Customer Support For SmartGrid / Smart Meter Investments

Transcription

1 Customer Support For SmartGrid / Smart Meter Investments February 2011 David C. Lineweber, Ph.D. Managing Partner 601 SW Oak Street, Portland, OR , ext. 802 David.Lineweber@yougov.com definitiveinsights.yougov.com

2 1 Background for the Research Much has been written in both the industry and the popular press about the need to move the US electricity distribution infrastructure onto a smarter system that takes advantage of modern digital technology While much of this investment would be behind the meter, other elements of this investment include the electricity meter itself, along with other system elements, potentially including both options for customer interaction and within-home automation and / or communications Although the cost of these investments is substantial, most industry commentators have argued that the investments are necessary in order to bring the US electric grid into the 21 st century, but also to yield a variety of both short-term and long-term benefits for end customers (including, but not limited to, residential customers) Even if it is true that residential customers would ultimately see a variety of benefits that would flow from SmartGrid investments, the reality is that those customers are not yet getting the message Available research suggests that relatively few residential customers have much of an awareness of the existence of, or the reasons for, SmartGrid investments 2

3 1 What We Intended to Accomplish With the Research How then to talk to residential customers about these issues? This research was designed to fill in the gaps in our understanding of customer perceptions, and to identify the information needed to answer customer questions about SmartGrid investments Specific issues addressed included: Do customers actually value the SmartGrid-enabled benefits that industry observers have suggested will (or at least should) have value for them? Do customers think that they will ever actually experience the benefits that will be enabled by SmartGrid / Smart Meter investments? Do customers value (and think they will ever actually experience) the benefits that should be enabled by dynamic pricing options enabled by Smart Meters? At this point, do customers support or oppose SmartGrid investments, and why? Are there some customer groups more or less supportive of these investments? What could / would need to be done in order to address customer concerns about SmartGrid investments? 3

4 1 Summary of Survey Methodology An online market research survey was conducted with a representative sample of directly billed electricity customers in the continental United States Survey respondents were solicited from a commercial online research panel and were asked to complete a 20 minute online survey Potential respondents were screened to ensure they qualified for the survey as: Directly billed electricity customers Primary or shared energy decision maker Had qualifying employment categories Fell into qualifying age categories) A total of just over 1,100 survey responses were collected, with minimum sub-samples assigned to each of 10 US regions 4

5 2 Executive Summary Key findings A critical gap for residential customers, lies in the fact that they would find value in SmartGrid enabled benefits if they experienced those benefits they just have no confidence that SmartGrid investments will actually yield those benefits. Residential customers generally think that the benefits which have been claimed for SmartGrid (SG) investments would, in fact, count as benefits from their perspective. Most of the eleven benefits tested were viewed as either important benefits to receive, or at least as nice to have But most customers are not convinced that they will ever actually experience those benefits The pattern is similar for the potential benefits associated with dynamic pricing options that might be enabled by Smart Meter (SM) installations. Most customers are willing to say that the tested benefits would be important, if they happened, but relatively few think the benefits are likely to occur 5

6 2 Executive Summary Key findings So, customers would like the benefits if they received them: But they re not confident they will receive them. And they have no confidence that the potential down side risks will be resolved in their favor Customers also worry that there will be a down side to SmartGrid and Smart Meter installations Customers say they are very concerned about a variety of questions that have been raised about SmartGrid installations, including such things as: Will the meters really be more accurate? Will new pricing schemes be implemented in a fair way? Can they trust utilities to handle more detailed information about their energy usage in an appropriate, and secure, way? And most are not at all confident that they will like the answers they ultimately receive to these questions 6

7 2 Executive Summary Key findings Smart Meter opponents, as a result, are more ardently opposed to these investments than Smart Meter supporters are vigorous proponents. It will be much easier, as a result, to activate (and build) Smart Meter opponents than supporters Even so, a plurality (but not a majority) of customers support the broad installation of Smart Meters, although a significant minority also strongly opposes them But a key issue here is the asymmetry of the perspectives at the two ends of the scale Supporters of Smart Meter installations like the potential benefits, think they might (or will probably occur), and are not terribly worried about the risks Opponents of these installations, on the other hand, think the benefits will probably not occur, and think the risks are both important to them and likely to be resolved against them 7

8 2 Executive Summary Parsing customers into segments reveals the following groups: 45% 20% 15% 20% Consistent Supporters Don t Care Doubtful Ardent Opponents Believe in global warming Worry about environmental impacts Value energy efficient product features Democrats Live in other than single family homes Describe themselves as less informed Care less about energy efficient product features Attach less importance to SG benefits Less likely to think benefits will occur Attach less importance to SG benefits and less likely to think they will occur Attach high importance to questions and unlikely to believe they will Align with Tea Party Do not believe in global warming Not concerned about environmental future Older, male, married, homeowners Watch Fox News daily 8

9 2 Executive Summary Key findings Given these findings, the challenge in designing marketing communications that will encourage customer support for SmartGrid investments will be a very difficult one On the face of it, promoting more positive SG-related opinions within any of the four segments will be complicated Consistent Supporters are obviously positively disposed toward supporting SmartGrid investments, but their questions about whether or not they will ever see promised benefits will be challenging to answer conclusively The Don t Care segment is just that and not likely to change, since this is a basic feature of their approach to this category of activity, and not just a lack of information that they will want to engage in changing The Doubtful segment is probably more likely to become more negative toward SmartGrid investments, than to become more positive; their doubts about both the likely value of SmartGrid and Smart Meter investments and the potential downsides from those investments lead them to worry a good deal about the advisability of such investments Ardent Opponents are very unlikely to change their views since those views are part of a broader political perspective that appears to be part of their core belief system 9

