Energy Feedback and Value
This past week I attended the Utility Energy Forum conference held at Lake Tahoe. One of the more interesting presentations was by Bruce Ceniceros of the Sacramento Municipal Utilities District (SMUD). SMUD has been testing Positive Energy's paper-based energy feedback product in a controlled experiment. 35,000 randomly assigned customers are receiving the Positive Energy feedback, and 55,000 customers are a control group.
The results Bruce presented indicate that overall reduction in energy usage is about 2% (treatment group compared to control group). Although Bruce didn't present specific facts or numbers, my subsequent discussion with him suggested that the $1 million investment in the Positive Energy solution had a positive benefit of about $2 million (the math formula was a bit fuzzy here for me, so I can't do justice in explaining it -- so for now we'll need to take Bruce's word). Also, no data was presented with regards to overall customer savings on their bills -- which I think is another way of assessing the value of the $1 million investment for 12 months. So, let's try a simple hypothetical: ((35,000 customers x $100 average bill) x 12 months) x 2% = $840,000.
The point I am making is whether enhanced feedback has value. Given the hypothetical illustrated above, the answer is "no" for the first year if customers had to pay for the feedback (which they are not). Yet what we don't know if those savings will persist in subsequent years, and whether if SMUD continues to invest in this feedback whether we'd continue to see reductions year after year (the law of diminishing returns might come into play).
Anyway, it is good to see that feedback has impact, but the program is missing one significant theory-based element that is inconsistent with the Coproduction Experience Model and previous research: that of goals. The PE report doesn't include a goal. It just shows the social norming data (which if you want to stretch things could be considered a goal). Now Bruce did report that a hundred or so postcards with various goals (5%, 10%, 15%) were sent to some subjects (about 200), but the details on this were also fuzzy.
Another interesting fact about the study is that about 3% of customers called, emailed, or wrote to opt-out of the program.
I've emailed Bruce to get some more details, and will update the post as I learn more.
The results Bruce presented indicate that overall reduction in energy usage is about 2% (treatment group compared to control group). Although Bruce didn't present specific facts or numbers, my subsequent discussion with him suggested that the $1 million investment in the Positive Energy solution had a positive benefit of about $2 million (the math formula was a bit fuzzy here for me, so I can't do justice in explaining it -- so for now we'll need to take Bruce's word). Also, no data was presented with regards to overall customer savings on their bills -- which I think is another way of assessing the value of the $1 million investment for 12 months. So, let's try a simple hypothetical: ((35,000 customers x $100 average bill) x 12 months) x 2% = $840,000.
The point I am making is whether enhanced feedback has value. Given the hypothetical illustrated above, the answer is "no" for the first year if customers had to pay for the feedback (which they are not). Yet what we don't know if those savings will persist in subsequent years, and whether if SMUD continues to invest in this feedback whether we'd continue to see reductions year after year (the law of diminishing returns might come into play).
Anyway, it is good to see that feedback has impact, but the program is missing one significant theory-based element that is inconsistent with the Coproduction Experience Model and previous research: that of goals. The PE report doesn't include a goal. It just shows the social norming data (which if you want to stretch things could be considered a goal). Now Bruce did report that a hundred or so postcards with various goals (5%, 10%, 15%) were sent to some subjects (about 200), but the details on this were also fuzzy.
Another interesting fact about the study is that about 3% of customers called, emailed, or wrote to opt-out of the program.
I've emailed Bruce to get some more details, and will update the post as I learn more.
posted by Peter Honebein at 5:41 PM
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