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A Conversation About the Challenges and Opportunities of TOU Rates

By Gaby Margas on

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Last week, Uplight hosted utility leaders from around the US in a virtual discussion about time-of-use (TOU) rates, recruiting customers, and how customers can be successful on their new TOU rate. Scott Engstrom, VP of Corporate Strategy and Business Development at GridX as well as Alex Lopez, Sr. Product Marketing Manager and Angela Amos, Director of Market Development also joined the discussion.

While all were at different stages in their rates deployment journey, they agreed that TOU rates are important for creating customer choice–while enabling both behavioral energy efficiency and device-enabled load shifting. When empowered with rate options, customers have a higher satisfaction in, and are more likely to enroll and stay in rate programs. 

According to Alex Lopez, “At Uplight, we believe that a successful TOU rollout is as much about engaging with customers as it is about finding the optimal TOU rate design.”  Getting a customer onto a TOU rate is only the first step. Alex talked about the three critical pieces of the TOU rate rollout puzzle: building awareness around rate programs, inspiring confidence that customers can save on a new rate, and motivating customers to take action by enrolling and beyond enrollment through onboarding and ongoing coaching. 

According to this particular group of utility leaders, 65% of them offered an opt-in residential TOU rate, while 17% offered an opt-out/default rate program. Only 50% of those members actively market their TOU program. 

And 60% of the group noted that customer participation is a challenge. This aligns with data from the Energy Information Administration: only 7% of residential customers are enrolled in time varying rates (TVR) despite 64% of residential customers having access to these rates.

To combat rates inertia and boost enrollment, working group participants have used multichannel marketing, bill comparison tools, and AMI self-service data. To increase retention, one utility sends nurture emails in the six weeks following the switch to help customers understand changes in their bill, whether increases or decreases.

Some utilities also use enabling technology such as smart thermostats to help customers optimize their energy usage with their rate so that customers don’t even have to think about peak and non-peak usage. 

An intentional customer engagement strategy that evolves to meet customer expectations at each stage of this TOU journey will allow customers to succeed in managing their bills under TOU, improve satisfaction with the TOU rate, and reduce customer churn. Contact Uplight to learn more about our Rates Adoption and Customer Experience solutions

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