The Infosys Utilities Blog seeks to discuss and answer the industry’s burning Smart Grid questions through the commentary of the industry’s leading Smart Grid and Sustainability experts. This blogging community offers a rich source of fresh new ideas on the planning, design and implementation of solutions for the utility industry of tomorrow.

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November 29, 2010

The Smart Customer Experience Mandate

Articulating the Smart Grid Value Proposition for Energy Consumers

Consumer Concerns about Smart Grid Technologies


In some parts of the U.S. energy consumers are pushing back on utilities' planned or actual rollout of Smart Meters for residential and small commercial customers (i.e. energy consumers). Consumers in northern California complained earlier this year about meter accuracy and high bills after PG&E installed Smart Meters in portions of its service territory. PG&E and the California Public Utility Commission had to hire an expensive consultant to verify PG&E's Smart Meter accuracy and the soundness of its billing practices in order to address consumer complaints and to restore (at least partially) consumer confidence in its Smart grid investments.

In other parts of the country, most recently in Maine, consumers are challenging the installation of Smart Meters on health, privacy, and public welfare concerns. Citizens of Scarborough, Maine are backing an emergency ordinance to stop the installation of Smart Meters in that town until Central Maine Power (CMP) proves definitively that their health and privacy concerns are addressed satisfactorily. Elisa Boxer-Cook, a Scarborough resident leading the dissent says: "Show me peer-reviewed studies that there are no health effects". She also says "I want them to not install one more antenna, one more meter, until the studies show people and their private information are safe." City and state public officials are currently lending support to the City of Scarborough's moratorium on the installation of Smart Meters. Central Maine Power is trying to be as responsive as possible to Scarborough residents' concerns, including temporarily allowing those who are concerned to opt out of Smart Meter installation for their homes.

The above examples show clearly that utilities need to anticipate consumer concerns about the rollout of Smart Grid technologies and to clearly articulate the Smart Grid value proposition for energy consumers. Failure to do so could undermine consumer confidence in utilities' Smart Grid programs and could even lead to its repeal and redaction by state public utility commissions.

Customer Experience Management: A Framework for Addressing Consumer Concerns and for Developing a Smart Grid Value Proposition for Consumers

What can utilities do to anticipate consumer concerns about Smart Grid technologies? What approach should they use to articulate a viable Smart Grid value proposition for energy consumers?

The following diagram illustrates a framework that Infosys recommends for anticipating consumer concerns about Smart Grid technologies, and for developing segment-specific value propositions for energy consumers:

 

 Framework.jpg

Infosys believes that utilities must manage the customer experience for all key customer segments by designing and implementing the following processes/capabilities:

·         CRM Strategy

·         Customer Segmentation

·         Value Proposition (by customer segment)

·         Offers (for each segment)

·         CRM Capabilities

Utilities do not have much experience or expertise in developing value propositions for specific customer segments; up until recently, customer segmentation focused on the traditional residential, commercial, and industrial segmentation which ignores important differences within each classification. With the exception of the critical large commercial and industrial segment, which in most utilities has dedicated Account Managers and customer-specific offers, most utilities offered customers in the residential and commercial segments the same level of service whether it was needed, wanted, or made economic sense to do so.

Clearly, utilities need to sharpen their pencils to develop a CRM Strategy for customer segments based on segment-specific needs and wants rather than continue to provide a non-differentiated, uneconomic plain vanilla level of service to customers lumped into the traditional customer segment classifications. Utilities can and need to do better in meeting the needs of its customers, especially when introducing new AMI and Smart Grid services that come with a hefty price tag, and which have already raised health, safety, privacy, and economic concerns among these same customers.

In succeeding blogs, Infosys will describe the details of its recommended Customer Experience Management Framework and how utilities can leverage it to develop a CRM strategy and segment-specific value propositions and offers for energy consumers. Infosys will also identify and describe some of the critical CRM capabilities that utilities need to design, implement and manage the right customer experience for its key customer segments.

Without these capabilities, utilities increase the risk of its customers not embracing new AMI and Smart Grid services that may be justified from the utility perspective, but still need to be explained, articulated, and justified from the energy consumer perspective. If energy consumers do not "buy-in" to AMI and Smart Grid investments, utilities increase the risk of regulators not approving these investments for rate base treatment and subsequently, increase the risk of failure of their AMI/Smart Grid Program.

November 26, 2010

Smart Grid - is it really relevant in India?

 

The buzz is everywhere.

No power sector conference, no consultant, no analyst, or even humble utility employee can escape the noise being made on smart grid in India. Everyone, or almost everyone, seems to be excited and has happily joined the crowd heaping praise upon the so called smart grid. A few have even started claiming that they have done it all and have truly arrived!

Alright, so I am also excited and have spoken and written on the subject. I have talked about the great things it could do and some of the things it is already doing.

But is smart grid really relevant in India when we have so many basic issues to address in power sector?

What's the relevance of smart grid concepts in our current context of high AT&C losses and large demand-supply imbalance? Can we really say that it all applies in India or only a select few concepts and technologies apply here?

Are we going to easily and quickly import the idea from another context and try to replicate it in Indian context hoping that the benefits would repeat? It could be a dangerous approach!

I believe that we are going to have to think afresh about the business value of these technology-heavy investments specific to Indian context, or more strictly each type of Indian context. We may not be on solid ground if we assume that this is simply too "strategic" or unquestionable future of the industry to require any debate on its business case. Yes, often a smart grid pilot project may not have a business case by itself, but the post-pilot project should have clearly measurable benefits, typically to the utility, its customers and society at large.

I feel that this is where there would be some key differences and specifics we need to think through and analyse in detail when bringing all the much-admired smart grid concepts and technologies to India. It definitely holds a lot of promise and we could truly leapfrog, if we can do it right.

What's your view and experience so far?