Many observers predicted earlier this week that the commission would create a program that included an option for customers to keep their legacy, analog meter, as well as the ability to choose a smart meter with its wireless capability turned off among other options. After all, that’s what the Maine Public Utility Commission did in May – required Central Maine Power to initiate an opt-out program with four options.

But what the California commission did today was initiate an opt-out program with analog as its only option.

Customers electing to retain or return to an analog meter will be assessed an initial fee of $75 and a monthly charge of $10. Customers enrolled in the CPUC’s low income program – California Alternate Rates for Energy (CARE) – electing to opt-out will be assessed an initial fee of $10 and a monthly charge of $5.

The decision ends PG&E’s smart meter installation “delay list.” Customers on that list have about 30 days to ask to participate in the opt-out program or their analog meter will be replaced with a smart meter.

Today’s decision came during a somewhat verbally quarrelsome meeting this morning which started with a public comment period of about 90 minutes, during which 60 or so smart meter opponents voiced their disapproval of the devices. The proceedings were broadcast live on the internet here.

CPUC President Michael R. Peevey then began to speak about the benefits of smart meters, including their vital role in creating a nation of “fully empowered energy consumers.” As he spoke, many in the crowd erupted with shouts such as “Lies! Lies!” Peevy repeatedly asked the attendees to show the commission the same respect they had shown by quietly allowing complainants to speak about smart meters.

Peevey spoke about the study by California Council on Science and Technology (CCST) released early last year, which reported that smart meters “result in much smaller levels of radio frequency exposure than many common household electronic devices including cell phones and microwave ovens.”

“Wrong!” came the yells. “Why are you reading it to us? It’s wrong!”

Peevey said that the CPUC is “not a public health agency” and that it must rely on the judgment of agencies such as the CCST and the FCC. The commission in July adopted privacy and security rules regarding smart meters in response to customer concerns.

“And yet after all of this, some customers called for an opt-out program,” Peevey said. He then explained the fees that the program would entail and asked his fellow commissioners to vote on the issue. After long discussion, the commission voted in favor of the opt-out program.

Afterward, there were shouts of protests against the fees.

“This is a crime against humanity!” one person yelled.

In March, PG&E proposed an initial fee of $128 and a monthly charge of $10.69 for the “non-wireless” option, but the PUC rejected those figures. In a November preliminary ruling, the commission proposed that regular customers should be charged an initial fee of $90 and a monthly charge of $15. Meanwhile, customers enrolled in CARE would pay only a $5 monthly charge, with no initial fee.

While some utilities estimate that only about 1% of customers are likely to take advantage of an opt-out program, others – such as Southern California Edison – have said that fees must be set high in order to discourage participation.

In a filing made with the commission Dec. 19, PG&E announced that it now “supports approval of an analog meter option, in addition to the non-communicating radio-off option, in response to customers’ and parties’ continued requests for an analog meter alternative.”

The apparent general consensus among California utilities in recent months has been that whatever opt-out program the PUC ultimately approved for PG&E would provide a model for other utilities, including San Diego Gas & Electric (SDG&E) and Southern California Edison (SCE).

Among the aspects of the motion approved today, the commission ordered PG&E to:

• Establish procedures to inform customers that a smart meter opt-out option is available. A customer currently on the delay list will be informed that the customer will be scheduled to receive a wireless smart meter unless the customer elects to exercise the opt-out option.
• Establish new two-way electric and gas “modified smart meter memorandum accounts” to track revenues and costs associated with providing the opt-out program until a final decision on costs and cost allocation issues associated with providing an analog meter opt-out proposal is issued.

According to the decision, “residential customers may begin signing up to participate in the opt-out option 20 days after the effective date of this decision. PG&E shall have a dedicated phone number for customers to call and sign up for the opt-out option. This number shall be staffed by customer service representatives trained to explain the opt-out option and fees.”

Because customers may “opt-out for any reason, or no reason, PG&E may not require a customer to explain or state why they wish to participate in the opt-out program,” according to the decision. The commission is expected to revisit the issue and adjust fees after the true costs of the program become apparent.

