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U.S. Department of Energy September 2014Table ES-1. Summary of Lessons LearnedStudy PhasesTopicsEducation andOutreachPlanningOrganization andManagementRecruitmentInfrastructureLessons Learned1.Conduct General Customer Education2.Conduct Market Research3.Test Messages before Using Them4.Implement Cross-functional Teams5.Have Friends and Family Participation6.Evaluate Systems Integration Requirements7.Verify Equipment Capabilities8.Be Prepared for Much More Customer Data9.Have Plans for Using Vendors and Call Centers10. Conduct Soft Launches and Avoid Holiday SeasonsRecruitment11. Use Multiple Delivery ChannelsRecruitment Strategies12. Set Realistic Expectations13. Avoid Confusing Messages14. Conduct Training for Communication SkillsNotifications andCommunicationsOperation15. Expect Notification Errors16. Use Web Portals as Active and not Passive ToolsMulti-Day, CriticalPeak Events17. Refine Notification Frequency to Avoid Confusion18. Have Plans for Addressing Customer Complaints19. Have Plans for Dealing with Customer DevicesEnding the Study20. Take Steps for Reaching ClosureEvaluationRoll-Out DecisionMaking21. Conduct Comprehensive Evaluations22. Educate Decision Makers about Evaluation ResultsLessons Learned – CBS Utilities Engagement with ConsumersPage v

U.S. Department of Energy September 2014Table of ContentsExecutive Summary. i1.Introduction . 12.Program Planning . 63.Customer Recruitment. 124.Program Operations. 185.Program Evaluations . 236.Major Findings and Next Steps . 27Appendix A – Where to Find Further Information . 30Lessons Learned – CBS Utilities Engagement with ConsumersPage vi

U.S. Department of Energy September 20141.IntroductionUnder the American Recovery and Reinvestment Act of 2009 (Recovery Act), DOE and theelectricity industry have jointly invested over 7.9 billion in 99 cost-shared SGIG projects tomodernize the electric grid, strengthen cybersecurity, improve interoperability, and collect anunprecedented level of data on smart grid technologies, tools, and techniques.1.1Overview of the Consumer Behavior StudiesThe SGIG program includes ten utilities that are conducting eleven consumer behavior studies(CBS). All of the studies produce interim and final evaluation reports and these are posted onDOE’s smartgrid.gov website. These reports contain additional details on the specific consumerengagement activities conducted by the various utilities. Figure 1 provides a summary of theSGIG CBS utilities and the technologies and rate offerings they have deployed. These two-yearstudies will be completed by the end of 2015. Appendix A contains web links to CBS and relatedreports.The SGIG CBS effort presents an opportunity to advance the electric power industry’sunderstanding of customer acceptance and retention, and energy and peak demand impacts,from participation in time-based rate programs by building on the existing and long-standingindustry experience with studies, experiments and pilots. This is valuable for determining howto use time-based rates for achieving demand reductions and deferring needs for futurecapacity additions.To increase the usefulness of the studies to others, DOE set guidelines and protocols for the tenutilities to: (1) focus their studies on the application and implementation of time-based rates(e.g., time of use, critical peak pricing); (2) apply experimental methods (e.g, randomizedcontrol trials, randomized encouragement designs); and (3) recruit sufficient numbers ofparticipants into the study.1The DOE guidelines and protocols sought to help the utilities design studies that wouldrigorously test and more precisely estimate the impact of time-based rates on customers’energy usage patterns, as well as identify the key drivers that motivate the changes. This wouldenable the studies, if implemented consistent with the design, to provide more definitiveanswers for policymakers and stakeholders to key questions in the areas of acceptance of and1Further information on methods for conducting studies of time-based rates and other types of customerprograms can be found in a report by Lawrence Berkeley National Laboratory (with funding from DOE) and theElectric Power Research Institute, “Quantifying the Impacts of Time-Based Rates, Enabling Technologies, andother Treatments in Consumer Behavior Studies: Guidelines and Protocols”, July 2013.Lessons Learned – CBS Utilities Engagement with ConsumersPage 1

U.S. Department of Energy September 2014response to time-based rate programs. Each utility was assigned a Technical Advisory Group toprovide technical assistance which would help the utilities better adhere to the DOE guidelinesand protocols.Two of the studies are complete, the rest are at different phases of study implementation.Overall, the aim of the studies is to examine the response of residential and small commercialcustomers to time-based rate programs which are implemented in conjunction with thedeployment of AMI and customer systems such as in-home displays (IHDs), programmablecommunicating thermostats (PCTs), and web portals.The purpose of this report is to present lessons learned by the CBS utilities about one of themost important aspects of implementing customer-facing programs: how to effectively engageand communicate with customers. The lessons learned consist of recommendations andsuggestions for planning and operating time-based rate programs in conjunction with AMI andcustomer systems, recruiting customers to participate, and conducting post-programevaluations to support decision making for follow-on, larger-scale, roll-outs.The lessons learned are based on a series of discussions and in-depth interviews with theutilities facilitated by Lawrence Berkeley National Laboratory (LBNL). Beginning in 2010, LBNLhas organized a series of monthly conference calls to provide a forum for the CBS utilities toexchange information, candidly discuss problems and issues, and share ideas about what doesand does not work within the various phases of program implementation. During the monthlyCBS forums consumer engagement activities have consistently been one of the top prioritytopics for discussion.Lessons Learned – CBS Utilities Engagement with ConsumersPage 2