10 2 Implications for Marketing Communications In order to be effective, marketing communications would need to address customer concerns about: How and when they will see the promised benefits How they can be sure that they will not experience potential negatives from Smart Meter investments The issue, then is not simply in communicating potential benefits to customers they are willing to assume that at least some of those benefits would be good to have the key question is whether or not they will ever actually experience those benefits (despite assurances) and whether or not their other concerns will be adequately addressed Giving customers good reasons to believe that they can be confident about ultimately receiving promised benefits and avoiding potential problems will not be a simple communications task; especially given how these concerns interact with other strongly felt opinions 10

11 Outline Chapter 1 Introduction 2 Chapter 2 Executive Summary 5 Chapter 3 Key Findings: 13 1 Customer Reaction to Potential SG / SM Benefits Customer Reaction to the Potential Benefits of Dynamic Pricing Options Customer Reaction to Potential Questions / Concerns That Have Been Raised About SG / SM Investments Overall Customer Reaction to Smart Meter Installations: Who supports / opposes these installations, and why? Marketing implications 63 Chapter 4 Appendix 68 11

12 Outline Chapter 1 Introduction 2 Chapter 2 Executive Summary 5 Chapter 3 Key Findings: 13 1 Customer Reaction to Potential SG / SM Benefits Customer Reaction to the Potential Benefits of Dynamic Pricing Options Customer Reaction to Potential Questions / Concerns That Have Been Raised About SG / SM Investments Overall Customer Reaction to Smart Meter Installations: Who supports / opposes these installations, and why? Marketing implications 63 Chapter 4 Appendix 68 12

13 3.1 Which SG-Based Benefits Might Accrue to Residential Customers? YouGov Definitive Insights staff reviewed existing discussions of SmartGrid and Smart Meter issues in the press and identified eleven benefits that industry commentators have argued should (or at least could) accrue to customers as a result of these investments, including: More accurate meter readings and bills Information about when renewable electricity generation sources are online and providing electricity Easier / faster customer service for things like starting or stopping your service any day at any time, or getting customized billing dates Having fewer and shorter power outages Making it possible to have automatic notification to the utility of power outages when they do occur Getting access to real-time information about your household s energy use and bills Getting access to detailed information about how your household uses energy (i.e., which appliances use how much energy) Being able to track energy use daily, weekly, or monthly, and establish and follow an energy budget Making sure that your utility will have enough electricity available to recharge electric vehicles as these vehicles become more common Make it easier for you to sell power back to the utility if you have solar panels or other means of generating electricity at your home Over the long term, a reduction in electricity costs and prices as the system operates more efficiently 13

14 3.1 How Do Customers Evaluate Those Benefits? The team explored residential customer assessments of these potential benefits by: Asking customers if they viewed each benefit as important, nice to have, something they didn t care about, or something they d rather not see happen Asking customers whether they thought that each benefit was likely to occur given SM investments, something that might or might not occur, something that probably would not occur, or something that would probably not occur Asking which customer groups were more (or less) likely to attach importance to the benefits, or to be more confident about SM investments yielding those benefits Asking if those customers who attached more importance to the benefits (those who cared more about the outcomes), were more or less likely to believe that those outcomes would occur 14

15 3.1 Most Customers Certainly Like The Idea of Benefits An Important Benefit to Me If It Occurred Nice to Have, But Not a Big Deal Not Something I Care About Something I d Rather Not See Happen Long term reductions in electricity costs and prices 75% 19% 5% 1% More accurate meter readings and bills Having fewer and shorter power outages Automatic notification of power outages Detailed info about household energy use 71% 23% 5% 2% 65% 27% 7% 1% 52% 36% 11% 2% 46% 36% 12% 6% Being able to track energy use 41% 37% 16% 5% Access to real-time information about energy use Make it easier to sell power back to the utility 41% 39% 16% 4% 37% 33% 25% 4% Easier / faster customer service 37% 41% 18% 4% Info about status of renewable generation Ensuring adequate electricity to recharge EVs 28% 38% 29% 4% 27% 32% 30% 11% 15

16 3.1 But Few Are More Confident Than Saying The Benefits Might Occur Likely to Occur if Smart Meters are Installed Might or Might Not Occur Probably Won t Occur The Opposite Would Probably Happen Long term reductions in electricity costs and prices 27% 39% 21% 13% More accurate meter readings and bills Having fewer and shorter power outages Automatic notification of power outages Detailed info about household energy use 43% 43% 10% 4% 17% 45% 31% 7% 33% 48% 15% 4% 35% 46% 15% 4% Being able to track energy use 41% 44% 12% 3% Access to real-time information about energy use Make it easier to sell power back to the utility 40% 46% 11% 4% 23% 48% 23% 6% Easier / faster customer service 32% 45% 18% 5% Info about status of renewable generation Ensuring adequate electricity to recharge EVs 23% 49% 23% 5% 19% 47% 28% 7% 16

17 3.1 The Benefits Rated As Most Important Have the Greatest Gaps vs Those Rating The Benefits As Likely to Occur Core Smart Meter Benefits Rated As Likely to Occur Compared to Ratings of Important Benefit: All Customers 0% 20% 40% 60% 80% Long term reductions in electricity costs and prices More accurate meter readings and bills Having fewer and shorter power outages Automatic notification of power outages Detailed information about household energy use Being able to track energy use Access to real-time information about energy use Make it easier to sell power back to the utility Easier / faster customer service Information about status of renewable generation Ensuring adequate electricity to recharge EVs Likely to Occur An Important Benefit If It Occurred 17