Once again, the exhibit hall was extensive, or, as one attendee quipped, “big enough to land a [Boeing] 747 on.” We at Chartwell couldn’t cover it all. So we stayed focused. What was there to improve the utility customer experience? And the answer: still plenty. Here’s a recap of some of the things we saw and heard for those of you who missed DistribuTECH 2012, including what we came away with as the big three topics related to the end-use utility customer:

Data analytics

There was a lot of noise on the exhibit hall floor about this important and evolving topic. A number of leading vendors, including Oracle, Itron, Aclara Technologies, Calico Energy, Telvent, eMeter and others promoted or launched products to help utilities harness the massive amounts of data from not only interval meters but other sources (grid sensors, load control events, weather information, etc.) into more intelligent grid operation.So just how can data analytics improve the customer experience? According to Andy Zetlan, vice president of product management for Aclara, by giving utilities the ability to better manage their data along with a single “view” of each customer those utilities can then improve programs and services, such as demand response efforts, and enhance customer engagement initiatives. Aclara and Calico Energy announced a partnership that will rely on the latter’s operations management application integrated with Aclara’s customer communications and metering platforms for state-of-the-art demand response. The Aclara Demand Response Management System will allow utilities to see and surgically control all of their resources in one place. “It gives [utilities] the ability to analyze what worked, and what didn’t work” during an event, says Tom Doggett, chief marketing officer for Calico Energy.

Oracle Utilities’ Guerry Waters, vice president, industry strategy, noted in an interview that Oracle provides “out-of-the-box analytics” as a rapid way for utilities to launch new analytics capabilities as they work to improve customer service while reducing costs. Oracle unveiled several dashboards at the show, including Oracle Utilities Meter Data Analytics and Mobile Workforce Analytics, all which would naturally integrate with the Oracle software.

Itron also offered Chartwell a demonstration of its new Active Smart Grid Analytics platform. Itron’s Darby McKee, director of software products, told Chartwell the new ASA platform will right out of the gate help utilities in the areas of theft detection, transformer management and power quality.

Much of the analytics solutions showcased at DistribuTECH are in the pilot phase at select utilities, but appear to offer great promise in helping utilities get their arms around the data dilemma that is growing for utilities.

Customer Engagement

Lots of vendors have the solution for this, yet it’s an issue that continues to dog utilities that deal with growing privacy and safety concerns. While those things must be dealt with, the bigger concern for utilities remains consumer apathy – getting them interested enough to take advantage of all the bells and whistles that were on display in San Antonio last week. Gamification was a big topic of conversation, and a number of utilities discussed how they’ve taken to Facebook and other media as a way to get customers involved.

Opower was demonstrating the much-talked about social media application they’re developing in conjunction with the Natural Resources Defense Council and Facebook. Though not yet public, it appears to have all the makings of the next Farmville once it goes live – still, it may require utility involvement and connectivity to truly get customers the data they may covet. Of course, consumers whose utilities are not involved will get a message to that effect – social marketing at its finest.New York-based Con Edison in conjunction with ThinkEco and its technology that will shut off appliances when not in use, talked about how a demand response initiative in the Big Apple last summer pitted apartment building against apartment building in a social marketing effort to get more users taking part.

Perhaps Comverge CTO Bud Vos summed up the customer engagement issue best during a presentation when he said that home energy management is “trying to create a dialogue between utility and customer, but the customer doesn’t want to have a very long conversation.”

Another interesting play was offered by Capgemini Energy, which would remain device neutral while managing a utility’s entire home energy management and demand response program. In other words, no matter which smart thermostats and DR tech the customer has outfitted in the home – Honeywell, Ecobee or even the much-coveted Nest, Capgemini would manage the DR program and work with the utility and customers to ensure program success.

Though it wasn’t on display, perhaps the customer engagement tool that was discussed the most during DistribuTECH was the “Green Button.” Based on the White House initiative to get consumers involved in their energy usage, utilities across North America starting in – you guessed it – California will place a green button on their customers’ energy usage page at the utility website. The customer will then get up to 13 months of electricity usage data, either monthly or more frequent. The California utilities went live with the green button just prior to the conference. Government officials hope the green button will spur development and ingenuity around energy usage data communications and apps, including gamification and energy usage notification devices.

Electric Vehicles

The plug-in electric vehicle (EV) movement was indeed present at DistribuTECH. An EV presentation garnered one of the highest-attended sessions that we saw, and there were several EVs and numerous charging station technologies on display throughout the massive exhibit hall. In fact, the first gadget that one saw when walking onto the exhibit floor was a charging station display showcased by Schneider Electric. A number of smart grid vendors are hitching their wagons to the EV train, which only makes sense. After all, EV adoption is of great interest to the utilities as they look at strategies for metering EVs and whether or not to offer special pricing programs for EV owners.

Other hot topics: Prepay metering, smart grid in the cloud, smart grid sensors and distribution technology, and where to get the best steaks and Southwestern food.