U.S. Department of Energy September 2014Figure 1. SGIG Consumer Behavior Studies1.2Study Implementation PhasesFor the purposes of these studies, discussions were organized according to four phases thatgenerally define the sequence of implementing studies of time-based rate programs: (1)planning (2) recruitment, (3) operation, and (4) evaluation (Figure 2). There are consumerengagement activities in each of the phases and this report presents information on CBS utilityExpectations and Experiences (e.g., initial conditions and observations) and Lessons Learned(i.e., suggestions and recommendations about what to do and not do).Lessons Learned – CBS Utilities Engagement with ConsumersPage 3

U.S. Department of Energy September 2014Figure 2. Phases of Study ImplementationThe first phase involves planning of consumer engagement activities undertaken prior torecruitment to understand what motivates customers to join programs and take service undertime-based rates. This phase can include: market research (e.g., surveys and focus groups) togain a better understanding of levels of consumer awareness, interests, and needs about smartmeters, time-based rates and customer systems; general consumer education activities aboutthese topics; and outreach to specific stakeholders and community groups to better educatetarget audiences and identify/address their concerns.The second phase involves recruitment of customers to join the study of time-based rate orinformation programs. This phase can include: development and delivery of study invitationpackages; processes and tools for addressing customer questions about the study; andmanagement and organizational activities for building needed administrative processes andsystems.The third phase involves operation of consumer engagement activities undertaken afterrecruitment is complete and during the period when the study is being implemented and delivered.This phase can include development and use of: systems for notifying customers of pricing levelsand/or demand response (e.g., critical peak) events; information about how to manageconsumption and bills; processes and procedures for addressing customer questions, concerns, andattrition; and activities for operating the management and administrative processes related tocustomer engagements.Lessons Learned – CBS Utilities Engagement with ConsumersPage 4

U.S. Department of Energy September 2014The last phase involves evaluation of the study to understand what was learned so as to informdecisions about future plans for potentially larger-scale roll-outs. This phase can include:implementation and analysis of customer acceptance surveys and energy and demand impactsanalysis; evaluations of program designs, implementation, and cost effectiveness; decisionmaking about future plans and possible roll-outs; and management of used customerequipment and devices.Lessons Learned – CBS Utilities Engagement with ConsumersPage 5

U.S. Department of Energy September 20142.Planning PhaseThe study planning phase covers consumer engagement activities undertaken prior torecruitment in order to understand what motivates customers to join programs and takeservice under time-based rates. CBS utility Expectations and Experiences and Lessons Learnedare presented in two main areas: (1) needs for effective customer outreach and education, and(2) needs for effective organizational teams and management approaches.2.1Outreach and EducationAn important aspect of planning for studies of time-based rate programs is raising theknowledge and awareness of customers about new offerings. One challenge is that customerstoday are busy people who are constantly being bombarded with messages and sales pitchesfrom many different vendors who are using all types of media, including newspapers, radio,television, phone lines, and the internet. The competition for the attention of people is intenseand the SGIG CBS utilities found that in order to be heard they needed to sharpen theirstrategies and tactics for customer education and outreach. Following are several suggestions:Conduct General Customer Education Expectations and Experiences: Smart grid, smart metering, and time-based rates arecomplicated concepts that will be initially unfamiliar to most customers. Raising theirawareness and understanding is important but finding effective ways for doing so can bedifficult. While the concepts of meters and time-based rates are related, some of the CBSutilities were concerned that they wouldn’t be effective trying to educate customers aboutthese concepts all at once, or using the same materials. Customer smart meter concernsabout privacy and health effects require delivery of factual information to off-setinaccuracies promulgated from a variety of non-utility sources. Setting appropriateexpectations about what these technologies can accomplish for utilities and what they cando for customers was viewed by the SGIG CBS utilities as being critical in order to help boostunderstanding and set the stage for broader receptiveness to utility’s study offering. Lessons Learned: Customer education is an important step in successfully deploying studiesof time-based rate programs. Methods for delivering this education curriculum are manyand varied but one approach used effectively, particularly by smaller utilities, is publicmeetings at the city, town and even community level. Many smaller utilities already haveon-going community outreach activities that can be changed to include smart grid-relatedtopics. Encouraging utility representatives to meet with community groups and talk directlywith customers through local business venues, like the Chamber of Commerce, or moreLessons Learned – CBS Utilities Engagement with ConsumersPage 6