18 3.1 There is Good News: Customers Who Rate the Benefits As Important Are Also MORE Likely To Think They Will See Those Benefits Core Smart Meter Benefits Rated As Likely to Occur: All Customers vs. Those Who Say The Benefits are Important 0% 20% 40% 60% 80% Long term reductions in electricity costs and prices More accurate meter readings and bills Having fewer and shorter power outages Automatic notification of power outages Detailed information about household energy use Being able to track energy use Access to real-time information about energy use Make it easier to sell power back to the utility Easier / faster customer service Information about status of renewable generation Ensuring adequate electricity to recharge EVs Total Customers Those Customers Who Rate the Benefit as Important 18

19 3.1 Views on Benefits Of course, customers differ on their views of these subjects. Which Groups Attach More Importance to the Benefits? Which Groups Are More Likely to Expect to Receive the Benefits? Those in the Southeast Those in the Mid-Atlantic Those who support Smart Meter installations Those who support Smart Meter installations Those who think the economy will improve Those who think the economy will improve Democrats Democrats Lower income (but not consistently) Lower income / smaller homes Those with positive opinions of their utility 19

20 3.1 Bottom Line: Smart Grid / Smart Meter Benefits Customers at least like the idea of most of these benefits They would generally rather have them than not (and some they like a lot) Customers are less sure whether or not they will actually ever experience these benefits And the benefits that tend to be viewed as most important are also the ones that customers are least likely to think will ever happen Some customer groups tend to both rate the benefits as more important AND believe the benefits are more likely to occur Those who support the SmartGrid concept overall Democrats Those who think the economy will improve Consistent with this finding, customers who rate the benefits as important are somewhat more likely to expect to experience them (though big gaps still exist) 20

21 Outline Chapter 1 Introduction 2 Chapter 2 Executive Summary 5 Chapter 3 Key Findings: 13 1 Customer Reaction to Potential SG / SM Benefits Customer Reaction to the Potential Benefits of Dynamic Pricing Options Customer Reaction to Potential Questions / Concerns That Have Been Raised About SG / SM Investments Overall Customer Reaction to Smart Meter Installations: Who supports / opposes these installations, and why? Marketing implications 63 Chapter 4 Appendix 68 21

22 3.2 How Do Customers Evaluate Benefits That Might Derive From Dynamic Pricing Options That Might Be Enabled by Smart Meters? The team also explored residential customer assessments of dynamic pricing-related benefits, starting these discussions by providing a description of dynamic pricing concepts: Some electric utilities have also talked about using Smart meters to support new kinds of electricity pricing arrangements. Until now, most residential customers have paid the same amount for each unit of electricity they use regardless of what time of day they use it. Rates for each unit of electricity may be lower or higher in different seasons, but they do not vary by time of day (e.g., customers pay the same amount for each unit of electricity they use at 2 pm as they pay for the same unit of electricity they use at 10 pm). With Smart meters, utilities would be able to match hour to hour and day to day changes in the cost of producing electricity to the price that customers pay for electricity. As a result, on summer weekday afternoons when electricity use is high and the average cost to produce all of that electricity is the highest the rates that customers pay for using electricity might be higher than they would be for electricity used at night when the demand for electricity is lower. Under these arrangements Peak time electricity would be priced at higher rates than Off Peak electricity, and the new Smart meters would be able to handle these price differences. 22

23 3.2 Dynamic Pricing Benefits Tested The questionnaire asked first about the importance that customers attach to each of these benefits, and then followed on with questions about customer thinking regarding the likelihood that each benefit would actually occur: You would have more control over your electricity use You could more actively manage your use of electricity You could more easily reduce your electricity bills because you could avoid use during peak pricing periods Customers as a whole could reduce their total demand for electricity, eliminating the need for building some new electricity generating stations By reducing the total demand for electricity, you could help meaningfully reduce the future cost of providing that electricity 23

24 3.2 Customers Also Believe That These Benefits Would Be Either Important Or At Least Nice to Have An Important Benefit to Me If It Occurred Nice to Have, But Not a Big Deal Not Something I Care About Something I d Rather Not See Happen You would have more control over your energy use 56% 29% 10% 6% By reducing the total demand for electricity, you could help meaningfully reduce the future cost of providing that electricity 54% 30% 9% 6% You could more easily reduce your electricity bills because you could avoid use during peak pricing periods 56% 27% 9% 8% You could more actively manage your use of electricity 54% 30% 11% 6% Customers as a whole could reduce their total demand for electricity, eliminating the need for building some new electricity generating stations 48% 34% 11% 6% 24

25 3.2 But No More Than Around A Third Of Customers Are Confident About Receiving These Benefits Likely to Occur if Smart Meters are Installed Might or Might Not Occur Probably Won t Occur The Opposite Would Probably Happen You would have more control over your energy use 36% 39% 15% 10% By reducing the total demand for electricity, you could help meaningfully reduce the future cost of providing that electricity 27% 42% 19% 12% You could more easily reduce your electricity bills because you could avoid use during peak pricing periods 36% 39% 14% 10% You could more actively manage your use of electricity 39% 37% 17% 7% Customers as a whole could reduce their total demand for electricity, eliminating the need for building some new electricity generating stations 25% 44% 22% 10% 25

26 3.2 So Again, More Customers Rate the Benefits as Important Than Believe the Benefits Are Likely to Occur Dynamic Pricing-Related Benefits Rated As Likely to Occur Compared to Ratings of Important Benefit: All Customers 26

27 3.2 Although Customers Who Value The Benefits Most Are Also More Likely to Think They Will See Those Benefits Pricing Related Benefits Are Likely to Occur: All Customers vs. Those Who Rate The Benefits as Important 27