Indeed, DistribuTECH 2012 offered a wide array of smart grid technologies and supporting products. As for the Hooter’s girls, well, they did a nice job of walking the exhibit hall floor and steering patrons to various product demonstrations. Not that anyone noticed.

During Chartwell’s Webinar last week on Transforming Employees into Energy Efficiency Advocates, Gulf Power and New Jersey Natural Gas (NJNG) provided a more in-depth look at how internal support and communications have increased their respective utilities’ energy efficiency program visibility, as well as employee buy-in.

Gulf Power is working with employees to take ownership in its energy efficiency programs, encouraging them to sign up for various offerings. Through this ‘seeing is believing’ approach, Gulf Power is providing employees with rebates or programs for appliances such as heat pump water heaters, air conditioners and refrigerators. The utility has also launched a comprehensive educational campaign that uses internal media channels to create champions of Gulf Power’s energy efficiency messaging.

NJNG has been able to successfully involve its customer service representatives (CSRs) in spreading the utility’s Conserve to Preserve® (CTP) messaging. When appropriate, CSRs are encouraged to pass along CTP energy and cost-savings tips. By offering incentives and friendly competition, NJNG has considerably increased the number of tips provided during customer calls. The utility’s reach also expands across many other departments, through efforts such as a monthly E-tips email and company-wide events featuring energy efficiency information through games and contests.

Energy efficiency isn’t the only facet of the industry that is requiring a change from the inside out. As smart grid data becomes increasingly available, customer-facing employees are going to be tasked with speaking this new language. This will require a culture-change for many organizations on at least a micro-level in the years ahead. We’ll discuss these issues in more detail next month (Feb. 23-24) at our Customer Contact Management Summit in Atlanta.

When looking to create ambassadors, sometimes it takes the ‘been there, done that, got the t-shirt’ approach. Creating energy efficiency advocates from within can generate an excitement that can be conveyed externally, one customer interaction at a time.

California may add analog to opt-out plan

The delay leaves customers on PG&E’s smart meter installation “delay list” in a prolonged holding pattern. But the nearly month-long stay may result in an opt-out plan that is more effective in the long run. The standard analog meter – regarded by most die-hard opponents as the only valid alternative to smart meters – now appears to be on the table as an option.

Analog meters were not part of the opt-out program originally proposed in March by PG&E. Nor were they included in the CPUC’s proposed decision issued in November.

Then, in a filing made with the commission Dec. 19, PG&E announced that it now “supports approval of an analog meter option, in addition to the non-communicating radio-off option, in response to customers’ and parties’ continued requests for an analog meter alternative.”

The apparent general consensus among California utilities is that whatever opt-out program the PUC ultimately approves for PG&E will provide a model for other utilities, including San Diego Gas & Electric (SDG&E) and Southern California Edison (SCE). At different times last year, the Commission ordered both utilities to submit proposals to the commission outlining the costs and other requirements of initiating opt-out programs including payment plans for four options: analog meter, digital meter with no radio installed, smart meter with radio transmission turned off and a wired smart meter.

Attorneys for SDG&E have expressed the utility’s opposition to the analog option. In fact, on the same day the PG&E filed its comments in favor of an analog option, SDG&E made its own filing in the case opposing an analog meter offering.

“Multiple parties recommend that the Commission authorize an analog meter opt-out option to alleviate concerns about health impacts. This recommendation is inappropriate because the commission has already ruled that health issues are not within the scope of this proceeding,” according to the SDG&E filing.

That very argument was dismissed by the Maine Public Utilities Commission in May, when it ruled that Central Maine Power (CMP) must provide an opt-out program to customers that included an analog option. Commissioner Vendean Vafiades wrote after the ruling that it had been a matter of “sound public policy.” Opt-out programs “shift the focus” of the conversation from the criticisms against smart meters to the economic and environmental benefits of the meters, he wrote.

A seemingly similar sentiment was stated in PG&E’s Dec. 19 filing, which states that the utility “firmly believes that ‘choice’ is both important and necessary, and that the choice that this commission authorizes should be a meaningful one for all customers.”

PG&E spokesman Greg Snapper said last week that “it’s important that our customers have a choice when it comes to the meter on their home.”

The cost that customers will have to pay for the analog option hasn’t been determined. The California commission has expressed its opinion that “it is appropriate that all ratepayers share in a portion” of the costs of an opt-out program rather than structuring fees in a way that would make the opt-out program revenue-neutral.

