EPRI research reveals what utilities don't know about customers
The Electric Power Research Institute (EPRI) has released a report based on the review of pilots and experiments conducted in the last 10 years that can help utilities understand what their customers want, and how they perceive and get value from electric services.
A better understanding of customers could allow utilities to offer services involving different forms of electricity pricing, energy information, and end-user technologies to improve customer knowledge and control over their energy use. In turn, utilities may be able to lower supply costs, increase the value of electricity to customers, and boost customer satisfaction resulting in a more productive electricity sector and fostering overall economic prosperity.
The report summarizes the body of research, and boils it down to "readiness scores" that may help utilities make a first assessment of the potential impact of various service offerings on the customer, saving the effort of wading through dozens of technical reports and establishing constructive dialogue among regulators and utilities regarding their potential to alter electricity consumption.
The research revealed that surprisingly little of what we need to know about customers and alternative program offerings has been affirmatively and credibly established, according to EPRI's Don Kintner.
- Credible estimates of price response to time-of-use rates, critical peak pricing, and peak time rebates have been established for residential and larger customers that voluntarily subscribe. However, these results extend only to the 3 percent to 20 percent of customers who actually participate. A critical research gap lies in understanding who decides to participate in such programs and why in order to understand how large the total benefits from such programs might be.
- Inclining block rates are thought to discourage consumption and increase conservation. While intuitively appealing, there is no credible evidence that this rate structure actually has this effect, perhaps because most customers have no way of knowing what their cumulative consumption is at any given time.
- There is mounting evidence that some forms of electricity consumption information (or feedback) induce small but important changes in usage, which may be sustainable. Two critical research gaps lie in understanding what factors customers take into account in deciding whether to participate, and whether the effects observed in the pilots will persist over time.