28 3.1 Customers Views of Dynamic Pricing Of course, customers differ on their views of these subjects. Which Groups Attach More Importance to the Dynamic Pricing Benefits? Which Groups Are More Likely to Expect to Receive the Dynamic Pricing Benefits? Those in the Southeast Those in the Mid-Atlantic Those who support Smart Meter installations Those who support Smart Meter installations Those who think the economy will improve Those who think the economy will improve Democrats Democrats Lower income (but not consistently) Lower income / smaller homes Those with positive opinions of their utility 28

29 Outline Chapter 1 Introduction 2 Chapter 2 Executive Summary 5 Chapter 3 Key Findings: 13 1 Customer Reaction to Potential SG / SM Benefits Customer Reaction to the Potential Benefits of Dynamic Pricing Options Customer Reaction to Potential Questions / Concerns That Have Been Raised About SG / SM Investments Overall Customer Reaction to Smart Meter Installations: Who supports / opposes these installations, and why? Marketing implications 63 Chapter 4 Appendix 68 29

30 3.3 Exploring Potential Customer Questions and Concerns The questionnaire also posed a series of questions or concerns regarding SmartGrid investments and asked customers, first, how much they cared about how each question would be resolved, and second, whether or not they thought they would be comfortable with the ultimate resolution of each question: Will utility companies (and others) know more about how customers use electricity than they need to know, or should know? Can utility companies be trusted to safeguard the security of information and data about how customers use electricity? Will customers need to spend much more time thinking about, and managing, their electricity use? Will customers see higher costs in the near term in order to pay for expensive new meters? Will the new meters in fact be more accurate, or less accurate? Will customers ever see any long term savings as a result of installing the new meters? Can utility companies be trusted to implement new pricing arrangements in a fair and honest way? 30

31 3.3 Most of the SG-Related Questions Are Seen As VERY Important How This Question Is Resolved Is Really Very Important to Me I Care About This Question, But It s Not a Big Deal This is Not Something I Care About Will customers see higher costs in the near term in order to pay for expensive new meters? 79% 17% 4% Can utility companies be trusted to implement new pricing arrangements in a fair and honest way? 79% 16% 5% Will customers ever see any long term savings as a result of installing the new meters? 78% 17% 5% Will the new meters in fact be more accurate, or less accurate? 76% 20% 5% Can utility companies be trusted to safeguard the security of information and data about how customers use electricity? Will utility companies (and others) know more about customer electricity use than they need to know, or should know? Will customers need to spend much more time thinking about, and managing, their electricity use? 67% 25% 8% 51% 35% 14% 48% 40% 12% 31

32 3.3 But Few Are Confident That They Will Like the Answers They Get The Issue Will Be Resolved In a Way That Makes Me Completely Comfortable I Will Not Be Completely Comfortable I Will Probably Not Be at All Happy or Comfortable Will customers see higher costs in the near term in order to pay for expensive new meters? Can utility companies be trusted to implement new pricing arrangements in a fair and honest way? Will customers ever see any long term savings as a result of installing the new meters? 22% 38% 39% 23% 41% 36% 27% 42% 31% Will the new meters in fact be more accurate, or less accurate? 39% 42% 19% Can utility companies be trusted to safeguard the security of information and data about how customers use electricity? Will utility companies (and others) know more about customer electricity use than they need to know, or should know? Will customers need to spend much more time thinking about, and managing, their electricity use? 27% 42% 32% 27% 41% 32% 34% 46% 20% 32

33 3.3 Those Who See the Questions As Important Are NO More Likely Than All Consumers To Believe They Will Like the Answers 33

34 3.3 Customer Views on Questions The Pattern of Customer Differences On These Questions Varies From That Seen Previously Which Groups Attach More Importance to the Questions? Which Groups Are More Likely to Expect to Be Comfortable With The Answers They Will Get? Those in the Southeast & Texas Those in the Southeast Those who DO NOT support Smart Meter installations Those who support Smart Meter installations Those who think the economy will decline Those who think the economy will improve Tea Partiers Democrats Those with a lower opinion of their utility (especially for items having to do with trust, data security, and the like) Lower income / smaller homes Those with positive opinions of their utility 34

35 Outline Chapter 1 Introduction 2 Chapter 2 Executive Summary 5 Chapter 3 Key Findings: 13 1 Customer Reaction to Potential SG / SM Benefits Customer Reaction to the Potential Benefits of Dynamic Pricing Options Customer Reaction to Potential Questions / Concerns That Have Been Raised About SG / SM Investments Overall Customer Reaction to Smart Meter Installations: Who supports / opposes these installations, and why? Marketing implications 63 Chapter 4 Appendix 68 35

36 3.4 Familiarity with Smart Grid Activity As other research has shown, most customers do not claim familiarity with Smart Grid investments to date Claimed Familiarity with Smart Grid Activity 16% 12% 29% 43% Not at all familiar Only somewhat familiar Pretty familiar Very familiar 36

37 3.4 Installation of Smart Meters To-Date Although a quarter of customers do say that their meter has been changed over to a Smart Meter This figure is likely an overestimate, although it does increase to 42% among those who say they are pretty or very familiar with SmartGrid activity (indicating that the same people who believe that they are most educated on the subject are also the ones most likely to say they have a Smart Meter installed) Has a Smart Meter Been Installed at Your Home? 15% 59% 26% Yes No Not sure 37

38 3.4 Few Customers With Smart Meters Say Their Electricity Pricing Has Changed, And Most Do Not Say Their Total Costs Have Gone Up Did Your Electricity Pricing Plan Change When Your Smart Meter Was Installed? 8% No 10% Not sure 50% Yes, to a dynamic pricing option 32% Yes, to something else Did The Overall Price You Paid for Electricity Change? 8% No, stayed the same 18% Not sure 48% Yes, a little higher 11% Yes, a lot higher 15% Yes, lower 38

