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Distributed generation an opportunity for positive customer engagement final

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The deployment of distributed generation (DG) such as rooftop solar continues to grow and is beginning to have a significant influence on the philosophy, design, and operation of the distribution system. In 2013, the price of solar systems dropped nearly 15% and the number of installations increased by almost 20%. With interest growing and costs trending downward, there is a new solar installation being completed roughly every 3 minutes! These types of radical, fundamental changes in any industry can pose a challenge, but within these changes there is also a significant opportunity for electric utilities to fundamentally (and positively) redefine their relationship with their residential customers considering adopting DG.

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Distributed generation an opportunity for positive customer engagement final

  1. 1. Distributed Generation: An Opportunity for Positive Customer Engagement Presented by Jim McClanahan Visit us at DistribuTech Booth #620 For more news and thought leadership, Follow us on Twitter @WMPUtilities
  2. 2. © 2014 West Monroe Partners | Reproduction and distribution without West Monroe Partners prior consent is prohibited. Jim McClanahan is a senior principal in West Monroe Partners’ Energy & Utilities practice and has over 25 years of experience planning and delivering innovative utility solutions. Jim possesses extensive experience in the electric utility industry and has held various leadership roles related to distribution automation, telecommunications, SCADA/EMS, metering, and capacity planning. He is able to offer a unique combination of technical and business knowledge and experience to our clients. Jim joined West Monroe Partners from S&C Electric where he was director of smart grid projects. Over the years he has held roles as a SCADA engineer and project manager, strategic planner focusing on development of a major utility’s integrated resource plan, meter superintendent, and director of engineering & operations for a utility telecom start-up. Jim is an active member of the Institute of Electrical and Electronic Engineers (IEEE) and its Power& Energy Society (PES). He earned a Bachelor of Science degree in Electrical Engineering from the University of Tulsa and a Master of Business Administration from Oklahoma State University. Jim McClanahan 2
  3. 3. © 2014 West Monroe Partners | Reproduction and distribution without West Monroe Partners prior consent is prohibited.  Discuss the explosive growth of distributed generation—today and in the future.  Explore why focusing on the customer experience is so important for utilities.  Offer strategies for enhancing the customer experience.  Provide ideas on how to quantify and measure the success of these strategies.  Suggestions on how the utility can remain engaged and relevant to the customers well beyond the initial application and commissioning efforts. What will we cover today? 3
  4. 4. © 2014 West Monroe Partners | Reproduction and distribution without West Monroe Partners prior consent is prohibited. Introduction 4
  5. 5. © 2014 West Monroe Partners | Reproduction and distribution without West Monroe Partners prior consent is prohibited. Recent headlines regarding the residential solar rollout 5
  6. 6. © 2014 West Monroe Partners | Reproduction and distribution without West Monroe Partners prior consent is prohibited. The projected penetration of rooftop solar means that utilities must consider the scalability of their processes to ensure a positive customer experience… 6 Potentially growing from an average of one deployment every 3 minutes to more than one a minute!
  7. 7. © 2014 West Monroe Partners | Reproduction and distribution without West Monroe Partners prior consent is prohibited.  The utility industry is currently seeing explosive growth of DG in the form of rooftop solar:  Price of solar systems  almost 15%, number of installations  around 20%.  Some utilities processing over one thousand applications each month.  There is a new solar installation being completed roughly every 3 minutes!  This is driving a very fundamental change in the utility industry:  Historically generation was centralized  Even “deregulation” did not fundamentally change the infrastructure.  With the emergence of DG, small-scale, geographically-dispersed generation is the emerging reality. The amount of Distributed Generation (DG), especially in the form of Rooftop Solar, is growing exponentially. 7
  8. 8. © 2014 West Monroe Partners | Reproduction and distribution without West Monroe Partners prior consent is prohibited.  Fifty years ago, utilities had “rate payers” instead of “customers”.  The long-running joke was that the customer thought of the utility once a month when they paid the bill and every time the lights went out.  But focus groups tended to group utility crews with public safety personnel.  As deregulation approached, utilities sought ways to be something other than a commodity and customer service has typically been a strength. How customers viewed the utility (and visa-versa) in “the good old days”… 8