In March, PG&E proposed an initial fee of $128 and a monthly charge of $10.69 for the “non-wireless” option, but the PUC rejected those figures. Instead, regular customers will be charged an initial fee of $90 and a monthly charge of $15, according to the November preliminary ruling. Meanwhile, customers enrolled in the state’s low-income program – California Alternate Rates for Energy, or CARE – would pay only a $5 monthly charge, with no initial fee.

While some utilities estimate that only about 1% of customers are likely to take advantage of an opt-out program, others – such as Southern California Edison – have said that fees must be set high in order to discourage participation.

The fate of opt-out rates in California remains to be seen. These discussions will undoubtedly be central as the commission prepares for its decision next month. More information on related developments may be found in Chartwell’s recent report Smart Meter Opt-Out Programs 2012.

Regardless of the decisions made over the next few months, when the new contract goes into place prior to the 2014 season one thing will be certain: there will be some people that are happy … and some that are not. The truth of the matter – in sports or in any other facet of life – is that you can’t please all the people all the time.

The key to customer satisfaction in any industry is pleasing as many people as possible. For utilities that means providing customers with what they desire most. According to a recent Chartwell consumer survey, the most important drivers of customer satisfaction are – not surprisingly – reliability and cost.

While no utility will ever perform without any service interruptions, customers care most that service is restored as quickly as possible and that they are kept informed. J.D. Power and Associates, which has measured customer satisfaction in the utility industry since 1999, reported in 2011 the top performing utilities provided more outage information points (2.5 per outage) than others (2.3 or fewer).

As for pricing, provided there are no alternatives, there is a pretty simple formula: the lower the cost, the happier a customer will be. J.D. Power’s numbers also show utilities ranking in the first and second quartile have significantly lower costs at 10.41 and 10.49 cents per kilowatt hour, respectively, compared with 12.17 for the third quartile and 13.39 for the fourth. However, all customer satisfaction levels cannot be simply tied to energy costs as there are a number of variables – some of which are out of a utility’s control – that affect pricing.

There’s no question, customer satisfaction took a major hit during the economic downturn from 2005 to 2008, but it appears customers are becoming happier with the state of utilities as more than half of the 1,509 consumers that participated in Chartwell’s survey expressed their level of overall satisfaction as “very” or “extremely” satisfied with their utility provider.

For more on customer satisfaction, download Chartwell’s newest Customer Care Service report, Customer Satisfaction 2012, which takes a deeper look into how utilities are measuring and improving satisfaction. Chartwell will continue – as it has over the years – to track customer satisfaction.

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Happy New Year!

1.) New spate of utility TV ads clever and fun, but integrated marketing campaigns still your best bet

There’s a resurgence in television advertising for utility energy efficiency programs. In fact, 40% of utilities surveyed by Chartwell sometimes, often or almost always use TV ads to promote their most successful energy efficiency program; only 28% regularly used TV in 2008.

CLICK HERE for the entire post.

Learn more about this topic at EMACS 2012 – The Customer Experience Conference.

2.) One utility is getting the picture on customer engagement

The effort to engage customers in their energy usage is prompting utilities to test web portals, direct mail inserts, in-home displays and other dashboards to determine the most effective strategies. Glendale Water and Power, a California municipal serving 84,500 electric and 32,500 water customers, presented a different idea at Chartwell’s Smart Grid Customer Education Summit in Phoenix last week – coupling utility messaging with pictures of Mom. Glendale Water and Power is using digital picture frames to communicate with customers.

CLICK HERE for the entire post.

Learn more about this topic at Chartwell’s 2012 Summit on Smart Grid Customer Interaction.

3.) Weathering the storm: Social media, mobile sites help utilities improve customer contact

Last week’s “snowmageddon” across much of the eastern United States provides fresh evidence that more electric utilities are turning to mobile channels and social media to keep customers informed during power outages and similar emergencies, a trend highlighted in recent Chartwell research. The National Weather Service reported snow on the ground in every state except Florida as the winter storm crippled parts of the South before moving Northeast, where it delivered record amounts of snowfall. Yet, the power stayed on more often than not and electric companies fared very well in the court of public opinion.

CLICK HERE for the entire post.

Learn more about this topic at Chartwell’s 2012 Summit on Web and Mobile Customer Interaction.

