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Save Energy, Win a Prize
Published: July 23, 2012
With temperatures hovering near a sweaty 100 degrees in recent weeks, the nation’s electric utilities have been taking to Facebook and Twitter, urging customers to conserve energy in the hopes of avoiding blackouts and other strains on the system.
Mark Lattanzi has been in a rewards program for about a year through the Western Massachusetts Electric Company.
Tom Lyons of San Jose, Calif., said that receiving a report on his home's electricity use reinforced conservation efforts.
At Duke Energy, the country’s largest utility after its merger with Progress Energy, the effort has included something beyond the usual messages to turn down the air-conditioner. The company is promoting a series of Web videos featuring a fictitious girl named Shannon who appears with her family, the Powers, to dispense energy-saving advice.
“This summer, why not use a clothesline to dry your clothes instead of a dryer?” Shannon, also known as Bossy Pants, suggests while pinning up the family wash in a clip promoted recently on Youtility, Duke’s Facebook page for energy efficiency. “You’ll save a lot on your energy bill and your clothes will come out nice and fresh.”
The series, started last summer, is just one way that Duke and other electric companies across the country are trying to use social media, competitive games and Big Brotherish data analysis to push customers to buy less of the electricity they sell.
While it seems counterintuitive for utilities to discourage use of their product, it actually makes financial sense as they face government mandates to encourage more energy conservation and deal with the rising cost and difficulty of building power plants and distribution systems.
So in Chicago, a household that uses a lot of electricity might receive a mailing showing that more energy-efficient neighbors wash their clothes in cold water, along with a coupon for Tide Coldwater detergent. In Texas, customers can compete to be named the Biggest Energy Saver and get a shot at winning new appliances, home improvement gift cards or $5,000 to put toward a wind turbine. And outside Boston, customers earn points for saving energy that they can redeem for meals at local restaurants or a $10 discount at Whole Foods.
Motivating people to save energy isn’t really about the money, behavior experts say. Successful programs foster a sense of achievement and identity. And competing to beat your friends and neighbors at the savings game doesn’t hurt.
Many of these programs are still in their infancy, and it remains to be seen whether a significant number of customers want to work with their utility companies over energy savings; most customers become interested in their electricity only when it doesn’t work, executives and experts say. The Duke Youtility page, for instance, has fewer than 3,300 “likes,” and most of the recent comments complain about power failures, rate increases and the company’s troubled merger with Progress Energy.
But utilities hope to tap into the same dynamic that works for video games and applications like Foursquare, where users compete against one another to earn bragging rights, like becoming “mayor” of a favorite restaurant.
Opower, a leading home energy management company, has shown promising results with its keeping-up-with-the-Joneses approach, sending people reports on how their electricity use compares with households in their neighborhoods — complete with a smiley face, or two, depending on how they stack up. The company has created an app with Facebook and the Natural Resources Defense Council that can load a user’s energy data and allow people to compete with their friends and family.
Soon, said Daniel Yates, a co-founder of Opower, customers of the roughly 75 utilities he works with will be able to earn electronic badges saying things like “Congratulations: You are an energy saver” for cutting their bills.
While it might sound hokey, the strategy works. Tom Lyons, a customer of Pacific Gas and Electric in San Jose, Calif., said Opower’s feedback was reinforcing. “You’re getting some nourishment or some reward from the energy report and the smiley faces,” he said.
When his conservation efforts slip, he said, it makes him dig for the reason: extra company that month, working more from home or his daughter having a couple of sleepovers “where they were yakking, watching TV with all the lights on in the room until 3 a.m.”
States and utilities have run conservation programs for decades, with some success. Many households have compact fluorescent bulbs, Energy Star-rated appliances and even programmable thermostats.
But the current efforts are aimed at helping customers to change their habits as well.
“I think we’ve transcended the equipment and the shell of the house, and now we’re talking about the how,” said Tom Baron, senior program manager for residential energy efficiency at National Grid, an electric and gas utility in the Northeast. “Not, ‘What in my house uses energy?’ but, ‘How do I use it?’ ”
The need to find ways to encourage long-term conservation is ever more critical, utility executives and efficiency experts say. At least 25 states have set specific goals for reductions in energy use that in many cases will continue to increase even as electrical demands and the grid’s complexity keep growing.
In 2010, the total budget for utility customer energy efficiency programs was $4.6 billion, up more than four times from the $1.1 billion spent on such programs a decade earlier, according to the American Council for an Energy-Efficient Economy. The vast potential of the energy efficiency market has spurred interest in home energy management from major companies like Verizon and Comcast as well as a fleet of start-ups.
But getting people to care about their electricity and work with their utilities is a battle. Electricity is “boring and it’s cheap,” said Alex Laskey, an Opower co-founder. Many efforts have already foundered: Microsoft, Google and Cisco Systems have pulled back from their ventures, and Tendril, a start-up that works with utilities including Southern California Edison and Con Ed, lost two executives and cut its staff in May, as it raised money to finance its operations.
Part of the challenge is that while most people see saving money as a good thing, it is not enough by itself to change habits in the long term. The average household spends about 2 percent of its income on electricity, so a 10 percent reduction in power use doesn’t add up to much, Mr. Laskey said.
Instead, people can be motivated by more emotional factors, like the sense of achievement that comes from setting and reaching goals or one-upping a neighbor, or the sense of belonging that comes from mimicking friends or participating in a communitywide challenge.
Nonetheless, a little financial reward, coupled with a clear display of energy savings, can be just the nudge customers need.
One program managed by C3, a company that contracts with utilities to run loyalty programs, awards participants two points for every kilowatt-hour less in electricity they use each month compared with the year before they joined. Customers can redeem the points for gift cards or discounts at places like Staples and Amazon.com, or local restaurants and shops. The company uses demographic and behavioral information to present specific offers to customers — discounts on school supplies in the fall to households with children, for instance, said Tom Scaramellino, senior vice president and general manager of C3.
Mark Lattanzi, who has been in the program for about a year through the Western Massachusetts Electric Company, said he had shaved about a third off his bill, through replacing his old electric water heater and a range of small behavior changes like turning off the lights and using the clothesline. It helps, he said, to receive an automatic monthly e-mail that shows how his electricity use compares with the same month in his baseline year.
And the rewards points are an incentive, too. Mr. Lattanzi has already earned a $10 gift card for Whole Foods and is waiting to use the rest at restaurants that are joining the program.
“Restaurants that I already go to are giving me discounts and gift cards because I saved a little money on my electric bill?” he said. “That’s a win-win.”
The original article can be found here.