1. MD-DC: Consumer Expectations for the Home of the Future
Rick Counihan Head of Energy Regulatory Affairs

2. Our conversation today
Building the Connected Home
Case Study - Insurance
Beyond the Meter Matters!
But, that's not all to Nest.
We want to bring the conscious home to life.
And we can't do that alone.
Nest isn’t going to build everything in the home.
We need to partner with the best in each category.

3. Building the Connected Home

4. Our homes don’t work as well as they should
And one big problem we both deal with is that our homes don’t work as well as they should.
We’ve got these amazing computers in our pockets, but a lot of the devices in our homes look and function the same way they did 30 years ago. And these devices are too important to ignore.
Too important to ignore

5. IoT appears to have hit a tipping point
Whatever you call it, analysts are predicting that the number of connected devices in the home will skyrocket in the next decade - growing faster than smartphones, tablets, and computers.

6. Two visions for the connected home
Platform First
1. Buy a hub (or an iPhone)
2. Buy a “kit” of products to connect to that hub
3. Tell those products what to do and when to do it
Product First
1. Buy a product you love
2. Use that product. Watch it automatically solve problems
3. Buy other products that work with that product

7. Not all customer experiences are created equal
You do all the work
Turn it on and off with your phone
Products think for themselves
Happens automatically, behind the scenes

8. Case Study:
How an Insurance Provider is Leveraging the Connected Home for Customer and Business Value

9. Insurance providers: a customer engagement challenge
So fire is is really frightening
(click)
Each year fire is responsible for incredible amounts of damage
Fire of course affect not just homes but also businesses
And sadly smoke and fire cause injuries and loss of life

10. Americans live in homes without smoke alarms
And yet, almost 5 million Americans live in homes without any smoke alarms. In Europe, the numbers are even higher. Until last year, 98% of homes in my home country of France did not have any smoke alarms
Americans live in homes without smoke alarms

11. 60% 60% of fire deaths in the US
happen in homes without working smoke alarms

12. $49 $103 89M 26M $4.3B $2.7B 77% 23% Value of a Working Smoke Detector
Annualized damage cost per home
$49
$103
US homes**
89M
26M
$4.3B
$2.7B
Fire-related property damage*
77%
23%
% US homes*
Working
Not Working
*Marty Ahrens. Smoke Alarms in U.S. Home Fires, National Fire Protection Association Fire Analysis and Research Division, 2014.
**2010 US Census - 115,000 US Households

13. The risk matters … to customers and providers
Homes and businesses
Injuries and loss of life
So fire is is really frightening
(click)
Each year fire is responsible for incredible amounts of damage
Fire of course affect not just homes but also businesses
And sadly smoke and fire cause injuries and loss of life

14. Insurers should be aware if a home is protected with working smoke detectors (or not)…
And they would like to have more positive customer interactions (customer satisfaction is critical to business longevity).

17. Happier, informed customers - and insurance providers
Protect
At Nest we create a monthly report for each Protect customer with their safety information.
Nest Safety Rewards is for customers who want to send their safety report to their insurance company as proof of how safe they are.
Batteries
Sensors

18. Consider: are some of your challenges similar?

19. Beyond the Meter Matters!

20. Today Utilities are considering a range of strategies
As a home services company
Scope of connected home limited only by:
business aspirations
customer interest
Scope of connected home limited by:
regulations
fit with capabilities
alignment with current strategy
degree of brand flexibility
As an Energy Company

21. Why should utilities care now?
Because…
Other service providers are acting - and playing in the energy realm

25. Why should utilities do now?
Other service providers are acting - and playing in the energy realm
Get started with connected device programs - and think big!
“Beyond the meter” devices deliver customer engagement value (to customers and utilities)
Develop a program to engage your customer vis-a-vis something that delivers benefit to BOTH you and them!
These devices offer option value for the future: new services and revenue
Lay the foundation… and develop your strategy

26. Getting started with connected device programs
Wifi/Smart thermostat programs available in 2016
They’re already here!

27. Develop an offering to engage customers…
Energy Efficiency
Demand Response
Dynamic Pricing
Dozen+
of programs launched(ing)
~1kW
reduction/device*
Happy customers*
Algorithms to boost savings – and satisfaction
~4% additional HVAC runtime savings*
Georgia Power using as enabling tech.
TOU w/ California IOUs
launching in 2017
And this is just the beginning…
*Nest results

28. Crystal Ball

29. Customer Expectations in 5 to 10 Years
Customers are not all alike. Segmentation matters. 1
That said, more & more will expect an “instant” experience: no appt. for turn-on, rapid outage recovery, bill alerts & pay by phone 2
Many customers will welcome choices: providers, price plans, TOU, EV charging, etc. 3
Customers will still not want to spend precious personal time on utilities. Will want tools and companies to do it for them. 4

30. Thank you!