1. Smart Grid Consumer Perspectives

2. Top Ten Things Consumers Want from the Grid Data Guidance Reliability Control Comfort Convenience – and ease of communication with utilities Cost Savings – return on investment Environmental Preservation National Preparedness Thoughtful Roll Out

3. Findings from Focus Groups on Grid Smart Grid Awareness is low Consumers have a favorable impression of Smart Grid Source: Consumer Voices: Summary of Key Findings, May 2012. Smart Grid Consumer Collaborative, http://smartgridcc.org/wp- content/uploads/2012/05/SGCC-Consumer-Voices-Summary.pdf? Accessed 25 July 2012 http://smartgridcc.org/wp- content/uploads/2012/05/SGCC-Consumer-Voices-Summary.pdf?

4. Smart Grid Awareness is Low Those who had at least heard the term associated smart grid with the development of new technologies to improve reliability, efficiency, billing accuracy, and energy management. Those who had not heard the term were asked to speculate on what a “smart” grid might mean. Their assumptions focused on improved efficiency, providing more information to consumers, environmental enhancements, billing accuracy, and reliability. No one brought up concerns about privacy, health issues, higher bills, etc.

5. Consumers have a Favorable Impression of Smart Grid With a little prompting on smart grid, participants in focus groups generally described their overall feelings as favorable or very favorable. Some said they needed more information before expressing an opinion. A few raised concerns about the costs of the improvements. Based on the information provided, key value propositions varied from person to person and segment to segment. No one brought up concerns about privacy, health issues, higher bills, etc.

6. Willingness to Pay for Benefits Varies Most consumers feel the benefits are significant but are not willing to pay more Some consumers were willing to pay $3-4/month* for benefits of: – Improved reliability and restoration – Increased access to renewable energy – Availability of better usage information and new pricing options – Reduced greenhouse gas emissions and reduced need for new power plants * The methodology asked if the benefit was not important, important at no cost, willing to pay $3-4 per month

7. Negative comments less impactful than positive: Most compelling arguments are: Smart grid will help prevent blackouts and restore power faster if they do occur Existing components in T&D are decades old and wearing out Power demands are continuing to grow. Adding grid components will allow demand to be met Adding distributed grid will allow renewable sources to be integrated Smart meters will allow consumers to see energy consumption and make better choices A smarter grid is necessary to maintain competitive advantage

8. Negative comments less impactful than positive: Less compelling arguments are: Grid improvements are necessary to meet demands from electric vehicles Smart grid projects will create tens of thousands of jobs and bring $12 billion to economy in next two years Improvements can provide information instantly for dramatic increases in efficiency

9. Smart Meter-Enabled Programs Appeal to Most Consumers Time of Use Pricing (TOU)and Peak Time Rebates (PTR) appealed to over half of participants Interest in TOU and PTR is driven both by savings and altruistic motives such as helping the environment or preventing outages Visibility into pricing is important for TOU and PTR so consumers can make better choices Those preferring PTR like the idea of responding occasionally for a higher level of reward

10. Smart Meter-Enabled Programs Appeal to Most Consumers Those who didn’t want to participate in TOU or PTR cited lifestyle or lack or interest in managing consumption None expressed concern about those who may be negatively impacted by TOU or PTR Most say they are participating in normal energy saving behaviors Many have programmable thermostats but few use them

11. What Drives Consumer Adoption Technology Adoption is governed by: 1.Perceived advantage 2.Risk factors 3.Ease of use 4.Timing of benefits 5.Observability 6.Trialability 7.Price 8.Fit with practices

12. Challenges with Consumer Adoption Perceived Advantage In the focus groups most were not willing to pay more, some would pay $3-4/month There is an expectation that there would be feedback on usage allow them to save money This raises the questions on to pay the system including HAN components It is difficult to gain support for investment in systems which work rather well now. Utilities have done very well in managing the systems so any problems are somewhat transparent

13. Challenges for Consumer Adoption Ease of Use Most consumers in the focus groups have programmable thermostats, yet many do not use them This represents an inconsistency with consumers saying the want to save money, but they will not invest time to program the thermostat

14. Challenges for Consumer Adoption Timing of Benefits Many of the benefits to investment of the grid accrue in the future It’s difficult to get consumers to invest in problems they are not currently experiencing – When gas prices rise, fuel efficiency becomes a problem. We know we need to reduce our consumption of fossil fuels, yet investment to move this direction has been slow

15. Challenges for Consumer Adoption Observability Benefits to the smart grid are largely transparent – If my power went out every week, I would happily pay to fix it

16. Challenges for Consumer Adoption Trialability The ability to alter consumers behavior to reduce energy consumption is something we can’t try before we invest in Grid This represents a smaller issue and can probably be overcome through communication and demonstrations

17. Challenges for Consumer Adoption Price Regulators are pushing utilities to show consumer benefit for investments passed through to consumer Meta analysis of pilot studies show that average savings is 3.8%. Simple awareness of consumption may alter some lifestyle choices – we might use the delay setting on the washer The HAN will probably emerge over a decade or more – Only if the premium for Grid enabled is small – Marginal benefit (payback) of enabling appliance is low – Appliances last 7-14 years

18. Challenges for Consumer Adoption Fit with Current Practices On a daily basis we do not think about our power consumption so we are not used to managing the process It may take a while before people do their laundry overnight – The capability to do this already exists