39 3.4 Not Surprisingly Then, Most Customers With Smart Meters Do Not Express Strong Opinions About Them Most customers say they don t care one way or another about the meters (64%) And in a follow-on open-ended question, most customers say that the reason for this response is that the meter has had no impact on them; that they have seen no difference. Which Best Describes Your Feelings About the New Meter? 9% 8% 19% I like it; I'm glad I have it I don't care one way or the other I don't particularly like it 64% I really don't like it and wish it hadn't been installed 39

40 3.4 Among Customers Without Smart Meters, Few Are Strongly Opposed to Them, But Few Are Swayed by Discussing Benefits Among those without Smart Meters currently, 45% think Smart Meter installations are a good idea, and this only goes up to 52% after hearing about all of the potential benefits In responses to an open-ended question, the most common reason for opposing Smart Meter installations had to do with unwanted government intrusion, Big Brother concerns, and similar issues The gain in support after hearing about benefits disappears almost completely (back to 46%) after hearing about related concerns 100% 80% 60% 40% 20% Don't really want a new meter installed Don't feel strongly, but rather leave old meter in place Don't care one way or the other Sounds like a good idea 0% First Time Asked Second: After Benefits Third: After Questions 40

41 3.4 Those With Smart Meters End Up Being Very Similar to Those Without Them In Terms of Their Views On Additional Installations While they do not see much benefit from their own Smart Meter installation, just over half (51%) of customers who say they have a Smart Meter now think that additional installations are a good idea, at least after hearing about the benefits that might be associated with such installations This compares to 52% among those without a Smart Meter currently As with other customers, support drops (to 45% compared to 46% for all customers) after hearing about related concerns 100% 80% 60% 40% 20% Don't really want a new meter installed Don't feel strongly, but rather leave old meter in place Don't care one way or the other Sounds like a good idea 0% Second: After Benefits Third: After Questions 41

42 3.4 Segmenting Customer Support for Smart Meter Installations Reviewing the responses to multiple questions, we can identify four different groups of customers, based on their support for Smart Meter, and SmartGrid, installations Segmenting Customer Support for Smart Meter Installations 19% Consistent Supporters 14% 43% Don't Care Doubtful 24% Ardent Opponents * Segment sizes rounded for simplicity 42

43 3.4 Understanding the Segments Consistent Supporters (45%) Think Smart Meter installations are a good idea both before and after they hear about both benefits and questions Why? Will help me monitor / manage / control my energy use (11%), will be more accurate (9%), will be more efficient overall (7%), will help me save money (7%) Don t Care (25%) Do not have strong opinions, and care little about either potential benefits or concerns Doubtful (15%) Do not have strong opinions, but lean toward the negative and consistently doubt that they will see benefits Ardent Opponents (20%) Consistently strongly opposed to Smart Meter Installations, and only expect negative outcomes Why? Big Brother/the government will be able to monitor / control my electricity use (21%), invasion of privacy (9%), don t trust the motives of the government/the company (6%) 43

44 3.4 What Underlies These Different Perspectives? This next section explores the underlying attitudes, beliefs, and demographics of the four segments by considering, in turn: Overall energy attitudes and product feature preferences, and how the segments differ on these attitudes and preferences Starting first with understanding the specific attitudes and feature preferences that were considered How the segments differentially view the benefits and questions associated with SmartGrid investments How the segments differ on their demographics How the segments differ in terms of political ideology 44

45 3.4 Which Opinions and Attitudes Did We Consider In Exploring Segment Differences? Analysis of a set of attitude statements revealed that the items fell into three groups: The Green Perspective items are those consistently representing a traditional pro-environmental perspective The Well Informed items include claims to being well informed about both societal and household energy issues The Cost Over Green items all focus on the importance of cost as the household s primary energy use consideration Green Perspective The long-term threat from global warming and climate change is real, and potentially catastrophic On a daily basis, you take actions to be as green as possible in the way your household uses resources You are willing to do things that cost more if they will have a beneficial impact on the environment You are very concerned about the environmental effects of generating and using electricity Being Well Informed You are very well informed about local and regional news and events You regularly review your home s energy usage, and constantly look for ways to save on energy costs Your household already does a really good job of using energy wisely You are very well informed about issues having to do with energy efficiency and changes that may affect the options you have for using energy differently Cost Over Green Helping the environment is fine, but you worry much more just about saving money on energy costs You are willing to be as green as you can, but not if it costs more It is very important for you to find ways to control your energy costs 45

46 3.4 Which Product Feature Preferences Did We Consider In Exploring Segment Differences? Analysis of the statements regarding the features that customers most value when they select new household appliances revealed that the items sort into two groups: The Energy Efficiency Focus items are those having to do with the product s operating efficiency The Feature Focus items have to do with ensuring that the product has what I want Energy Efficiency Focus Core Feature Focus Purchase discounts or tax credits that might be offered for purchasing energy Whether or not the product has the features you want efficient devices Cost savings you might get from reduced electricity usage Whether or not the product has the level of quality you are looking for The energy efficiency of the product as a whole The extent to which the product is designed and built to be as green as possible 46

47 3.4 How Attitudes and Feature Preferences Link to Smart Meter Support Consistent Supporters score consistently higher on the green attitudes and preferences, but are also reasonably high on the Cost Over Green factor, suggesting that cost still factors into their considerations Ardent Opponents, on the other hand, are very low on the green factors, but relatively high on both Being Well Informed and Cost Over Green, and particularly high on Core Feature Focus The Don t Care segment, not surprisingly, rates low on Being Well Informed The Doubtful segment scores high on having a Core Feature Focus, and is not particularly low on any factor (% High on Each Factor) Consistent Supporters Don t Care Doubtful Ardent Opponents Green Perspective 50% 24% 26% 14% Being Well Informed 35% 23% 32% 39% Cost Over Green 36% 28% 36% 38% Energy Efficiency Focus 42% 22% 27% 21% Core Feature Focus 49% 45% 53% 65% * % represents the proportion of each group that scores in the top third for each factor 47