4.) More utilities recognizing the value of usability with their websites

There are two characteristics that will most certainly discourage me from interacting with a company on its website – an antiquated look and/or a complicated layout. When a website has an “old” feel it is apparent the company does not want to invest any resources into its online offerings. So I’m likely to return the favor. Also, I don’t want to spend 10 minutes looking for what I need, let alone all day. If I’m looking for help, I want to get my answer within a few clicks.

CLICK HERE for the entire post.

Learn more about this topic at Chartwell’s 2012 Summit on Web and Mobile Customer Interaction.

5.) Five takeaways from DistribuTECH

The Oracle cars and Elster bike cabs crossing paths in front of the San Diego Convention Center confirmed the hype surrounding DistribuTECH 2011 last week… and that people were tired of walking. I took a break from traversing the USS Midway of San Diego exhibit halls to identify five trends from the show.

CLICK HERE for the entire post.

Learn more about this topic at Chartwell’s 2012 Summit on Smart Grid Customer Interaction.

6.) Takeaways from Chartwell’s Utility Market Research Summit

“That which gets measured gets improved.”

We in the business world hear this a lot; it’s a philosophy that comes out of W. Edwards Deming’s theories around process improvement and his adaptation of statistical process control as pioneered by Walter A. Shewhart. This is the stuff I cut my teeth on in the business world; I authored a monthly newsletter called CQI/TQM for years. (The first person who can tell me in the comments section what those acronyms stand for wins a prize.) The theories around consistently measuring outputs to continuously improve processes (and all the alphabet-soup acronyms that went along with that) were hotter-than-hot—even n in the utility world.

CLICK HERE for the entire post.

Learn more about this topic at Chartwell’s 2012 Summit on Smart Grid Customer Interaction.

7.) Opting out of a smart meter should be a choice — at a cost

Evidence-based marketing is not working for the anti-smart meter crowd in northern California and Maine. And that’s why the utilities serving those areas should – and are, in some cases – let those customers opt out of receiving smart meters. Add the cost of manually reading the meters (“truck rolls”) and maintaining the old meters to the bill, sure, but let them opt out.

CLICK HERE for the entire post.

Learn more about this topic at Chartwell’s 2012 Summit on Smart Grid Customer Interaction.

8.) Location, location, location – As important in website design as succeeding as a restaurateur

Beautiful beaches, swanky shopping and a celebrity-energized nightlife are three of the leading reasons people visit Miami Beach, but the amazing selection of international food shouldn’t be undersold. Miami Beach offers cuisines from Cuban and Haitian to Peruvian, Indian, Thai and Japanese. I don’t consider myself a “foodie,” but appreciate great cuisine and Miami Beach serves it up with panache.

During my last Miami food adventure, it was immediately obvious that only a handful of restaurants attract the majority of culinary enthusiasts. Is it because they truly offer better food, prices or dining experience? My opinion is “probably not.” If Miami Beach restaurants set up their shops on a very large ship, organized proportionate to current geographic location, the ship would sink faster than the Titanic, led by the Ocean Avenue.

Yes, it’s all about location. Every year, throngs of promising restaurateurs fail because they open their doors on the wrong street.

How does the importance of location translate to website design?

CLICK HERE for the entire post.

Learn more about this topic at Chartwell’s 2012 Summit on Web and Mobile Customer Interaction.

9.) Smart grid will likely change utility job descriptions, from the bottom up

No one will debate the importance of a contact center agent in a utility’s customer service strategy. As front-line employees, customer service representatives can, and oftentimes do, shape customers’ opinions about the utility depending on the level of service provided. And, whether ideal or not, most customers still pick up the telephone to reach out to their energy providers. But the job as a customer service representative (CSR) is far from glamorous.

CLICK HERE for the entire post.

Learn more about this topic at Chartwell’s 2012 Summit on Smart Grid Customer Interaction.

10.) What can Super Bowl advertisers teach utilities about marketing energy efficiency?

Football fans everywhere watched the Green Bay Packers take home the Lombardi Trophy after a highly contested match with the Pittsburgh Steelers for Super Bowl XLV. As usual, the big event offered plenty of entertainment for the sports-un-enthusiast, as well. Super Bowl viewers paid as much attention to the splashy commercials as they did Aaron Rodgers’ three passing touchdowns.

According to a study conducted by Millward Brown Optimor for the NFL, brands that advertise during the Super Bowl see an average sales lift of more than 11 percent in the following month. CEO Joanna Seddon says that this generates an ROI from Super Bowl ads 250 times greater than from the average TV ad.

It is no surprise that many advertisers coupled their investment, an estimated $2.6 million per 30-second spot, with a partnership marketing strategy.

