issues were driven by the notion that customers felt something dramatically different and unexpected was being foisted on them — something they ultimately would have to pay for, yet had no idea how it would benefit them. There was simply too little information being provided, making it difficult for customers to become involved and feel comfortable about these pilots.
It was clear strong customer engagement would be critical to the overall success of any smart grid pilot, but the industry was struggling to figure out how to achieve the necessary engagement.
Sensing the Need to Change
The criticism about smart grid projects across the country was unequivocal evidence National Grid needed a new approach to engage its customers and more intimately involve them in the rollout of its smart grid pilot program.
By 2011, it was clear the pilot that the utility originally proposed in 2009 was already out of date. The industry had already learned many lessons, and National Grid needed to incorporate them into its pilot. Additionally, the economic meltdown at the time left the economics of the proposed pilot at risk. This, combined with customer criticism across the United States led National Grid to make a bold move and withdraw its pilot proposal from consideration by the Massachusetts DPU. The pilot would need to be designed with the customer at the center. To do that, National Grid needed a whole new approach.
Community Informs the Smart Grid Proposal
National Grid partnered with David Cooperrider of Case Western Reserve University. Most think of change in terms of top-down or bottom-up. Cooperrider discovered a third type of change. His research focuses on change at the scale of the whole. Using his techniques, 300 to 1,500 people can come together to do strategic planning. It is an innovative approach.
In partnership with the city of Worcester, National Grid decided to hold a community summit in September 2011, entitled “Green Today, Growth Tomorrow: Transforming Worcester into the Innovative Energy Leader of a Smarter Commonwealth.” The core concept was simple: Build green into everything the state and Worcester do, and then economic growth will follow. Worcester was a great place to do this, as it already has a rich history of innovation and green growth. As National Grid prepared for the summit, it identified in the city of Worcester a solar-powered car wash, a school that allows students to have solar-powered popcorn on sunny days and a community culture of sustainability.
The two-day summit was an opportunity for the Worcester customers of all descriptions along with regulators, government officials and utility workers to come together to co-design the future of energy and, ultimately, sustainability in their community. In fact, smart grid, for its own sake, was not on the agenda. Instead, sustainability and technology were discussed as a means to provide feedback from stakeholders on how they could make intelligent choices about reducing and deferring energy usage.
Everyone quickly embraced the notion they could work together to make a difference in their community's environmental and economic future. What became clear to everyone present, even the skeptics, was a groundswell of support arose when people were brought together to share ideas and apply their creative energy. National Grid was able to take some of these ideas and energy, and apply it to the overall pilot proposal in addressing how to enable the community's goals.
From the summit, National Grid understood its customers wanted a use a listen, test and learn approach to optimize customer engagement. Further, customers wanted National Grid to be more open to two-way communication to better understand what motivates customers and determine what else is needed to help customers achieve their goals.
National Grid heard that everyone wanted to participate — from low- to high-income residential customers to small-business customers. The utility also heard it needed to create a Sustainability Hub where people could come and try on smart grid concepts and technology, learn about energy and possibly get training or jobs. The utility heard people were in support of a green declaration of independence. An added bonus: the energy in the room was extraordinary.
The unified customer voice heard at the Green2Growth Summit helped National Grid develop a highly customer-centric approach to the smart grid. One key lesson learned is this process needs to start long before the pilot is launched. Engaging customers and stakeholders prior to the launch has proven to be critical in generating support, paving the way to a successful rollout.
What follows are some critical lessons learned in this process and steps National Grid recommends all utilities think about as they prepare to roll out smart grid projects.
- Establish customer trust
This seems to be an obvious piece of advice, but customers must clearly understand the what, when and why of the project and see how it will ultimately benefit them. Timing for this is critical. Installing technology prior to gaining trust and buy-in has often led to confusion and customer backlash. Customers are empowered when they have a greater understanding of how the smart grid will give them more choice and control.
- Use local community partners as ambassadors
Community-based organizations can be a utility's most powerful allies for smart grid projects. School parent-teacher organizations, faith-based groups, neighborhood associations and other community-based groups are all concerned with the well-being of their communities. Bringing them into the fold can help convey critical information to larger groups. As customers see peers and neighbors involved, it is more likely they will be better equipped to participate and engage.