48 3.4 How The Segments Differ In Rating SmartGrid Enabled Benefits Consistent Supporters consistently rate the benefits as more important, while Ardent Opponents rate them less so It is interesting to note that, on these issues, the Doubtful segment is more like the Don t Cares, rather than like the Ardent Opponents (% rating each benefit as Important ) Consistent Supporters Don t Care Doubtful Ardent Opponents Long term reductions in electricity costs and prices 87% 66% 72% 60% More accurate meter readings and bills 84% 59% 67% 55% Having fewer and shorter power outages 75% 59% 66% 47% Automatic notification of power outages 66% 44% 44% 31% Detailed info about household energy use 66% 33% 36% 19% Being able to track energy use 64% 28% 28% 11% Access to real-time information about energy use 61% 28% 30% 18% Make it easier to sell power back to the utility 49% 30% 31% 21% Easier / faster customer service 50% 31% 29% 20% Info about status of renewable generation 44% 20% 13% 12% Ensuring adequate electricity to recharge EVs 39% 23% 18% 6% 48

49 3.4 How The Segments Differ In Rating The Likelihood That They Will Experience SmartGrid Enabled Benefits Consistent Supporters are, across the board, more likely than the other segments to see the benefits as likely to occur (though it is worth mentioning that (for even this segment no more than half see most of the benefits as likely) The Don t Care group is more like Doubtfuls than they are like Consistent Supporters (% rating each benefit as Likely to Occur ) Consistent Supporters Don t Care Doubtful Ardent Opponents Long term reductions in electricity costs and prices 47% 15% 13% 4% More accurate meter readings and bills 64% 34% 25% 14% Having fewer and shorter power outages 29% 10% 8% 4% AutomaDc nodficadon of power outages 50% 27% 22% 8% Detailed info about household energy use 54% 25% 20% 13% Being able to track energy use 62% 26% 27% 17% Access to real- Dme informadon about energy use 61% 30% 23% 11% Make it easier to sell power back to the udlity 38% 14% 9% 5% Easier / faster customer service 49% 21% 17% 13% Info about status of renewable generadon 34% 19% 10% 10% Ensuring adequate electricity to recharge EVs 29% 12% 12% 6% 49

50 3.4 How The Segments Differ In Evaluating the SmartGrid Related Questions Consistent Supporters are, across the board, more likely than the other segments to see the benefits as likely to occur (though it is worth mentioning that (for even this segment no more than half see most of the benefits as likely) The Don t Care group is more like Doubtfuls than they are like Consistent Supporters (% rating each question as Very Important ) Consistent Supporters Don t Care Doubtful Ardent Opponents Will customers see higher costs in the near term in order to pay for expensive new meters? 80% 68% 85% 88% Can utility companies be trusted to implement new pricing arrangements in a fair and honest way? 82% 64% 82% 87% Will customers ever see any long term savings as a result of installing the new meters? 85% 60% 81% 81% Will the new meters in fact be more accurate, or less accurate? 84% 60% 74% 77% Can utility companies be trusted to safeguard the security of information and data about how customers use electricity? 65% 52% 76% 85% Will utility companies (and others) know more about customer electricity use than they need to know, or should know? 43% 36% 62% 81% Will customers need to spend much more time thinking about, and managing, their electricity use? 48% 29% 58% 64% 50

51 3.4 How The Segments Differ In Rating The Likelihood That They Will Be Comfortable With The Way That SmartGrid Questions Are Resolved Consistent Supporters are most likely to say they expect to be comfortable with the way the issues are resolved, but, fewer than half say this for most of the items Expected comfort levels are very low among the other segments, especially among Ardent Opponents, where it is nearly non-existent (% saying they will be Completely Comfortable with the way that each issue is ultimately resolved) Consistent Supporters Don t Care Doubtful Ardent Opponents Will customers see higher costs in the near term in order to pay for expensive new meters? 41% 12% 4% 5% Can utility companies be trusted to implement new pricing arrangements in a fair and honest way? 41% 11% 6% 6% Will customers ever see any long term savings as a result of installing the new meters? 49% 15% 5% 4% Will the new meters in fact be more accurate, or less accurate? 65% 24% 18% 8% Can utility companies be trusted to safeguard the security of information and data about how customers use electricity? 45% 17% 6% 7% Will utility companies (and others) know more about customer electricity use than they need to know, or should know? 47% 17% 8% 5% Will customers need to spend much more time thinking about, and managing, their electricity use? 56% 26% 11% 6% 51

52 3.4 Summary: Segment Perspectives on Benefits & Concerns Consistent Supporters Majorities say that the benefits would be important to them; these are substantially higher rates than the other segments Only around half, however, believe that realizing these benefits is likely these are higher rates than the other segments, but still no more than half, except for such things as more accurate meters, being able to track energy use, and having access to real-time information No more likely to view the questions as important relative to other segments, and less likely than some others to view the data-related issues as important More likely than other segments (but still no more than half in most cases) to say they expect to be comfortable with the resolution of the questions Don t Care As the name suggests, they are less likely than most to view the benefits OR the concerns as important Typically do not see the benefits as likely, or to believe they will be comfortable with the resolution of questions, but not as strongly so as Ardent Opponents 52

