Designing for Success

Bottom-line Improvements Based on Model-Driven Visualization and Design Tools

Peter Manos
Principal Strategy Consultant – McDonnell Group


What do you think will help improve the bottom-line performance of a typical utility more—software standardization or business process standardization?  

For many utility executives this is not a “chicken or the egg” question.  It’s a hard boiled problem.  Why?  It’s because decision-makers often have to choose between software centric vs. business process centric options.

And another classic choice may also still present itself, between a one-stop shopping software portfolio (e.g. for O&M work across distribution, transmission and substations, etc.) and different best-of-breed tools tailored for specific areas. 

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Smart Grid Research Indicates That Utility Perceptions on “Prosumers” Evolved Rapidly 2010-2012

According to Wikipedia, the term “prosumer” was coined in 1980 by the futurist Alvin Toffler. The utility industry has begun using the term as it considers the evolving role of customers who will both consume energy and produce energy (or grid response services) to support system operations. The term is also used to strike a contrast between traditionally passive customers (i.e., ratepayers) and the more active customers involved in and interacting with the products they use.

A Kilowatt is a Kilowatt, but is a Negawatt a Kilowatt? Regardless, MATS rules, accelerating smart meter penetration, PV installation, micro-grid success, new DR rules, and a confluence of other market developments have all helped evolve utility perceptions on the future importance and potential of “prosumers.” Our research shows that this trend has accelerated significantly in the past two years.

In preparing an upcoming conference address I am delivering entitled “Energy Prosumers: Future Implications for Utility Customer Satisfaction & Distribution Operations,” I’ve been studying the sentiments of utility companies who have participated in our proprietary benchmarking research studies over the past 24 months. Most of these studies are never published, with the confidential results reserved for research sponsors and top-line feedback provided to the utility study participants themselves with limited distribution rights. I noticed in four different studies, conducted across a two-year period of time, some changes related to utility perceptions around demand side management (DSM) and distributed energy resources (DER).

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Balance of Power

By Eddie Solar

China_TrafficFinishing a summer internship at the McDonnell Group, it’s now time for me to head back to school.   I’ve been fortunate to gain valuable exposure to the everyday activities of a strategic marketing firm and to have learned a great deal about smart grid.  Before leaving, I’ve decided to take a crack at posting my first blog.

In the months prior to arriving at McDonnell Group, I was fortunate to pursue international studies in China this past term and got to see one of the country’s many enigmas first-hand.  Having prepared myself to experience a dynamic, emerging superpower, a few peculiarities stood out.

The first thing I noticed about Beijing was how long it took to move about the city in a car.  I remember vividly an evening out to dinner with my host family that ended at seven p.m.   The traffic was so thick that we did not get back home until ten o’clock and I still needed to study.  This family is part of China’s upper-middle class and they were able to afford two cars, as did most of their friends.  They loved their cars so much that they drove a couple of hours to work each day as opposed to taking a forty-five-minute ride on the subway.  My host mother told me it was because she “needed her space” and it made her feel good; like an individual rather than just a number.  I found this a bit funny because the huge volume of cars leaves little space on the roads.

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Reversing Reverse Impacts (Part II of II)

by Peter Manos
Principal Strategy Consultant

statue-of-liberty-pictureUnder-marketing is to blame not only for the broad, general under-appreciation of our industry’s accomplishments, but also for program-specific reverse impacts and for negative views about smart grid initiatives in general.

If you want perspective on the reality of our industry’s level of under-marketing, note that a consumer products company like P&G spent nine percent of its revenue on advertising last year, while the average utility spends less than one tenth of one percent on advertising.

Let’s review key examples of reverse impacts and suggest some best practices tips to address them.

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Reversing Reverse Impacts (Part I of II)

You put anti-lock brakes and air bags in cars, and what happens?   The results are mostly good, of course, but some people will tend to drive more recklessly.  Similarly, some smart grid initiatives can have reverse impacts.

For example, in the areas of energy efficiency (EE) and distributed energy resources (DER), reverse impacts due to “contrary” behaviors can reduce the expected benefits:

•    EE:  A percentage of users of “tankless” on-demand hot water heaters use more rather than less hot water because they no longer experience a water temperature drop when taking a long shower;
•    DER:  A utility’s expected reduction in peak demand is not realized after completion of a large rebate program for residential solar photovoltaics because a percentage of participants now leave more lights on and put their air conditioners on colder settings.  Subsequent research shows that the PVs make a subset of customers feel they now have “free” electric power;

hotwatersystems

Sound market research and communications strategies are needed to deal with these issues, because there are larger principles at work here.

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