Smart Meters and Consumer Engagement webinar

Don’t leave your customers behind:Explore secrets to demonstrating smart meter value for customers

Thursday, 15 October 2015

Today’s topics

1 | State of deployments: Globally and ANZ

2 | Smart meter engagement: Learnings

3 | Smart meter engagement: A framework

4 | Putting it all together: A blueprint for success

5 | Visions for Customer Engagement in the Utility Industry

VaasaETT overview

Supporting Consumer Centric Energy Markets & Solutions

Consumers Markets Offerings

CONSUMERS 18 years of ground breaking research into energy consumer behaviour in liberalised energy markets

MARKETSNearly Every liberalised market (and others) tracked since the onset of competition.

OFFERINGSMonitoring of what is offered to consumers around the world, how and with what success.

VaasaETT overview

VaasaETT overview

VaasaETT has researched or assisted over 100 customer engagement programmes around the world

State of deployments: Overview

Source:

State of deployments: Europe

• 80% smart electricity meters by 2020 (approx. 200m elec. smart meters and 45m gas)

• Total installation estimated 154.7 million by 2017.

• Consumer response mixed

• Websites, emails, information campaigns, newsletters, site visits and phone calls etc. at time of installation of a new meter are the most common type of consumer communication

Source: European Commission, 2015

State of deployments: USA

Expected smart meter deployment by US state in 2015

• >50m smart meters deployed in the U.S as of end 2014.

• 30 of the largest utilities in the U.S. have fully deployed smart meters

• Several states have implemented policies that allow customers to opt out

• The number of customers that have officially requested to opt-out of a smart meter installation is low (according to IEI 2014 Smart Meter survey)

Source: IEI 2014, VaasaETT Analysis

State of deployments: ANZ

AustraliaNEM(non Vic)

• New rules in 2017• Opt-out for new meter (new

homes, upgrades and replacement)

• Opt-in for the rest (mostly related to the new offerings)

• NSW has recently announced a voluntary market-led rollout.

• AGL has started rolling out prior to the new Rules in South Australia

Victoria • Completed the full roll-out• 2.8 million meters installed• Mandated roll-out

Result Very negative in VIC, Negative elsewhere so far

New ZealandStatus • 1.26 million smart meters deployed

(about 72% of the total meters)• Commenced in 2015; expected to

complete in 2018• Averagely 17,000 meters/month

Approach Market-led, Opt-inResult • Generally positive on public

feedback and ROI• Limited resistance from a few minor

groups (e.g. conspiracy theorists)

Audience Question #1

In your view, which area will see the most significant value from current and future smart meter deployments in Australia and New Zealand?

1. Customer-driven value added services2. Demand side management3. Operational savings and grid reliability4. Integration of renewables & distributed generation

Today’s topics


2 | Smart meter engagement: Learnings




Negative Impact of Smart Meter Deployments

Post Roll-Out Campaigns Don’t Really Work

Because Customers Are Pre-Disposed

• Automatic outage detection, restoration and SMS notifications

• Accurate Bills (not estimated)

• In-home display

• Energy alerts

• Cheaper costs when moving house

• Smoother switching between retailers

• Flexible pricing

• Smart appliances / smart thermostats

• Solar: monitor what percentages of solar and mains electricity you are using and change usage patterns to take advantage of your solar generation.

• Allows power companies to sack thousands of meter readers, increase charges and remotely control electricity supply for their financial advantage.

• Give no real benefits for customers who have paid power companies over $2 billion towards the cost of meter installations.

• Allows power companies to force peak tariffs charges onto customers, increasing the costs to people who can least afford it.

• Allows power companies to remotely control home appliances.

• Cause thousands of people who are sensitive to microwave radiation to suffer health ailments including headaches, insomnia, heart palpitations, ringing in the ears, fatigue and other health issues.

Only Experience Changes Perceptions

Storuman Energi, Sweden

Flick, New Zealand

Tempus, Great Britain

Origin, AustraliaChamelian, UK

Only Experience Changes Perceptions

Source: AGL

Source: Opower & Mercury Energy

Mixed success, huge potential

Source: ADVANCED FP7 Project, 2014

Insights which questions old beliefs…

DO NOT JUST FOCUS ON HIGH BILLS

Simply paying attention to energy use because of a high cost actually reduces a customer’s propensity to participate in Active Demand programs…


Insights which questions old beliefs…

FOCUS ON PERSONALISED UNDERSTANDING

Only when the communication effort was personalized and a better understanding about energy consumption achieved did people become positive about smartening their energy usage…

Insights: What Works?