53 3.4 Summary: Segment Perspectives on Benefits & Concerns Ardent Opponents Least likely to say the benefits would be important and least likely to say they are likely to occur As, or more, likely than any other group to say the concerns are very important, but least likely (fewer than 10% on most items) to believe they will be comfortable with the resolution of those questions Doubtful Moderate in their assessment of the importance of the potential benefits, but lower than average in their expectation that they will experience those benefits High in their ratings of the importance of the questions, but very unlikely to believe that they will be comfortable with the way those questions are resolved 53

54 3.4 Key Takeaways: Segment Perspectives on Benefits & Concerns Consistent Supporters Don t Care Doubtful Ardent Opponents Believe in the value of potential SG-enabled benefits, but not convinced they will ever see them Interested in the questions, and also not convinced they will be happy with the way things work out Do not attach great importance to the benefits or the questions, and do not expect much in the way of positive outcomes See some value in the benefits, but do not see those benefits as likely to occur See the questions as very important, but are very doubtful that the questions will be resolved in a way that makes them comfortable See little value in the benefits and do not expect them to occur Believe the questions are very important and have no belief that they will be resolved in a way that makes them comfortable 54

55 3.4 There Are Relatively Few Differences Between The Segments In Terms Of Their Demographic Profile Consistent Supporters are somewhat less likely to live in single family homes, be white, and be married than the other segments Ardent Opponents are slightly older But one of the major takeaways here is how little difference there is across the segments on such characteristics as income and education Consistent Supporters Don t Care Doubtful Ardent Opponents % single family home 66% 77% 78% 80% % white 76% 84% 83% 84% % married 56% 64% 69% 70% Ag: Less than 35 22% 23% 24% 9% Age: % 40% 44% 52% Education: HS grad or less 23% 22% 27% 26% Eduecation: 4 yr college or more 39% 40% 37% 42% Income: Less than $30,000 19% 16% 15% 20% Income: $100, % 21% 13% 23% 55

56 3.4 There Are More Fundamental Differences Between The Segments In Terms Of Their Political Orientation Consistent Supporters appear to be largely mainstream Democrats, who are optimistic about the economy Ardent Opponents are very conservative, largely Tea Partiers, who watch Fox News, and tend to support very conservative candidates Consistent Supporters Don t Care Doubtful Ardent Opponents % Tea Party 19% 30% 41% 59% % Democrat 47% 35% 32% 17% % Republican 25% 28% 22% 21% % say economy will improve this year 52% 34% 26% 17% % say support very conservative candidates 15% 18% 24% 41% % watch Fox News daily 33% 39% 54% 70% % watch MSNBC daily 26% 13% 8% 12% 56

57 3.4 There Are Also Some Differences in The Way the Segments View Their Local Utility Consistent Supporters are slightly more positive in their opinions of their local utility than are other segments Ardent Opponents are slightly less positive on these issues than the other segments, though particularly so only for being a good community citizen (% rating their local electric utility supplier 8-10 on 10-point scale) Consistent Supporters Don t Care Doubtful Ardent Opponents Overall performance 56% 48% 57% 43% Credible and believable 50% 40% 39% 35% Trustworthy 49% 40% 39% 31% Good community citizen 47% 40% 41% 28% 57

58 3.4 Overall Segment View: Consistent Supporters Democrats who have strongly pro-environmental attitudes, who believe in energy efficiency, and who are also somewhat more likely to be non-white, live in otherthan-single-family homes, be not married, and have a slightly more positive view of their utility They view the potential benefits of SmartGrid / Smart Meter investments as important, but they are not convinced that those benefits will be manifested They view the SG questions as important (though less so for some questions than Ardent Opponents), and are not as worried about how those questions will be resolved as some other segments, but they are still not fully reassured that things will work out as they would want They support SmartGrid investments, then, though with less than complete enthusiasm; it s worth doing, but it may or may not pay off in the long run 58

59 3.4 Overall Segment View: Don t Care This group does not have strong opinions on Smart Meter investments (or really any opinions on the matter), they do not consider themselves very well informed, and they do not have strong opinions on environmental issues (or, alternatively, on being cost focused) Potential SG benefits would be worth having (in many cases), but they think it is highly unlikely that they will occur The SG-related questions are less important than for the others segments, but they also do not think they will be happy with the outcome An average demographic and political profile, and a slightly lower than average view of their local electric utility This group is not engaged with these issues nor do they want to be -- their lack of opinion is not a result of the fact that they haven t been educated on these issues; they would likely resist any such attempt; they re not interested 59

60 3.4 Overall Segment View: Doubtful This group of customers does not support SG / SM investments, though no where near as adamantly as do Ardent Opponents They are not anti-green, but certainly do not rate environmental / energy efficiency considerations highly, and they have slightly lower ratings of their local utility They see some potential value in the benefits, but do not see those benefits as likely to occur They also see the questions as very important, but are very doubtful that the questions will be resolved in a way that makes them comfortable Their demographic and political profile is largely average, although the largest proportion (41%) identify with the Tea Party, although a third describe themselves as Democrats This group is potentially in play, in the sense that their opinions could change -- they can see some positives from SG investments, although are very doubtful if the outcome of those investments will work in their favor; given their political perspectives, it is likely that they become more similar to Ardent Opponents over time than anything else 60

61 3.4 Overall Segment View: Ardent Opponents Tea Party identifiers who strongly oppose SmartGrid / Smart Meter investments because they see them as unwanted government intrusion Slightly older, white, married customers who live in single family homes, watch Fox News, do not expect the economy to improve this year, with a somewhat less positive view of their local utility, and who reject environmental concerns (they do not believe in global warming, for example Unimpressed with the tested SG benefits, but also unlikely to think the benefits will occur Very concerned with the SG questions tested, including those having to do with the security of usage data, and very confident that they will NOT be happy with how these questions will be resolved This group is very opposed to SmartGrid and Smart Meter installations and is unlikely to be swayed from their perspective since it is not based on a lack of information (in fact they consider themselves to be well informed), but is part of their core political and world view and to be clear, it is not just that they do not support the SG, they strongly oppose it 61

