Rolling out Default Time Variable Rates without the PR Nightmare

By Crystal Leaver on

This post was originally published on EnergySavvy’s website. EnergySavvy is now Uplight.

As utilities struggle with a host of new challenges around aligning supply with demand, one of the most promising tools to emerge is the use of default Time Variable Rates (TVR, or Demand Rates, or simply Time of Use). These new rate plans can effectively motivate customers to look at ways to time-shift or reduce overall energy usage, usually with the ultimate goal of lowering their energy bill. However, this switch can be be tumultuous for utilities where unlike an opt-in program, most customers are automatically enrolled. While this approach results in a higher enrollment rate than opt-in programs, few utilities have successfully rolled out a default TVR plan.

But managing customer perceptions is critical for a successful TVR roll-out, especially since rate plan shifts can be incredibly confusing to customers and have high stakes for the utility. Bad experiences can travel fast, risking bad press and word of mouth, and ultimately, churn. Introducing a new rate structure to already engaged early adopters is one thing, but building the trust needed for a broad change and educating the average residential utility customer is a much bigger challenge.

While educating customers on the new rate structure is critical, utilities also need to continually engage customers–no matter where they are in their stage of the rate transition journey. For example, if a customer has a high bill, utilities need to proactively provide tools to help them address the issue.

Rate plan roll-outs gone poorly can lead to dissatisfied customers (which could impact a utility’s return on equity) and expensive investments in storage in an attempt to reduce the duck curve. For example, a 13,270 MWh project in California is projected to cost between $5-20 billion–if a project of this scale was even currently possible.

Fortunately, as long as utilities consider and address a few key issues, it is possible to successfully roll out a default TVR plan. EnergySavvy has just written a new ebook detailing both the pitfalls and strategies that must be considered when utilities are looking to deploy default TVR. Check out the ebook for more detail, but some of these important considerations include:

  • Creating a 360-view of customers. Bring together data from multiple systems in one place, accessible across departments.
  • Building customer trust through personalization. Tailor messages to each customers, providing relevant rate plan and other recommendations that customers are more likely to act on.
  • Providing a consistent message across all touchpoints. Sync each channel including the call center, email, customer portal, website, and direct mail to avoid customer confusion.
  • Engaging customers beyond the roll-out. Staying in touch after enrollment minimizes churn, improves satisfaction, and can better deliver on peak reduction.
  • Continually assessing trends and customer impact. Determine what are most effective outreach and offerings, and which aren’t working.

Because so many residential customers are impacted, the potential for poor customer satisfaction is high, and the desired impact to the overall grid is mission-critical for many utilities, implementing a default TVR program has tremendously high stakes. But by harnessing data and analytics to create one view of the customer, personalizing customer communications, providing a consistent experience across channels, and continually optimizing outreach, a utility can have a smooth transition to this important new strategy for optimal energy management.

Download the ebook to learn more about how to use the five best practices to roll-out a TVR program to your customers.


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