Why do customers say NO to many electric utilities demand management programs?

I was speaking to a friend of mine about this recently.

“Look!” she said, “I receive so many different pieces of mail and mail with bill stuffers in them that I JUST THROW THEM AWAY!”

“Some of those could have vital information”, I said.

She nodded with indifference. “But I don’t have time to read through all of that material. Why can’t power companies make it easier for me?”

I have seen the other side of this argument — companies complaining of single-digit adoption rates of their demand management programs — with puzzled Program Managers exclaiming, “It saves customers money! Why don’t they enroll in our programs?”

The challenge is that most companies look to the shortfall in customer adoption of these programs to identify deficiencies in how they are structured or marketed and don’t try to understand the customer experience. Their messages get lost in a sea of other communications, not to mention the negative emotional state to which most people default when receiving any bill, whether it be electronic or paper. The fact that the offers and incentives are received in the context of a highly transactional relationship between customers and utility providers doesn’t help.

All energy efficiency programs have one thing in common — they are built on the logic of cost saving — which would seem simple enough, but the low adoption rates say otherwise.

Consider the Reforming the Energy Vision (REV) espoused by Governor Cuomo for New York State. The big goals of REV are:

40% Reduction in GHG emissions from 1990 levels

Reducing greenhouse gas (GHG) emissions from the energy sector — power generation, industry, buildings, and transportation — is critical to protecting the health and welfare of New Yorkers and reaching the longer term goal of decreasing total carbon emissions 80% by 2050.

50% Generation of electricity must come from renewable energy sources

Renewable energy sources, including solar, wind, hydropower, and biomass, will play a vital role in reducing electricity price volatility and curbing carbon emissions.

23% Decrease in energy consumption in buildings from 2012 levels

Energy efficiency results in lower energy bills and is the single most cost-effective tool in achieving energy objectives. 600 trillion British thermal units (TBtu) in energy efficiency gains equates to a 23% reduction in energy consumption by buildings.

To achieve these goals requires a focus on adoption rates and the external customer.

The challenge is that most Power companies still think of their customers as rate-payers and not customers — this is not a new thought, but if you ask most electric utility leaders to articulate the difference they very often say, yes, we heard that statement before but I am not sure what we need to do to make that transition.

The issue of adoption rates may be more behavioral than a reflection of the merits of a technical program — requiring a process which assists in surfacing the real motivations and behaviors of their customers, one that ensures utility personnel are not imposing their own preferences on the program design but are instead designing with an external customer mindset. This requires an understanding that motivation changes with different groups of people, ranging from individual home owners and muti-residential owners to big business or building customers.

If demand management organizations set this as foundational to the design of their programs they would discover totally different insights into the way they manage, communicate and interact with customers which would positively influence the adoption rates of their programs.

It would be wonderful to see the ambitious REV goals be achieved by 2030 both for our environment and the impact it could potentially have on the cost and quality of lives; especially low income groups, in New York State.