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By Liz Enbysk

SGN Managing Editor

In the next decade, a larger proportion of consumers will be "digital natives," suggests Sensus CEO and President Peter Mainz. These digital natives have grown up in a world where the Internet and smart phones have always been available.

"This demographic shift," Mainz says, "will drive a change in the way customers want to access information and monitor and manage their usage of scarce water and energy resources."

And Rodger Smith, SVP and General Manager of Oracle's Utilities division, suggests the transformation of customer engagement from a reactive approach to a proactive one has already begun.

"Whether the tool is social media, the web, phone and text, Internet chat, or a combination of the above, technologies are offering utilities the opportunity to have better relationships with their customers," he says. "As one example, utility mobile strategies are growing, and will reach across the utility in the future."

Smith says it's not just about billing or outage management; it's about demand response, energy efficiency and prepay too "It's about utilities wanting to fulfill the expectations customers have of them, based upon those customers' proactive interactions with other service providers."

And they may be doing that with new tools. Comverge Marketing VP Jason Cigarran says his company believes a major change within the next decade will be the integration of consumer engagement technologies within broader energy management programs and existing consumer electronics.

"Just like the pager disappeared when text messaging became commonplace on mobile phones," Cigarran says, "we expect standalone energy devices to become a thing for the history books within the next 10 years"

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A utility's perspective

Portland General Electric (PGE) can confirm the shift in how customers are connecting with the utility. Conrad Eustis, PGE's Director of Retail Technology Strategy, says many customers are using its website as their primary way of doing business with PGE. And more and more customers are turning to social media for information on outages or customer service questions.

Eustis says more than 50,000 of PGE's residential customers have logged in to PGE's new Energy Tracker program, an online program that examines customers' electricity usage and allows them to view their usage, analyze their bill and learn what uses the most electricity in their homes.

"PGE's new Switch Labs video series is becoming a huge win with customers," Eustis adds. The online series breaks down energy myths and common misconceptions – like whether laundry really gets clean in cold water and what is the most efficient way to boil water.

"More than 40,000 customers have viewed the series and the number continues to rise as they share episodes via their social networks," Eustis says.

Selling the smart grid value proposition

As has been demonstrated around the U.S., the smart grid value proposition can sometimes be a tough sell. Or, some would say it's not being sold the right way.

Jeremy Eaton, VP and General Manager of Honeywell Smart Grid Solutions, acknowledges the difficulty utilities face in communicating it to customers. For instance, he says, dynamic pricing tariffs are hard to grasp and yet can have a wide-ranging impact on individual consumers. "So there is a void in – and ample opportunity to develop – technologies that help convey these benefits in terms of cost savings and convenience," Eaton suggests.

But as more utilities deploy smart meters and create more demand-side management programs, Eaton says Honeywell anticipates more focus on getting scalable, intelligible and actionable information to customers. "The goal won't be simply 'engagement,'" he says, "but meaningful and measurable interaction in an affordable manner."

Ron Sege, Echelon CEO, says his company's experience strongly suggests that customers need to be actively involved in the success of the smart grid. "The worst approach is to place door hangers saying, 'We're replacing your meter.' Time-of-use pricing without strong customer engagement just makes people angry," Sege says. "It does nothing to modify consumption behavior, and consumers just see their bill going up."

He adds: "Without education, customers don't understand why they need smart meters. What they see is that the utility saves money and can charge them more. They also wonder if the meter is safe and secure. As an industry, we need to do a much better job of communicating the benefits of the technology."

So how do you do that?