- Use multiple communications channels
Utilities need to reinforce their messages across multiple mediums. Tailor the channels to fit the need as well as the preferences for how a community consumes information.
- Knowledge is power
Customer-facing employees, including call centers, field operations and so forth, need to serve as ambassadors of the utility. This means they should be provided with updated messages on a regular basis so they can communicate effectively with the community and answer questions as they arise.
- Instill a sense of excitement
The Green2Growth Summit reinforced the belief that involving the community to co-create solutions will result in better pilot success. Customers want to feel intimately informed and involved in the decisions that will impact their lives. Taking a proactive and positive approach to the pilot instills a sense of ownership that can ultimately be the deciding factor in a pilot's success or failure.
- Engage customers as partners in change
Viewing customers as partners provides a deeper level of engagement and a sense of an ongoing relationship. Utilities should champion customers who are successful in developing energy-saving behaviors, showcasing this progress to the broader community.
- Communications should provide specific value
During the pilot launch, messaging resources need to shift toward providing practical tips and opportunities that can generate greater energy savings, comfort or customer convenience.
- Proactively extend technical support
Face-to-face interaction can help create and maintain customer engagement momentum. For customers with smart grid technology installed in their home, invite them to demonstrations and how-to events to provide more information on how they can fully leverage the technology and the benefits of the smart grid.
- Host a steady cadence of events and communications
Continued communication creates and maintains trust with the customer, resulting in deeper engagement.
- Measure key indicators
Tracking indicators such as opt-in rates, event attendance and customer help-line calls provide valuable insight into potential areas of concern. These indicators should be reviewed every two weeks, especially prior to and during deployment. These indicators also provide a better sense of what is working, where more resources can be allocated and what initiatives need to be scaled back. It also is a great way to provide customers with transparency on the project.
- Share success stories
This is an important aspect of post-launch strategies. Customers want to hear success stories about their peers. They want to know the project is helping the community attain their collective goals. Sharing success stories demonstrates peer engagement and the ease of use of new technologies.
The Partner Customer
National Grid also heard partnership is a key success factor. Since filing its original 2009 pilot proposal, the notion and possibility of all kinds of partnerships had become possible and desirable.
For its updated pilot proposal, National Grid decided not only would it partner with its customers and the city of Worcester, but also with universities, students, government, renewable technologists and vendors such as Verizon, Sears and Best Buy. The utility also decided to include the Sustainability Hub in its new pilot proposal. If the pilot is awarded, the utility plans to partner with two universities in Worcester to make it a reality. National Grid will be bringing green jobs by employing interns and getting all age levels involved.
After several years of starts and stops, it has become clear customer engagement is the key to unlocking the value of the smart grid. Engaging customers and stakeholders prior to, during and after the launch is critical to the overall project success. As a result of the great success of the Green2Growth Summit and other customer-focused initiatives, National Grid is looking to host similar events as it continues to roll out smart grid projects to benefit customers.
Only through deep engagement can change come to the long-established, outdated culture of one-way communication with customers. This is the key to modernizing the grid and helping everyone save on electricity while creating a more sustainable environment for communities.
Edward H. White Jr. ([email protected]) is vice president of customer and business strategy at National Grid. His team provides product expertise, creates energy-efficient solutions, ensures regulatory coordination, and develops new products and alliances. Prior to his current role, White successfully led a team that developed the National Grid's largest distributed solar installation project and also was the U.S. lead on developing the utility's energy management strategy. White has been with National Grid for more than 15 years.
Cheri Warren ([email protected]) is vice president of asset management at National Grid. Her portfolio includes not only smart grid, which has been rebranded as utility of the future, but also the U.S. transmission and distribution electric assets. Her team develops capital plans for National Grid's four jurisdictions in the United States. The team also develops maintenance policies and strategies, defines asset information governance, develops performance prediction models, conducts RD&D and sets future asset and system strategies.
Case Western Reserve University | www.case.edu
Green2Growth Summit | www.Green2Growth.com
National Grid | www.nationalgrid.com