Marketing the Smart Meter: Where PG&E Went Wrong

This post is part of a blogging series by marketing students at the Presidio Graduate School’s MBA program. You can follow along here.

By: Stacey Waldspurger Would you like some electromagnetic pollution attached to your house against your will? Or would you prefer real time monitoring that provides knowledge and insight into your energy consumption rates, allowing you to make choices about when to run appliances and when to tone your usage down depending on the current rate?

While pleasing everyone is a known impossibility, the PG&E Smart Meter launch, which began in late 2009, has certainly ruffled more than a few feathers as they have worked to progress our energy system towards an intelligent power future.

Things you may have heard about Smart Meters: they create higher rates for users; they may cause cancer; they violate a consumer’s privacy; they are only in place to save PG&E money by not having a human read meters monthly; and they allow PG&E to manipulate the rates we are charged.

Things PG&E would rather you think about: a smart meter can measure your household energy use in near real time and it allows for dynamic pricing based on current consumption. With this information, customers can choose when to schedule energy consumptive tasks like running the dishwasher or the dryer. This article by Good discusses how dynamic pricing is a great but not very well understood benefit.

Some unfortunate coincidences: PG&E’s Smart Meter installations coincided with both an extremely warm summer and a tiered rate hike.  So as Smart Meter’s were installed to communities such as the now somewhat famous Bakersfield, CA, rates were on their way up without explanation, so the Smart Meter seemed an obvious culprit.

Smart Meters also are the vehicle to future connections to an eventual smart grid, which will replace our current archaic “dumb grid”. The smart grid will be a much-improved method of moving energy, which will be able to handle renewable energy and electric vehicles. It will also allow individuals who produce their own power to sell it back into the grid. This is the support system for that dream of powering your house and car with solar panels.

While beneficial to the future of energy use, the smart meter requires a change in behavior. Those of us somewhat obsessed with consumer behavior know that if there is one thing more difficult for most than walking on water, it is accepting behavior change recommended by an external agency.

As Kathrine Ling of the New York Times mentions in Greenwire, if a customer wasn’t aware of how to take advantage of changes in energy rates to begin with, a smart meter isn’t going to provide the needed information.  It will, however make it easier for those of use who are already following energy rate shifts.

In a third party analysis by Structure, PG&E was informed that they had poor communications with the public around the launch. This much is clear. There was very little information available and it seems that an assumption was made that we would all embrace this advanced technology without question.

PG&E could have leveraged this new meter launch as an opportunity to go to the public with a powerful conservation story and creative marketing to instill excitement about the future possibilities that this Smart Meter technology allows.

What can we learn from this campaign’s lack of public out-reach?  Relationships are based on trust, and when it comes to engaging the public in the launch a something new, like the Smart Meter, it is essential to solicit consumer trust for a successful launch. The consumer is PG&E’s partner in this change, and need to be treated as such. Through PG&E’s mismanaged marketing efforts, the importance of creating succinct and impactful – yet positive messages is made clear. This needs to come before sticking an unfamiliar technology on to private homes.

As leaders in sustainability, we will ask a lot from the public as we work to make change in status quo behavior.  The public can be our greatest ally, or our worst enemy depending on the efforts made to establish public buy-in and provide clear education and information on product benefits.

One response

  1. You make several very good points all of which must be terribly embarassing to the executives at PG&E. This lost opportunity is additional evidence that companies without significant competition always do a crappy job of managing their businesses.

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