62 Outline Chapter 1 Introduction 2 Chapter 2 Executive Summary 5 Chapter 3 Key Findings: 13 1 Customer Reaction to Potential SG / SM Benefits Customer Reaction to the Potential Benefits of Dynamic Pricing Options Customer Reaction to Potential Questions / Concerns That Have Been Raised About SG / SM Investments Overall Customer Reaction to Smart Meter Installations: Who supports / opposes these installations, and why? Marketing implications 63 Chapter 4 Appendix 68 62

63 3.5 Implications for Marketing Communications The challenge in designing marketing communications that will encourage customer support for SmartGrid investments will be a very difficult one On the face of it, promoting more positive SG-related opinions within any of the four segments will be complicated Consistent Supporters are obviously positively disposed toward supporting SmartGrid investments, but their questions about whether or not they will ever see promised benefits will be challenging to answer conclusively The Don t Care segment is just that and not likely to change, since this is a basic feature of their approach to this category of activity, and not just a lack of information that they will want to engage in changing The Doubtful segment is probably more likely to become more negative toward SmartGrid investments, than to become more positive; their doubts about both the likely value of SmartGrid and Smart Meter investments and the potential downsides from those investments lead them to worry a good deal about the advisability of such investments Ardent Opponents are very unlikely to change their views since those views are part of a broader political perspective that appears to be part of their core belief system 63

64 3.5 Implications for Marketing Communications In order to be effective, marketing communications would need to address customer concerns about: How and when they will see the promised benefits How they can be sure that they will not experience potential negatives from Smart Meter investments The issue, then is not simply in communicating potential benefits to customers they are willing to assume that at least some of those benefits would be good to have the key question is whether or not they will ever actually experience those benefits (despite assurances) and whether or not their other concerns will be adequately addressed Giving customers good reasons to believe that they can be confident about ultimately receiving promised benefits and avoiding potential problems will not be a simple communications task And as a result, the potential trends in customer support for SmartGrid / Smart Meter investments are asymmetrical increases in support are less likely than are increases in opposition 64

65 3.5 Implications for Marketing Communications Further challenges to effective communications lie in questions about the best source of any messaging Certainly, the role of government (in any form) will need to be minimal in any communications, in particular as this might have to do with access to customer data or driving the definition of customer pricing plans that limit electricity usage But the utility is also not a fully trusted partner in this mix (especially among those already negatively disposed toward SmartGrid investments) Given the critical issue of confidence among customers in the likelihood that benefits will actually be delivered to them; consumer groups might be able to contribute meaningfully as watchdogs, providing assurance that consumer concerns are addressed appropriately, and ensuring the delivery of consumer benefits is being given high priority Consumer technology companies may be best served by focusing on the role their products can offer in ensuring that customers actually realize the benefits enabled by SmartGrid investments 65

66 David C. Lineweber, Ph.D. Managing Partner 601 SW Oak Street Portland, OR , ext. 802 definitiveinsights.yougov.com 6

67 Outline Chapter 1 Introduction 2 Chapter 2 Executive Summary 5 Chapter 3 Key Findings: 13 1 Customer Reaction to Potential SG / SM Benefits Customer Reaction to the Potential Benefits of Dynamic Pricing Options Customer Reaction to Potential Questions / Concerns That Have Been Raised About SG / SM Investments Overall Customer Reaction to Smart Meter Installations: Who supports / opposes these installations, and why? Marketing implications 63 Chapter 4 Appendix 68 67

68 4 Appendix: Survey Methodology Survey respondents were solicited from a commercial online research panel and were asked to complete a 20 minute online survey designed by Definitive Insights Potential respondents were screened to ensure they qualified for the survey (directly billed electricity customers, primary or shared energy decision maker, qualifying employment categories, qualifying age categories) A total of just over 1,100 survey responses were collected, with approximately equal samples captured in 10 US regions: New England (Maine, Vermont, New Hampshire, Connecticut, Massachusetts, and Rhode Island); the Mid-Atlantic (New York, New Jersey, Pennsylvania, Maryland, and Delaware); the Midwest (Ohio, Indiana, Illinois, Wisconsin, Minnesota, Iowa, and Michigan); the Southeast (Virginia, West Virginia, North Carolina, South Carolina, Georgia, Florida, Mississippi, Alabama, Louisiana, Kentucky, Tennessee, and Arkansas); Texas; the Great Plains (Nebraska, Kansas, Missouri, Oklahoma, South Dakota, North Dakota, and Wyoming); the Southwest (Arizona, New Mexico, Utah, and Nevada); Northern California; Southern California; the Northwest (Oregon, Washington, Idaho, Montana, and Colorado) Regional samples were imposed in order to make it possible to analyze the survey results within each of these 10 regions Survey results were weighted back to ensure that total survey results accurately represented the 48 contiguous states by region, as well as by age and gender. 68

69 4 Appendix: Respondent Overview Gender Marital Status 22% 50% 50% 16% 62% Men Women Married Single Other 69

70 4 Appendix: Respondent Overview Own / Rent Home Age 23% 13% 4% 16% 31% 10% 77% 26% Own Rent

71 4 Appendix: Respondent Overview Race Education 5% 8% 7% 16% 24% 24% 80% 36% White Black Hispanic Other High school grad or less Some / 2 year college 4 year college grad More than 4 years of college 71

72 4 Appendix: Respondent Overview Ratings of Local Electric Utility Provider (Top 3 box scores (8-10)) 72