1. Segmentation 2. Harvesting data3. Communication

a) Simpleb) Linked to behaviourc) Not primarily about savingsd) Not primarily about being greene) But by taking the customer’s concerns seriouslyf) Non-stop journeyg) Do not promote the smart meter as the benefit but the benefits as the smart meterh) MAKING IT FUN & Fashionable - Something to shout about

4. Preparation for changes not only within the minds of the customers but also internally in the organizations of your industry

5. Before, during and after smart meter roll-out

17.3% Circulation of Newspapers(drop from 2001 to 2008)Source: Newspaper Assn of America

18% Number of households saying ”no” to paper ads Source: Post Danmark

10%Network TV Viewership(drop in 2009) Source: TV Report

14.2%Household Telephone Usage (drop in 2009) source: ITU World Telecommunication

21%Yearly e-mail growthsource: Forrester

1.3 bio Smart Phones shipped in 2014source: IDC

2.8 bioGlobal Internet UsersSource: Internet World Stats

1.5 bioFacebook usersSource: Internet World Stats

Insights: Dynamic Engagement for Changing Behaviour

Digitalisation has changed the way we interact from business driven to customer driven and from single channel to multi channel.

Non-activeActive

IndifferentActive OppositionalModerate

ConcernedGreen

Not concernedAnti green

Listen to the man in the street I have lots of other things to care about

Progress is good, but one step at a timePower by the people – let’s get into actionWhich actually is an enabler for starting a dialogue……


SEGMENT UTILITY ROLE COMMUNICATION

Comfortable Advisor

Step by step explanation, constant reassurance, not too many words. Easy to understand diagrams

Active GuideFeed back programs, analysis, follow up, recommendations – applauding - very personal

Moderate Coach

Asking questions – giving answers. Encouraging, status on environmental benefits

Oppositional Teacher

Calming down, reassuring. Telling what to do and explaining. Positive words, giving way, understanding, small steps at a time



2 | Why smart meter engagement?




Today’s topics

WORKING WITH

98 utilities

PROCESSING DATA FOR OVER

58 million homes & SMEs

ANALYZING OVER

400 billion meter reads

Continuous value creation

Post-installation engagement

Roll-outcampaign

A framework for smart meter engagement

Pre-deployment education

Proactively engage customers and the community prior to installation to gain consumer trust

Proactively engage customers and the community prior to installation to gain consumer trust

Establish baseline energy management tools enabled by interval data

Make customer engagement a priority as additional smart meter-enabled technologies and programs are available

6 months prior 4 weeks prior 4 weeks after Ongoing

Engagement results in greater value for customers, as well as measurable business value

Increase customer loyalty

Decrease cost to serve

Enable demand side management

Increase adoption of new products

and services


Post-installation

engagement

Roll-outcampaign


Gain consumer trust by proactively engaging the community prior to installation



Roll-outcampaign


6 months prior

CASE STUDYAwareness and community engagement campaign

Phase I: Raising awareness Phase II: Direct engagement

Launch of interactive website

Phase I local newspaper advertising

Phase II local newspaper advertising

Public transit advertising

Campaign events

Maryland, USA

Pair the hardware installation with an education campaign



Roll-outcampaign


4 weeks prior

CASE STUDYSmart meter value education & tools introduction

4 weeks before installationPost card introducing

Smart Meters

during installationSmart Meter benefits

door-hanger

4 weeks after installationOpower report &

welcome insert

5 weeks after installationEmail

reminder

Result: Greater customer understanding of investment value and acceptance

I have a good understanding of smart

meters and their function

I have a favourable opinion of

smart meters

My smart meter has given me personally

useful information

47%40% 42%

62%54% 57%

Control Opower Report Recipients

+15% +14%



Roll-outcampaign


4 weeks prior

+15%

CASE STUDYSmart meter enabled alerts + self-service insights

Establish baseline energy management tools enabled by their new smart meters

4 weeks after



Roll-outcampaign


Customer satisfaction

5% increase in overall customer satisfaction

Call center reduction

19% decrease in high bill calls during highest volume months

CASE STUDYSmart meter enabled alerts + self-service insights

Weekly AMI emails Smart meter insights via web



Roll-outcampaign


4 weeks after

Establish baseline energy management tools enabled by their new smart meters

CASE STUDY 1Proactive TOU engagement

Ongoing



Roll-outcampaign


Make customer engagement a priority as additional technologies and programs are enabled

CASE STUDY 2Solar net metering self-service

Audience Question #2

Which of the four stages are the most important for your business in the next 2 years?

1. Pre-deployment education2. Rollout campaign3. Post-installation engagement4. Continuous value creation


2 | Why smart meter engagement?




Today’s topics

Three requirements for a successful deployment

Qualify the business case for a smart meter deployment1

2 Establish the underlying technology platform

3 Execute on the smart meter engagement framework

The business case for the investment greatly improves when customer value can be created

Costs

Operational

savings

Customer-d

riven benefits

$- $50

$100 $150 $200 $250 $300 $350 $400

Total NPV benefits per smart metered home (20 year life | USD)

Incremental customer engagement investment

($46)

Technology + installation

($237) $148

$130

Incremental customer engagement benefit

$103 NET BENEFIT

$41 per smart metered home

NET BENEFIT

$98per smart metered home

One technology platform equipped to delivera customer experience during all framework stages

Today’s topics


2 | Smart meter engagement – Reasons and Realities




Visions & Trends: New Energy Lifestyles

Visions & Trends: Communities & Platforms

Visions & Trends: Community Lifestyle Platforms

Visions & Trends: The Missing Factors?


Calculus


X Factor Italy / ENEL Coolness


Closeness

Thank you.