Partnership marketing, also referred to as affinity marketing, is the deliberate linking of two, or more well-established brands to create a joint return that is stronger than if the brands operated in isolation.

CLICK HERE for the entire post.

Learn more about this topic at EMACS 2012 – The Customer Experience Conference.

Oh, and the financial struggles of recent years continued.

The year is also one that’s been big for the utility industry. It’s been marked by several high-profile merger proposals, continued smart meter protests and the mass market introduction of the plug-in electric vehicle (EV). It will be interesting in the coming year to see if the EV can build momentum, if smart meter protesters get louder or if the highest profile merger of the lot – the Duke/Progress Energy marriage – can make a go after its recent setback at the federal regulatory level.

At Chartwell often measure the utility industry trends not by the big news, but by the little things we hear from our membership as we flip the calendar each month. And of course we measure these trends through our spectrum of customer satisfaction.

Chartwell has seen a wide variety of member requests this year. We’ve been asked about everything from advanced metering for water leak detection to card payments for utility bills to distributed power generation. So, keeping with our annual countdown started last year, we now take a look at the Top 10 Chartwell Member requests for the past year, categorized by yours truly.

10. Web self-service adoption. We separate this out from online billing adoption and mobile web. In this case, members ask Chartwell about what other traditional web services customers are moving to – and how utilities are getting them to move, what web-based services and portals utilities are offering, what are the best utility websites, and what vendors are offering web-based services. And who better to ask? We’ve been covering the topic since 1997 – longer than any other firm in this industry. (Please pardon the self-congratulatory promotion.)

9. Smart meter/advanced metering deployment – In late 2010, Chartwell predicted 26 million meters would be outfitted with two-way communication technology by the end of this year. We plan another study to check whether that prediction came to fruition in 2012, but whether or not we were over or under there’s still roughly 275 million meters to outfit with advanced meter technologies in North America. Utilities need to know what’s happening as they implement their smart meters; vendors want to keep up with the industry.

8. Social media – Probably the hottest topic Chartwell saw in 2009, it just barely missed the Top 10 last year. It’s back, but this time because utilities are interacting more with customers via social sites and beginning to look at moving customer service to this domain. For some utilities, more customer service professionals are being assigned to social media alongside the marketing and communications staff.

7. Energy efficiency – This was last year’s most-asked about topic. Utilities need to know about getting customer buy-in, what program successes other are seeing, the most-effective marketing channels, etc. It’s still a big deal.

6. Paperless billing and payment – A consistent chart topper these days, the subject made last year’s list in fifth place. Utilities are about efficiencies and the lowest-hanging fruit as far as getting customers to move to more cost-effective online programs was billing and payment. Utilities are working hard to keep moving them.

5. Low-income programs – A sign of times. Utilities need information on weatherization and other energy efficiency programs for low-income customers; they need to know how to communicate with this customer segment and identify the best practices in offering energy assistance. Though recent data shows a slight decrease in the unemployment rate, times aren’t getting much better; so, unfortunately it may be another big issue next year.

4. Prepayment programs – Fortunately, we did a report on the subject, because it’s been hot. Chartwell over the years has seen much interest in prepaid metering and billing but not a lot of deployment, until recently. While the technology and offerings haven’t caught on with most large utilities – sans SRP, which has the model program – more electric cooperatives are deploying. They, of course, don’t have to face regulatory approval and the consumers groups, which for whatever reasons are often opposed.

3. Smart grid customer engagement – The requests take many forms, but they all boil down to this. Members asked us about how utilities are getting customer buy-in for behind-the-meter programs, smart grid education and outreach and what we have on “smart meter success stories.”

2. Mobile websites and applications – The advent of the iPhone, Android and touch pads has left utilities scrambling to keep up with other, more fast-paced customer-oriented industries. Customer are now mobile. Utilities overall aren’t offering mobile services yet, which is okay for now as we’ve found most customers aren’t putting utilities on their shopping list for mobile apps. But they will. The front-running utilities have outage apps and mobile websites and they’re beginning to move into billing and payment. The smart grid waits.

1. Customer satisfaction – The biggest hit of the year. It’s been top of mind with utilities now for 15 years, thanks to J.D. Power & Associates and the regulatory commissions who don’t like complaints. Chartwell members wanted to know this year about maintaining satisfied customers while keeping operational costs down; how financial performance relates to satisfaction; how various programs such as paperless billing and affect customer satisfaction; and what vendors other utilities are using to take their customers’ pulse. Though it’s a key performance indicator for most utilities, it didn’t crack last year’s Top 10 – at least as far as utilities inquiring directly about satisfaction issues. Of course, all the research Chartwell does revolves around customer satisfaction issues – so really, it’s probably #1 every year.

