Sustaining Smart Grid Value: Tapping into Customer Energy Management (CEM) Benefits

Yesterday, I attended the 2014 Clean Energy Challenge, an annual clean energy competition hosted by the Clean Energy Trust. The audience and judges were treated to 15 student and start-up Midwest cleantech companies that were vying for $500,000 in prizes.

Not surprising, two of the companies centered around utility customer usage feedback: MeterHero is a Milwaukee-based early stage start-up and MeterGenius is Chicago-based company run by a group of Northwestern University students and faculty. In the end, Meter Genius ended up taking home the $25,000 McCaffery Interests Prize for Building Efficiency.

Customer energy usage feedback is a vital building-block in achieving the Customer Energy Management (CEM) benefits of a smart grid business case.  Together, CEM benefits can account for 25% or more of the total smart grid business case investment decision, AND, are a vital element in gaining public support at both the regulated and unregulated utility levels.

From a business case perspective, the hardware deployment of Advanced Metering Infrastructure (or AMI) and corresponding software systems integration is a significant milestone for the utilities. And rightfully so – functional AMI allows utilities to achieve a significant share of their smart grid savings as a result of operational benefits (such as reduced meter-reading costs) and distribution efficiency and demand reduction benefits (such as reduced delivery losses). In total, these benefits can account for 50% or more of the lifetime savings.

But let’s not stop there… the trickle-down impact of these utility-side benefits is minimal on the end-customers. Web presentment of customer data is a key enabler of the ‘big ticket’ CEM benefits – advanced rates, behavioral/technology-based utility programs, etc. These elements require a conscious utility effort to align their operation and business elements around data migration and program design, respectively.

The success of start-ups like MeterHero and MeterGenius, joining market incumbents like Arlington-based OPower and Toronto-based Lowfoot, indicates a common trend: utilities are turning to third-party companies to engage their customers.  As smart grid deployment grows across the US, we anticipate a significant growth opportunity for these providers to work with utilities to bring CEM benefits to life!

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