Energy utilities must meet the demand to communicate more effectively

We stand on the cusp of a historic shift in the energy markets with the recent Federal Energy Regulatory Commission Order for Demand Response.

We stand on the cusp of a historic shift in the energy markets with the recent Federal Energy Regulatory Commission Order for Demand Response. Demand response means shifting energy use to times when energy costs less to generate and consume; it is a major benefit of creating a smarter electric grid.

The order takes an added leap - enabling energy customers to get a check from the utility at energy's market price if they return energy to the grid. This could be a huge motivator for consumers to get a handle on energy use and cost, while helping utilities alleviate peak-period generation costs.

Most Americans, though, view electricity as an inalienable right, while few understand what goes on behind the switch. It is tempting to see a lack of energy awareness as the root of the utility industry's customer-relationship dilemma.

Communication is a priority. Many studies suggest utility consumers are open to a changed relationship with their power company if they are approached correctly. Below are a few tips on how to effectively engage.

The forest and the trees
With demand response, customers must understand the larger context of and justification for smart grid deployments. This is especially vital because most of the long-term economic benefit of demand response could come not from reduced utility bills, but from mitigated rate increases.

Keep it simple
A study of successful demand response pilots in Illinois highlighted utilities' inability to communicate in clear language. Jargon and unnecessary acronyms are rampant in the industry and will often breed confusion, suspicion, and mistrust.

Some power companies are reaching out to pro-consumer advocacy groups as part of an effective educational strategy. For example, the Natural Resources Council of Maine provided its support to Central Maine Power's smart meter rollout.

Embrace new media
Endorsements from friends and peers will spur adaptation to technological change posed by demand response. Innovative utilities are integrating social channels for in-depth engagement with many residential users.

Public Utilities Fortnightly calls demand response a "disruptive technology" that demands "disruptive change." One such change involves the external communication patterns most utilities now employ. Addressing this issue could be a key in determining the winners, losers, innovators, and laggards as we move forward.

Matt Wolfrom, EVP and MD of the tech and energy markets practices at Makovsky & Company.

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