U.S. Department of Energy September 2014informal gatherings, like neighborhood associations, can be more effective than newspaperarticles or radio spots since they allow for greater interactions, including question andanswer sessions. However, even when utilities do not have the interest or resources toengage in direct community outreach, more general education methods such as radio andnewspaper advertisements should be considered for addressing mass markets as they canalso be effective. Educational information can also be presented on web sites and throughsocial media. Traditional bill stuffers are helpful but most of the CBS utilities found them tonot be sufficient.Conduct Market Research Expectations and Experiences: The needs and wants of customers with respect to electricitycan be challenging to determine. Market research is one of the tools for doing this.However, not all SGIG CBS utilities utilized focus groups, surveys, and other market researchtools for test marketing terms and concepts that will attract customer interest and engagethem to participate in the new rates being offered. For budget planning purposes, marketresearch is an important part of program implementation and most of the utilities saw theneed to budget for these activities at appropriate levels. Lessons Learned: Wording and the use of terminology matters and market research can helpdetermine how customers will perceive different forms of utility messages. The use offocus groups and surveys led to changes in marketing materials in almost all cases for thoseCBS utilities who utilized them. For example, the initial marketing materials explaining timebased rate programs for many of the utilities included words like “critical” and “emergency”to convey the importance of customer actions and what those actions need to accomplishfor the electric system. However, for several utilities who test marketed these messages,these terms were perceived by many customers as having somewhat off-puttingconnotations and for being overly centered on the needs of the utility. Several of theutilities moved from terms like “critical” and “emergency” to more customer-centeredterms that conveyed a greater sense of personal control over energy consumption and bills(such as terms like “choice” and “savings”). It was also found that terms which gave thecustomer a stronger sense of control were preferred over terms which conveyed a sense ofstrong utility control and thus minimized the role of customers and their taking action tochange their own behavior. 22However, for at least one utility installing PCTs, once customers enrolled and were participating, a majorityallowed the utility to control their thermostat during peak periods, even though they may have preferredmessaging to the contrary. This utility speculated that the reason for the change was the value to the customers ofconvenience.Lessons Learned – CBS Utilities Engagement with ConsumersPage 7

U.S. Department of Energy September 2014Clear and concise presentations of study details are paramount to successfully engagingcustomers. Customers indicated through market research that they wanted detailedinformation about the study and what it would mean for them to participate in terms ofhassles and savings. The utilities who undertook such efforts found that it often requiredconsiderable time and effort to refine messages and strike the proper balance between toomany and too few details. All of the utilities also found that initial messaging tends to setexpectations that carry through the entire study, and so if set incorrectly can haveimplications for customer retention later. As such, market research budgeted for andcarried out during the planning phase can help prevent problems with customerrecruitment and acceptance down the road.Test Messages before Using Them Expectations and Experiences: A few of the SGIG CBS utilities initially thought that focusgroups alone would be sufficient for creating effective marketing messages. In several ofthe focus groups the majority of customers said they were highly motivated byenvironmental and societal concerns and that their participation in studies of new timebased rate programs would be driven by that over economic or financial concerns. Lessons Learned: In focus groups, even with highly experienced focus group facilitators,customers seem to be more inclined to express opinions that they believe their peers wouldlike to hear than their own actual preferences. It is frequently the case that validation isneeded to test market focus group-based messages on a variety of customer segments andcircumstances during the planning phase before they are offered to customers as part ofthe recruitment phase. Test marketing, along with observed recruitment results, showedthat for various messages (e.g., saving money, helping the environment, taking control, andhaving fun) the primary motivator for the majority of customers is financial, saving money.Environmental and societal concerns are important to customers, but the utilities learnedthat participation, acceptance, and behavioral changes seemed to be driven more byopportunities for bill savings and lower costs than environmental or societal concerns. Testmarketing messages outside of focus groups was one of the keys in making thisdetermination.2.2Organization and ManagementAn important aspect of implementing studies of time-based rate programs is internal staffing,organization, and management. Many utilities do not have extensive experience with successfuldeployment of time-based rate programs at the residential level and there are learning curvesLessons Learned – CBS Utilities Engagement with ConsumersPage 8

U.S. Department of Energy September 2014to climb. Learning about how other utilities have tackled organizational challenges is helpful.Following are several suggestions:Implement Cross-functional Teams Expectations and Experiences: Studies of new customer program offerings, like time-basedrates, require the active participation of staff and expertise from multiple utilitydepartments that include, for example, rates, load research, metering, distribution,customer services, IT, and planning. Yet personnel from these other parts of theorganization have their own job responsibilities and may not always sh

Electricity Delivery and Energy Reliability, U.S. Department of Energy under Lawrence Berkeley National Laboratory Contract No. DE‐AC02‐05CH11231. FOR MORE INFORMATION Regarding: Experiences from the Consumer Behavior Studies on Engaging Customers, please contact: Peter Cappers Lawrence Berkeley National Laboratory E-mail: PACappers@lbl.gov