Utilities Have Chance to Make Life Simple for Customers
AUSTIN, Texas — Parks Associates’ annual Smart Energy Summit attracted more than 100 industry representatives to the state capital, home to Silicon Hills and a vibrant technology environment.
Attendees participated in workshops and panel discussions on new roles for utilities as U.S. households adopt smart technologies, creating new layers of competition and complexity for home services, grid operations and energy management.
It’s not just about “customer engagement” but making everything easier for the customer, agreed a panel discussing new ways utilities can expand their footprint beyond traditional energy services.
“If you send someone a switch that requires a screwdriver … well, the vast portion of our population doesn’t use a screwdriver. They hire someone who uses a screwdriver,” said Joel Miller, a principle supervisor with DTE Energy. “Can the utility now become the homeowner’s handyman? We don’t know that yet.”
“We have to think like Netflix; we have to think like Amazon and make the customer experience easier and easier,” Tendril CEO Adrian Tuck said.
“Everybody is selling something smart … consumers have all these options,” said Todd Rath, marketing services director for Alabama Power. The consumer “doesn’t want 12 different apps. The opportunity for utilities is to combine all these things.”
Case in point: Alabama Power’s Smart Neighborhood initiative, in which the utility partners with Alabama homebuilders to build energy-efficient, smart neighborhoods. Its first neighborhood in the Birmingham suburbs integrated “high-performance homes, energy-efficient systems and appliances, connected devices and a microgrid on a community-wide scale.”
“It was not an energy efficiency or microgrid project, but a living lab to understand how those things work together,” Rath said.
To do so, the 62 homeowners had to all agree to a 24-month research project in which all the data would be collected. Rath said Alabama Power learned “some things are good, some things are bad.”
“We think the future is going to be [distributed generation] and connecting to that DG to maximize the grid and customer experience … seamless integration,” he said. “That all sounds good when you talk about it, but when you try to implement it, things come up that you’re not aware of.
“I don’t think we’re going to out-Amazon Amazon. We’re looking to advance electrification, to find a way to help customers understand the next generation of the grid,” Rath said.
“We believe the utilities are in a great position to do so much for the customers. They just need the tools to reframe the relationship,” Simple Energy’s Judd Moritz said. “If you do it right, you make the utility central to every decision the customer makes. You will become one of the largest retailers of smartphone-enabled technologies in America.
“We have that trusted adviser role,” Miller said. “We want to ensure we’re continuing to do that.”
Gen Z a Growing Consumer Group
Aaron Berndt, the head of Central Region Energy Partnerships for Google and its Nest company, said utilities should be learning how to connect with Generation Z, so-called “digital natives” who were born in 1997 or later.
“They live and breathe technology. They’re really focused on customization and personalization,” Berndt said during his keynote address, noting Gen Z members represent $44 billion in buying power and are just now entering the job market.
By 2020, he said, Gen Z will be the largest consumer group in the U.S.
“There’s room to grow in this area. Utilities lag other industries in digital experience,” Berndt said.
He said the next great change is in artificial intelligence, “which shows up to consumers through voice and voice assistance.” Google has “made available” 1 billion voice-enabled devices — cars, phones, watches, TVs — over the last 18 months, Brendt said.
“It’s simplifying and reshaping the way consumers engage with technology,” he said.
Turning Distribution Utilities into DSOs
Energy-efficiency expert Ken Wacks suggested utilities embrace a new role as distribution service operators (DSOs).
“The distribution system has been static, but that is changing because distributed energy resources are proliferating at the edge of the grid,” Wacks said. “We think a [DSO] is an opportunity for utilities to make money from DERs by using the equipment that is already in place and letting the customer generate and sell energy via the distribution grid to the utility or to other customers.”
Wacks should know, having been appointed by the Department of Energy to four terms on the GridWise Architecture Council and contributing to its work to ensure reliable and efficient distribution of electricity while accommodating DERs.
“Utilities have to figure out how to let customers use the grid, how to price the grid and how to use equipment on the grid. Some of these equipment items today can’t handle the backflow or excess energy, so that requires active management of the distribution grid and possible equipment upgrades. Intelligence in homes and buildings will help customers manage DERs and power flows to the utility or to other customers via the distribution grid,” Wacks said.
The technologies to affect this change are emerging now, said Dane Christensen, National Renewable Energy Laboratory team lead for residential systems performance, ticking off thermostats, water heaters and batteries as examples.
“In five years, we’ll see the same transformation as we did from the flip phone to the smart phone. We’re trying to understand this potential of enabling other value streams,” he said. “When you look at a smart home, price is not the goal of a new product. The No. 1 goal isn’t to save money. It’s convenience and access to data.”
New York’s Consolidated Edison is on its way to becoming a DSO “the same way an RTO operates,” said Shira Horowitz, the utility’s demand response manager. She said the move is necessary to accommodate a high number of renewable DERs.
“We’re able to balance these renewables with demand response and batteries and other dispatchable distribution resources,” Horowitz said. “Demand response and some other dispatchable resources can prevent cascading failures. … Our demand response programs are used to manage the distribution system, as opposed to others using them for peak shaving or something else. We’re able to respond to distribution-level contingencies and events with distribution resources.”
Panels Discuss Value of Green Homes, Data
Several panels discussed energy-efficient, net-zero homes and their potential for storage, and what that means to grid operations.
“Don’t underestimate the power of the consumer,” warned Austin Energy’s Debbie Kimberly, the utility’s vice president of customer energy solutions and corporate communications. She said an average of 4,400 homes are built every year in Austin, “fully 30%” being Green Building homes that increase by $35,000 in value over non-green homes.
“That was really driven by consumer preferences,” Kimberly said. “It’s like, ‘I’d love to be able to remodel my home, if I could only get all those devices to talk to each other. I want an app to control my apps.’”
“There’s a true value proposition to having a home with a true energy experience,” Inspire CEO Patrick Maloney said. “You will find a set of consumers that highly value purchasing a home that feels like owning a Tesla, because no one [understands] kilowatts. If you want to have an impact on the greenhouse gas issue, zero-net homes are really a massive tool. We have to figure out how to create integrated service offerings. … I’ve never met a person who wanted to change their behavior willingly.”
Abhay Gupta, CEO of data consultant Bidgely, said AI may provide the key to the utilities’ challenge of optimizing their costs, adding revenue and “personalizing customer engagement.”
“Change will happen. It’s inevitable,” he said. “The question is, are we going to be ready for the future? Netflix and Amazon understood what they do, but do utilities? Something has to be done about massive aggregation. If you can unravel what’s happening in the home, you can get the same amount of information that Netflix gets.”
“For meter data to be valuable, we need it to become more granular,” said Matt Johnson, vice president of business development for EnergyHub. “One of the things that excites us about meter data is the potential — when marketing programs to customers — of being able to take advantage of that and get that data to impact the load-management side of the equation.”
— Tom Kleckner