Other topics getting numerous requests but not making the list included budget billing, outage communications and first contact resolution. We predict outage communications will gain momentum in the coming year as a number of utilities have experienced recent issues in responding to unexpected power outages.

When you look at these issues on a higher level, the biggest area of interest among membership was billing and payment issues, followed by smart grid/smart meter, web-based self-service customer adoption and trends, and call center management.

We at Chartwell wish our readers the best for the coming year. May 2012 bring you much success and happiness.

The introduction of the Nest – a sleek, circular wall-mounted unit designed by former Apple designer Tony Fadell – was one of many notable stories this year in the field of home energy management, including the launch of EnergyHub’s Mercury thermostat and a new partnership between Honeywell and Opower to produce similar products. All this excitement could yield utility investment, especially if the EPA revives Energy Star certification for these devices in the spring.

Even the massive hype surrounding the Nest’s launch and the thousands of homeowners who flocked to buy them didn’t revive the faith of many utility executives. They asked: Where is the field test data?

The reason for the question is this. In 2009, the EPA stopped granting Energy Star certification for programmable thermostats because field tests by utilities – most notably Florida Power & Light – showed that the homeowners who used them actually burned through about 12% more electricity than folks without the supposedly cost-saving thermostats. As it turned out, users generally programmed the thermostats to perform in very energy-inefficient ways.

Whether the new generation of thermostats – or their users – will perform better remains unclear.

For one, EnergyHub claims that its Mercury thermostat platform has solved the usability problem. David Wechsler, vice president for business development, says that in field tests conducted last year by the company, 85% of users picked comfort settings that met or exceeded Energy Star efficiency recommendations. This compares to 71% of users in the Florida Power & Light study who either didn’t program their thermostats at all or created settings that were so slight their effect was negligible.

Nest, meanwhile, only started field testing in the second half of 2011, so the data is not yet available.  Instead, the company uses computer models to demonstrate its cost savings.

Utility company executives say that, in the way that doctors should not prescribe untested medications or therapies to their patients, they are themselves unwilling to prescribe thermostats as a cure for high bills without some sort of official endorsement of their effectiveness.

Such endorsements may be coming soon. This spring, the EPA is expected to begin issuing Energy Star certifications for “climate controls” – a category of products distinct from “programmable thermostats” whose criteria were set in 2004.

The criteria that this new generation of thermostats must meet are at least as concerned with ease-of-use and intuitive programmability as they are with energy efficiency, says Abigail Daken, an environmental engineer with EPA’s Energy Star program.

What does all of this about thermostats – consumer products that anyone can buy over the Internet or from a home improvement store – have to do with utility companies? In my opinion, a great deal.

Of the articles and blogs I have seen on the subject so far, none has remarked on the family resemblance in system architecture between the new thermostats and advanced metering systems.

In the place of a smart meter is a smart thermostat that tracks energy usage. In place of a meter data management system is a cloud computing system that records and analyzes that data. And instead of communicating on the Zigbee protocol that most utilities have chosen – and is used by EnergyHub’s own HAN offering – the Mercury uses WiFi to interface directly with the customer’s home wireless router.

Of course, a smart meter tracks an entire home’s usage while a smart home thermostat only tracks the power used by the heating and air conditioning system. But climate control represents about 44 percent of the average home’s energy usage, according to the Energy Information Administration.

“It can be thought of as ‘load control as a service,’” says Wechsler of EnergyHub.

This service can be provided to customers with or without utility partnerships. Wechsler’s company has partnered with several utilities because the same system, with permissions from the customers, can be used for demand response.

That is, if customers agree, utilities themselves can reduce peak demand by turning down or switching off thousands of residential and customer heating and air conditioning units at critical times of day. And all of this is possible with or without installing smart meters, which utilities themselves usually pay for.

Of the 128 utilities contacted for Chartwell’s 2010 Smart Grid Survey, 38% of respondents reported that they were not considering investments to manage and store data related to customer end-use devices such as smart thermostats. About 17% said they were considering such investment, and 3 percent said they were in the process of taking such action. Times may be changing, though. Chartwell’s 2012 Smart Grid Survey will provide new findings early in the year.

