What are utilities doing with all the data they receive from customers? How can it better be used to improve reliability and safety, to better serve customers, and to market products and services? A recent WEI forum featured a discussion between utility and third-party experts about operational analytics versus customer analytics. Will standard utility vendors win, or will vendors from outside the industry change the game?
Panel moderator Seth Nesbitt, senior vice president for sales, marketing and strategy at Ecova, asked utilities and vendors to share their views.
Caroline Winn, SDG&E: I believe that we’ll see more changes in the energy industry in the next five years than we’ve seen in the past 100. This change will occur through new policies, regulation, renewable portfolios and customer expectations. Our customers’ experience is defined by their retail experience. At their bank, they can take a picture of their check to deposit it, live chat with a store and get answers 24/7. They’re starting to expect the same from their power providers.
With smart meters, we are collecting more than 30 billion data points, which is about seven times greater than in the entire history of our company. Using this data, we can further improvements in operations, customer service and safety.
Todd Inlander, SCE: The information technology assets our company manages include the grid, SCADA (supervisory control and data acquisition) systems, SAP (systems, applications and products) and cybersecurity. We have millions of sensors picking up sub-second information. We have 4.9 million smart meters picking up hourly interval data, and these can be pinged as a resource. We’re collecting terabytes upon terabytes of information. We have mechanisms to ingest all of this data, but how do you turn it into useful information? How do we get more in touch with our customers with this greater intelligence?
Helen Burt, PG&E: Today we have better data than we did five or three years ago. So how do we pull it into our operational processes? The number of customers who do everything online has gone from 30 percent in 2008 to 55 percent today. Conducting business online is growing across all demographics, so you can justify the investment in serving customers digitally.
On the operating side of the business, we use smart meter information for all of our voltage work. We ping our devices and use the data for planning purposes. We started targeting our customers on demand response systems by where we needed capacity improvements from distribution substations. We learned that the capacity issue was just a few hours during a few months. Is there a better way than reconductoring and upgrading transformers? Yes, we can target programs for demand response, for smart air conditioning for refrigerating, at those customers on those feeders.
On the gas side, we have smart pigs, which inspect the integrity of high-pressure pipelines, and our vehicles have leak-detection devices that can detect a neighborhood’s smallest leaks.
Ed Abbo, C3 Energy: The trend is toward using information technology that allows us to process data in real time. From enabling an online customer experience like Amazon, to dramatically increasing the efficiency of AMI operations, and reducing technical and nontechnical loss, experts have estimated the potential return on investment of smart grid data analytics to be about $300 per customer, per year.
Alex Laskey, Opower: A couple of things in our business have remained constant: increasing demand and the need for a central power plant. However, we no longer can count on ever-increasing demand for our electricity and products. As a result of the declining cost of solar, we can’t count on central power stations as the only way to get revenue from electricity. Therefore, we need to keep that relationship with the customer in mind.
Winn: We have a few projects, such as our customer analytics system. Our customer data was spread across 30 or so different, disparate systems, from an Excel spreadsheet to a CIS system. Our customer segmentation system will capture all of our customer information, such as if they prefer digital channels, pay online, have electric vehicles or solar. That will be the hub for our other offers. We’re implementing a smart energy advisor desktop. When a customer calls in, information will pop up about what segment they’re in, how much energy they use, and what offers they might be interested in. If they call about a power outage or a payment, we can talk to them about going paperless or enrolling in my account.
One of our main goals is to reduce our rates and customer bills and we’re doing that through operational efficiencies. These data projects are a part of that effort. We’ve streamlined our IVR (interactive voice response) to reduce the number of calls into our contact center. There’s nothing more frustrating than taking three minutes to get to the right person. Using analytics, we now know the top 10 areas people call about. Now we can direct the customer to the right answer or department in 25 seconds. If you can contain the call in the IVR, you save a call to the customer center. This not only improves the customer experience, it has allowed us to reduce staffing in our contact center, reduce handling time, and demonstrate some key performance indicators that show that we’re going in the right direction.
On the social media side, we have a small group monitoring what people say about us 24/7. Consumers are surprised when we respond to a tweet. Fifty percent of the tweets are about outages. We can use that opportunity to direct them to our mobile app and to our website, and around 85 percent of them are responded to within one hour. We can see how long they’re on our website, see if we need to tweak our menu, and count how many clicks it takes them to get to a certain page.
Burt: The customer side is always competing with infrastructure for budget dollars. As a utility, capital goes to building the value of the electric or gas infrastructure. Therefore, when you’re trying to build major improvements on the customer side of the business, tangible benefits really matter. We upgraded our database in 2007, so we know who calls us and why. In the process, we learned that one-third of our customers want to do business online. When a customer has to call us, it is possible that he or she is already angry, and it costs us 12 times what it would have cost to serve them online. Now, 55 percent of our customers are communicating with us through our website, and we’ve optimized it for mobile devices. Our customer satisfaction rate is much higher.
