The McDonnell Group

by Nancy Broe

ATLANTA — September 13, 2010 —  Remember the Old School Dad?  He didn’t need to tell you he loved you; he put food on the table and a roof over your head.  He didn’t need to listen to you; everybody knew that “Father knows best.”  He didn’t abide criticism; it was his way or the highway, “my rules under my roof.” 

Witness today’s dad: by and large, modern American man has embraced the once disdained practices of diapering, dishwashing, and discussion as legitimate functions of his fatherhood.  He encourages his kids to ask questions; he may even listen to their input.

The energy industry faces a similar transformation.

Utilities haven’t traditionally spent a lot saying how much they care about the consumer:  their actions have been there all along -- delivering reliable, safe, relatively inexpensive power for almost a century.  There’s something to be said for this; what customer wouldn’t prefer getting good service without a lot of blab to getting a lot of words thrown at them to “spin” away poor service?

Old school utilities have progressed as listeners, but have a ways to go.  While some are quite democratic in their internal operation and others engage in annual customer satisfaction surveys and community outreach programs, or even include local representation on boards to help set priorities, few have internalized the dramatic shift in consumer involvement that smart grid will require.  Perhaps it’s a lot to ask that a small utility not only keep the lights on but also commit to ongoing communications to articulate in layman’s terms the real needs and priorities of the industry.  Increasingly, though, such efforts will become essential to undergirding a redefined relationship with the consumer.  Without programs to formally and informally listen to consumers, utilities may find it progressively more difficult to shore up satisfaction and support for needed infrastructure investment.

Teach Your Parents Well?

Despite progress, paternalism lingers-- buoyed partly by the knowledge that delivering electricity is a complex process most customers do not (and do not want to) fully understand.   There’s something positive to it, though; electricity providers have always had a genuine sense of mission rooted in serving the public good.  Thankfully, there is little sign of that core value disappearing.

Like organizations in many American industries, many in the energy industry –- vendors and utilities alike –- see public relations as primarily one-way communication.  Bring in the professional persuaders to get customers or investors on our side.  Approached this way, consumer education efforts can offend more than convince.  Remember the outrage when it was disclosed that BP spent as much on slick “we’re on your side” advertising, as they contributed to each of the states recovering from the oil spill? 

Reaching for Partnership

When we were kids, it was easy to think Old School Dad had all the answers; after becoming parents ourselves, many of us grudgingly acknowledged the task was harder than it looked.  We even admitted that maybe, just maybe, we’d taken the old guy for granted.

Like the aging Old School Dad, our power infrastructure is getting creaky.  What was robust and state-of-the-art a few decades back is now as passé as dad’s old pipe and polyester pants.  Unlike dear old dad, the utility industry readily admits it; they see the impending retirement of their aging workers; they are facing the need to replace deteriorating transformers, nuclear reactors, and other vital pieces of infrastructure that went in thirty years ago and more.  They just aren’t communicating very successfully about it.

A consumer/utility partnership remains elusive.  Utilities seem reluctant to fully embrace their consumers as partners who need to see the big picture and have a role in determining the direction of their energy generation, transmission, and distribution.  And consumers seem intermittently interested and tremendously bored by the entire discussion.

Going forward can be tricky for the industry, in which utilities have a legitimate need to lead, as the providers who are proficient in the technology itself, but consumers today are like modern kids:  they have strong opinions about energy and demand a lot more than being told to unquestioningly accept (and pay for) what they’re told is best for them. 

The transformation is happening; but there is a long way to go.  On the utility side, the first fiascos with smart meter rollouts opened industry eyes to the need to smooth the path of customer acceptance.  A movement is growing to assemble “best practices” for smart grid customer relations and meter rollouts.  New models may help.  Phil Carson’s “Anatomy of a Successful Smart Grid Rollout” in Intelligent Utility Daily, mentions a program where industry groups provide utilities with program guidelines they can adopt.  Utilities like Austin Energy are preceding their smart meter rollouts with customer education, staging the changes to their rates, proactively responding to glitches and questions.

The smart grid evolution underway demands more than utilities investing in slick packaging to ease customer acceptance.  By definition, the smart grid will eventually enfold consumers into a two-way flow of information and in some cases power in which they may become distributed generators and storers of energy as much as users of it.  What we’re seeing is the direct democratization of energy via distributed architectures, and like any democracy, it depends on citizen education.

Educating the Impetuous American Consumer

Beyond getting consumers to be happy about their new fancy meters, utilities face a much larger challenge.  They are going to have to participate in local and national educational efforts in ways never before conceived of.  We’re going to need to tell the dull, boring, essential picture of the transformative role of smart grid beyond the customer meter. 

That’s not always easy.  I’ve talked with top national energy reporters about stories on transmission and distribution, for example, and often hear that consumers don’t care about the dry technical stuff they can’t see.  A nice juicy outage, yes, that interests them; the thousand dreary things that must be done each day to prevent one –- including investing in smart grid innovations –- not so much.  As long as that prejudice remains, consumers will continue with the misconception that their home meter contraption defines smart grid.  The larger efficiencies promised by the technology lie way beyond that; but few seem to know or want to know more about it.

Utilities face a fine line to communicate urgency and proactivity without being alarmist.  What consumers don’t know about the smart grid can hurt them; and if it does they will be darned mad.  Failure to implement the existing tools to address the strains on our infrastructure will almost certainly lead to outages and exponential costs. 

In some ways, perhaps the problem is partly that consumers liked the old paternalistic model, where they didn’t have to think too much and they would be provided for amply.  Consumers may not like hearing what they need to know about aging infrastructure, workforce, and potential security or shortage crises.  With all the economic challenges facing the boomer generation, who really wants to learn that without significant investment, it will no longer be possible to maintain the impressive reliability, safety, and baseline efficiency that energy providers of the first century made us all take for granted? 

Sure, life may have been simpler in dad’s autocratic day, but today’s utilities face challenges more complex -- and more promising -- than ever before.  The need to replace old workers is an opportunity to train an energetic new breed of energy technologists; the need to replace aging infrastructure is a chance to resolve vital issues of energy independence, efficiency, and environmental concerns.  When industry and consumer embrace the partnership they are already engaged in, perhaps we can go forward together, to mutually manage our power needs in a way that not only does the pioneers of energy proud, but addresses the shortcomings weighing on the current and future age.