It seems likely that more utilities will enter into partnerships with companies in the crowded home energy management market, but they may watch for a while to see which companies thrive and grow and which get trampled. Chartwell certainly will be watching that process in 2012.

Now, many utilities are working to act quickly as customer expectations of mobile options continue to increase. According to presentation delivered by Eric Davis, User Experience Supervisor for AEP during Chartwell’s Dec. 7 Webinar on Mobile Websites (an event also featuring Flint Energies and Seattle City Light), 13% of the utility’s website traffic came from mobile devices during times of major storms – before the utility even launched its mobile site https://www.aep.com/mobile/.

While many smartphone users continue to show their interest in accessing information via mobile apps, mobile websites can offer a widespread presence for users browsing or seeking information directly via mobile device. Warner Robbins, Ga.-based Flint Energies offers its members the opportunity to report an outage, pay a bill, monitor the cooperative’s Twitter feed and receive other relevant information via www.flintenergies.com/mobi.

Seattle City Light, in collaboration with developers, quickly rolled out its mobile website http://www.seattle.gov/light/mobile/ (in just three weeks!), and followed up with bill inserts, information on its traditional website homepage, social media notifications as well as a news release that prompted local attention.

While getting user feedback and buy-in the design phase can offer valuable insight, keeping up with what customers want on an ongoing basis can provide an opportunity for continuous improvement. AEP asks one out of 10 of its mobile website visitors the reason for their interaction, using this channel as a way to keep its finger on the pulse of the customer.

When it comes to best practices and lessons learned, utilities can leverage the content already featured on their primary websites, given the years developing and cultivating this online content. “Those are the same key pieces that the customers are looking for in a mobile site,” explains Scott Thomsen, Senior Strategic Advisor in Communications and Public Affairs for Seattle City Light. He adds another critical piece: keep the mobile site simple and easy to use. Sites shouldn’t be cluttered with graphics and other content that could slow down access to the site for the user.

So, whether a utility is looking to launch a mobile website or add enhanced functionality, it is likely – as with other technological advances – that the game will keep changing. However, it can be beneficial to have a strategy in place to evaluate the business case for utilities while keeping close tabs on customers’ need and expectations.

In April 2012, we will convene with utilities across North America to look at some of the best strategies and features offered via mobile device during Chartwell’s Web and Mobile Interaction Summit in Atlanta. We would love for you to join this ongoing discussion.

• Tropical Storm Don – The storm had virtually no impact, disintegrating upon making landfall and dropping only about two-thirds of an inch of rain along the Texas coast after it hit dry air caused by the state’s extreme drought.
• Tropical Storm Lee – Making landfall in Louisiana, the large, slow-moving storm caused heavy rainfall and flooding in several states, including Mississippi, Alabama, Florida and as far north as New York and Pennsylvania. The storm caused more than $1 billion in damage and resulted in 21 deaths. A number of utilities were affected as thousands of customers in no less than five states lost power.

However there was one storm that did enough damage to more than make up for the others, as Hurricane Irene – one of only three major hurricanes this year and the first to hit the US mainland since Hurricane Ike in 2008 – made landfall over the Outer Banks of North Carolina on August 27 and tore through the Northeast. Damage estimates for Irene ranged from $10 to $15 billion, ranking somewhere in the top 10-15 most costly of all time.

All told, more than 5.7 million customers lost power as a result of Hurricane Irene. And to add to the frustration of utility officials in the Northeast, a rare, but massive snowstorm just two months later left many of the same customers without power again. For PPL Electric Utilities, the two storms were the second- and third-worst outages in its history, with only Hurricane Isabel topping the 2011 storms.

From a utility perspective, there has been a great deal of bad press in the aftermath of Hurricane Irene and the snowstorm, forcing other utilities to be proactive in ensuring a repeat performance doesn’t occur.

PPL announced last week it will be pumping between $3 and $5 million dollars into efforts to upgrade its outage reporting system. The improvements will include an addition of phone lines and customer service representatives, which the utility hopes will help curb some of the issues it faced as PPL fielded more than 100,000 calls per hour at the peak of each of the two most recent storms. In total, the utility’s two call centers received 1.2 million calls per event, exceeding the total number of calls for 2010.

In the coming months, Chartwell will continue to delve into the impact Hurricane Irene ultimately had on utilities and what they are planning to do to prepare for the next big storm, which could come at any time. As this year has already proven, major storms that affect utilities aren’t limited to a type or a season. Constant planning and preparation is always needed as the winter often brings snow and ice, while the spring is prime time for tornadoes.