09012009_BringCustonBoard

09012009_BringCustonBoard - Bringing Customers On Board...

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52 P UBLIC UTILITIES FORTNIGHTLY S EPTEMBER 2009 www.fortnightly.com B Y M ICHAEL H ENRY P RICE AND J IM T HOMSON Bringing Customers On Board Realizing the benefits of smart meters.
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gence portals to facilitate customer analysis. In fact, the utility has an obligation to make consumption information available to facilitate customer decision making and to drive customer interest, adoption, and behavior. On the other hand, customers must learn how to use these new tools, interpret data, participate in energy conservation and load-shifting activi- ties, and understand the value that AMI brings. Simply stated, utili- ties must re-engineer the customer’s percep- tion of the utility rela- tionship—in effect, re- engineering the cus- tomers themselves. The smart-grid value propo- sition cannot be achieved by the utility alone, so customers must participate in these new programs and technology solutions to realize and share the benefits with the utility. Energy prices tra- ditionally have been described by inelastic demand curves, but now, the customer is in a more influential position to control the energy prices paid. Information is Power Although the focus of this discussion so far has been to com- municate that significant changes are required on the part of the utility customer, two important points should be noted. First, better customer decision making requires timely, accurate consumption and pricing information. Second, customers need to understand the implications of their actions, both individu- ally and in concert with other similarly motivated end users. Situation: Perhaps the best way to continue this discussion is to pro- vide some context to help understand the elements that affect commodity pricing. Fuel costs, global energy demand, and util- ity reserve requirements all have an effect on the prices cus- tomers pay for their electric, gas, and water services. n Fuel costs : Even without the external pressure that regu- latory and environmental policies exert, commodity prices for fossil fuels are on the rise in the aggregate, despite recent con- tractions in the price of oil. Rising fuel costs affect customers’ cash outlays not only directly, for fuels like natural gas that are Advanced metering infrastructure (AMI) and smart meter- ing hold the promise of tangible cost, quality, and service improvements, but to realize those benefits, the customer will need to accept a new role by not just speaking out, but engag- ing with the utility and taking positive action. End users will have to move beyond passive input and take an active role in defining requirements for new and improved services, influ- encing operational improvements, and participating actively in programs and services that lead to improvements—all of which requires a change in long-established patterns of behavior. Utility companies have been under pressure to address
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09012009_BringCustonBoard - Bringing Customers On Board...

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