Laskey: Not only is there a strong business case for data analytics, there’s a benefit to the customer. New Zealand has a very competitive landscape with lots of churn (attrition). Mercury Energy installed smart meters and billed their customers every other month, which could generate a large bill. Customers would call, complain and then leave the utility. We started deploying usage alerts and credit card fraud alerts. Using email, text, or phone calls, we let customers know as little as five days into month that they were on track for a high bill. We saw a 20 percent reduction in phone calls for high bills. There also was a three percent overall increase in satisfaction and a reduction in churn. Plus, the utility is able to cross-sell those customers new products and services. It’s a win/win for companies and customers, so the business case is straightforward.
Inlander: Considering the velocity at which information flows, if you have a 15 to 20-year-old customer service system, you can’t possibly keep up. It’s almost like the putting lipstick on a pig. We’re constantly trying to keep up with the evolution of mobile and other technologies. On the grid side it’s similar. Smart meters provide us with a ton of data. We can better understand outages by pulling voltage data and predicting analytics around that. We also pull data from our SCADA system for predictive intelligence. We’re putting information into the hands of people who are best suited to do something about it.
You have to take all of this data and visualize it. We can map the grid and incorporate transformer information into that. Then, we can see the connection between transformers, circuits and smart meters.
Abbo: There are dozens of cases for using data analytics to optimize grid operations and planning. One is reducing nontechnical loss and the resultant unbilled energy. In order to have an effective nontechnical loss platform, you need to tap into the many legacy systems: the outage management system, maintenance systems, billing, meter data management, and advance metering infrastructure head end systems. Recently, we deployed our system at Baltimore Gas and Electric (BGE), an Exelon utility, which is trying to reduce its unaccounted-for energy from 1.4 to 0.7 percent.
A big part of that project was tying into all of their individual systems and then ingesting all their data at rapid rates — 35 billion data points processed at rates of 6.5 billion rows per hour. We then analyzed it using 135 different analytic algorithms. Out of that, we identified malfunctioning meters or fraud cases. The business case for BGE is $20 million a year in benefits.
We have an even larger deployment in Europe, where they have 40 million smart meters deployed. Prior to our solution, they weren’t able to analyze the three billion data points generated per day, without a platform. They want to keep five years of that, which totals about seven trillion data points.
We can’t do this alone. We need our third party vendors to partner with us, develop solutions, work with our customers, and take this data and do things with it.
Burt: The use of grid analytics can drive sustainable results. We’ve improved our reliability five years in a row. Our investments have been formed by grid-level analytics. It’s also helped us improve safety. In our service territory, we have many older, residential homes. One advantage of smart meters is that they not only provide voltage monitoring, but also heat monitoring. As homes get sold and are upgraded with new appliances, sometimes the wiring in the home can’t handle it. We can monitor that and can preemptively save houses from potential fires. It reinforces the notion that public safety is foremost.
Winn: Using predictive analytics, we can perform condition-based maintenance. By putting sensors at our substations, we can monitor the status of transformers and circuit breakers. We used to replace parts every five years whether they were needed or not. Now we replace items based on their condition.
Laskey: Data analytics is going to become a commodity. If we send a fraud alert to someone, we get a positive response. There are certain customers who like the idea of someone looking after them. Analytics are necessary, but not sufficient. Connecting with customers is needed too.
Abbo: Analytics are in the background, but we can’t lose sight of the customer experience. Instead of just telling the customer that they’re exceeding their bill, is there a way to allow the customer to run their home in a certain way? Some Europeans are doing this with smart services, such as smart heating and cooling. We need to give our customers complete solutions — we need to be setting our sites higher.
Burt: Take a look at Uber, the new ride-sharing service. I love it. I can go online, I know where the car is and what the cost will be. I know when the cost is higher due to demand. It’s a very transparent interaction.
I see that happening with Google’s Nest thermostat. It can learn your schedule and automatically kick on your air conditioning. Greater customer control and choice is where the market is going. As a consumer, I’ll expect my utility to be able to do innovative things, probably before they’re ready to do so.
Inlander: There is a rising expectation in user experience. From my Volt automobile to the apps on my phone, these are things that I didn’t know I needed, but now I couldn’t live without them.
