Can Energy-consumption Data Change Consumer Behavior?

By Knowledge@WhartonNov. 16, 2012

Time magazine

Do you know how much energy you consume every 15 minutes? Most would say that’s a hard — if not impossible — question to answer, but San Francisco-based utility provider Pacific Gas and Electric (PG&E) now has access to that information for 30,000 of its residential customers, thanks to its “SmartMeter” program. PG&E’s SmartMeters are its prime vehicle to fulfill its mandate from the state of California to get people to use less energy.

For 36 months (January 1, 2009, through December 31, 2011), PG&E has used SmartMeters to collect consumer energy-use data in Northern California. The devices measure residential customers’ electricity and gas usage at daily, hourly and 15-minute intervals. The goal of the program, according to PG&E, is to help customers better understand their energy usage and find ways to save on their energy bills. According to the PG&E website, customers who participate in the program have the ability to be notified by email, text message or phone when their utility use “is moving toward a higher-cost tier.”

The energy consumption data will supplement existing information on customers’ demographics, billings and payments, call center reports and utility pricing, among other variables. The company states that by studying all of this information, it hopes to gain insights into how its SmartMeter platform might be used “to engage customers, reduce energy consumption and offer customers appealing alternative pricing schemes.”

But with so much data to sort through, that’s a tall order. PG&E has partnered with the Wharton Customer Analytics Initiative (WCAI) to lead the effort, which will help identify academic research groups across the world to study the data. Peter Fader, Wharton marketing professor and WCAI co-director, notes that the PG&E project has wider implications for businesses that increasingly use data analytics to extract business intelligence, by offering a model on how to determine the volume and quality of information they need to track in order “to change behavior in meaningful ways.”

“This is a unique data set, and we don’t know of any other that has this level of granular data,” noted WCAI research director Ben Adams during a webinar announcing the research project earlier this month. In addition to energy usage data, researchers will get information about PG&E’s energy efficiency rebates, demand response programs and special rate plans that were available to the customers covered in the data. PG&E will safeguard customer privacy and sign nondisclosure agreements with researchers, company executives said at the webinar.

Studying data collected by the meters will help the company figure out “which message to send to which household at which time in order to get them to conserve energy,” says Fader. “Our job is to find the right academics out there who will help them answer [these] questions.” Those who are selected will receive PG&E’s data sets, and are expected to spend a year studying them before they file their findings and recommendations.

http://business.time.com/2012/11/16/can-energy-consumption-data-change-consumer-behavior/#ixzz2CgwrzJfl