How to Establish Clear Customer Value with your Customer Engagement Solution
In 2010, Baltimore Gas & Electric, an investor-owned utility, put together a plan to implement an advanced metering infrastructure (AMI) meter reading system for 1.2 million electric customers and 640,000 gas customers. The price tag? A whopping $835 million that would inevitably be passed through to customers. The good news, the utility highlighted, was that the project could qualify for $200 million in ARRA stimulus funds.
It’s an understatement to say that BG&E got a little push back from its customers. Even the Maryland Public Service Commission said, “Whoa….not so fast.” Phil Carson, wrote in the Intelligent Utility Daily, that in order for BG&E to win approval, “Maryland regulators insisted that the utility establish clear customer value for its AMI project.” 1.
So how did this enormous utility “establish clear customer value?” They had to do the following for each customer:
- Purchase and install a smart meter
- Provide customers with “access to their energy use data via an online tool.”
According to Carson, “the utility will introduce a ‘smart energy management program,’ which will provide Web-based access to energy use information for customers who’ve received their interval meter. In July 2013, customers can opt for peak time rebates.”
What’s most notable about the PSC ruling is that this $835 million project establishes clear customer value only when customers can access and use the data that the AMI system will be generating. It’s not enough that the meter system will reduce the number of meter readers. It’s not enough that BG&E will be able to troubleshoot problems remotely. It’s not even enough that the utility claimed customers would save $2.6 billion over an undetermined time period.
The linchpin argument that earned BG&E PSC approval, was linking the metering system to a customer engagement solution. This example, more than any I’ve seen previously, shows the power of making utility usage data and information available to consumers. And if it applies to electricity and gas, it definitely applies to water.
The article goes on to say that BG&E organized internal brainstorming sessions for several of its departments with the intention of finding “value cases.” These value cases would show “how business operations and practices could be improved by using data analytics from advanced meter data.”
So not only would the utility use its AMI data to engage consumers and enhance customer service, it would find ways to improve operational efficiencies and lower costs.
The BG&E team came up with an assortment of value cases that included:
- Individualized load profiling
- Revenue protection
- Improving AMI operations (particularly security)
- Improving distribution system operations and planning.
My favorite, however, was the improved ability to target “customers for energy efficiency programs.” This has powerful implications for water utilities because targeting can increase water savings results from commonly implemented conservation programs, and enhance return on investment (ROI).
The Maryland PSC clearly understands that by providing utility customers with access to their consumption data and showing when that usage is occurring, customers can reduce their usage or shift it to less expensive time periods. These shifts serve to drive down peak demand requirements for the entire service area.
Moreover, giving customers the tools they need to better understand how they’re consuming utilities, can have a positive impact on reducing waste, improving energy efficiency, and getting people engaged in conservation.