Winn: The deployments of smart meters and customer questions about privacy have gone hand in hand. We have to be good custodians of our customers’ data. Our office of customer privacy sets procedures and makes sure that we’re in compliance with federal and state regulations. We send out privacy notices to customers. We have personal identifiable information about our customers, such as social security numbers, bank account numbers and energy data. We have to be sure that third parties will treat that data with the same level of confidentiality. We have data-sharing rules with third parties, we perform security checks, and we determine how they dispose of the data once they’re done with it.
Burt: We also have an office of customer privacy, and I’m glad we established it before the Target and Home Depot data breaches. We walk a fine line about how we look at third parties, and they go through rigorous processes about how we get data to them. If there’s an outage, our customers don’t want specific information going out about their stats. Commercial customers don’t like it because it’s a competitive issue. Residential customers don’t want others to know that they’re without power because it’s a security and safety issue. We just have to be smart about what we’re sharing and with whom.
Laskey: The importance of privacy to customers is contextual. People carry their phone around sending information about where they’re going. Banks know how well we’re doing financially and what we’re spending our money doing. Our service providers are providing real value with the data. When you think about concerns about privacy, what are we giving customers in exchange for this data? For example, using behavior data, customers will be able to set their thermostat not just for a temperature amount, but also for a bill amount.
Abbo: As we IP-enable the grid and home infrastructure, the area of cybersecurity is one that we need to pay attention to. How do we evaluate intrusion protection information in context? Of the thousands of issues, which is the one to address immediately? Are you addressing the most critical threats that can take out the most customers?
Inlander: We acknowledge that there is a high demand for information outside our utility walls. We need to better anticipate the demand for information, how we capture it, and how we tag that information. So, if something happens, we have awareness around it. We need our compliance, customer service and data compliance people to establish the rule set, so we can protect it as much as possible.
Winn: We can’t do this alone. We need our third party vendors to partner with us, develop solutions, work with our customers, and take this data and do things with it.
Burt: We’ve been in business with Opower since 1998. Many third parties are nimble, quick and can add value. Their best option is working with utilities. With Google and Apple, it will be interesting to see how this develops. There’s a play for utilities to be enablers, because it’s more secure for consumers.
Laskey: There was talk about Google as an energy provider. Seven years ago, we could have gone directly to consumers or work with utilities. But we decided to work with energy utilities with all the transparency they provide, and it was the right decision. Utilities are in the lead position to reinvent this industry, but it’s not a foregone conclusion. Google is putting devices in the home that can manage energy consumption, and its investment in solar energy generation puts it in an interesting position. Verizon and Comcast are looking at energy management to compliment the services that they provide.
We can’t rely on the grid and monopolies to stay on top. There’s huge opportunity to take advantage of data and processing power to introduce new relationships with customers. This is particularly the case with distributed generation resources. One third-party marketer is spending $2,500 in marketing and equipment to get a customer. Utilities could be gaining that business for less.
Ed Abbo is C3 Energy’s president and chief technology officer. C3 Energy provides smart grid analytics SaaS/PaaS solutions that enable utilities to realize the full promise of their investments in the smart grid. He formerly served as senior vice president at Oracle Corporation, and senior vice president and chief technology officer for Siebel Systems.
Helen Burt is senior vice president of Corporate Affairs, PG&E Corporation. Prior to this role, she was Pacific Gas and Electric Company’s chief customer officer, responsible for leading PG&E’s marketing, product development, sales and services, as well as all meter-to-cash operations, contact centers and digital strategy. As chief customer officer, Burt also focused on developing and implementing customer-centric, enterprise-wide business strategies, and led extensive energy efficiency, solar and demand response portfolios.
Todd Inlander is Southern California Edison’s vice president and chief information officer, responsible for managing the information technology infrastructure and applications, including cybersecurity.
Alex Laskey is president and founder of Opower, a leading provider of cloud-based software for the utility industry. Opower works with more than 90 utilities in eight countries, and serves more than 32 million customers. Alex has met with President Obama to discuss energy policy, innovation and job creation; and has testified before the U.S. Senate. He also has worked in politics and policy, serving as a campaign manager, strategist and a public-opinion analyst.
Seth Nesbitt leads Ecova’s sales, client management, marketing and business development teams. He and his team are responsible for bringing to market compelling and innovative solutions that grow results for Ecova’s clients on their efforts to save resources. Prior to joining Ecova, Nesbitt was in charge of multiple B2B and products and solutions marketing campaigns for a variety of companies dealing in emerging technologies within rapidly changing and high growth markets.
Caroline Winn is vice president, customer services and chief customer privacy officer for San Diego Gas & Electric Company, one of Sempra Energy’s regulated California utilities. She oversees all customer-related activities for SDG&E, including call centers, energy efficiency, demand response and customer assistance programs, customer privacy, revenue cycle activities, corporate brand, marketing and customer communications.