  9. 9. © 2014 West Monroe Partners | Reproduction and distribution without West Monroe Partners prior consent is prohibited. Customers want utilities to:  Be easy to work with.  Provide genuine value.  Educate and Inform the customer.  Traditional Example: Energy efficiency awareness programs.  Where possible, provide choices and options.  Let the customer tailor their decisions to what best suites them.  Traditional Example: The “average monthly payment” plan.  Keep them informed.  Even bad news is better than no news at all.  Traditional Example: Information about outage cause and likely duration.  Treat them as individuals and provide the personal touch to service.  Listen to them. They want their opinions and ideas heard and valued. We want happy customers, but what exactly makes customers happy? 9
  10. 10. © 2014 West Monroe Partners | Reproduction and distribution without West Monroe Partners prior consent is prohibited. Disruptive Technologies 10
  11. 11. © 2014 West Monroe Partners | Reproduction and distribution without West Monroe Partners prior consent is prohibited. Disruptive technology always brings both challenges and opportunities. Utilities need to do their best to ensure DG is leveraged as a positive opportunity. 11 Major shifts offer both challenges and opportunities Customer expectations have changed dramatically DG applications can be about more than reliability
  12. 12. © 2014 West Monroe Partners | Reproduction and distribution without West Monroe Partners prior consent is prohibited. Call Center Internet Social Networks Interactive TV Customer Interactions InteractiveTV FieldService Differentiated Service How do I balance cost effectiveness with customer preference and experience? Channel Optimization How do I provide channel choice but also influence channel selection to minimize cost to serve? Seamless Experience How do we design and realize a seamless and integrated cross- channel customer experience? Consumers are changing how they interact with companies they do business with due to the explosion of smart devices and communication channels available to them As a result, companies are questioning where and how customers prefer to transact, relate and experience their communications with them As customer-enabled technologies, social media and cloud solutions change the game, customers needs continue to evolve and utilities need to adapt 12
  13. 13. © 2014 West Monroe Partners | Reproduction and distribution without West Monroe Partners prior consent is prohibited. Utilities have multiple areas to leverage these fundamental shifts in customer engagement 13 $ How do you engage customers to improve customer engagement & satisfaction Enhance Customer Experience Optimize Channels Reduce Cost to Serve Channel Strategy Marketing Program Design & Execution Enable 1:1 Marketing Brand Laddering E-Commerce and Digital Portals Segment your customers Setup a program to measure and act Connect the multi- channel experience Build CX capabilities and architecture Reshape your marketing mix Capture data and unlock insight Personalize offers and relationships Build an efficient technology platform Optimize customer service model Use each touch- point to drive value Use self service appropriately Focus on first time call resolution
  14. 14. © 2014 West Monroe Partners | Reproduction and distribution without West Monroe Partners prior consent is prohibited. The Enrollment Opportunity 14
  15. 15. © 2014 West Monroe Partners | Reproduction and distribution without West Monroe Partners prior consent is prohibited. Need/Want Recognition Research Evaluate Purchase & Enroll Post Purchase Residential Solar Purchase Lifecycle 15
  16. 16. © 2014 West Monroe Partners | Reproduction and distribution without West Monroe Partners prior consent is prohibited. Have I gotten a home energy audit and considered efficiency improvements? Do I have suitable roof space or space on my property for a solar PV system? Is it a good long term investment that matches my personal or family’s financial goals? What financing option is best for me? Who should I select as my installer? Before your customers contact you for interconnection and net metering applications, they have already made significant decisions. 16 Source: NC Clean Energy Technology Center Installing residential solar is a significant investment decision for your customers. They will have already invested significant time and effort before contacting their utility.
  17. 17. © 2014 West Monroe Partners | Reproduction and distribution without West Monroe Partners prior consent is prohibited. Enrollment Evaluation Approval and Agreement Commission and Inspect Ongoing Operation  Enrollment is often the first interaction the customer has with the utility.  Visibility into the process and progress is key  Established KPIs can give a measure of the effectiveness of your process:  Most customers enrolling are technology savvy, so having a process that meets their expectations may include things such as:  Web-Based Enrollment  On-Line Payment (of application fee)  Ability to trace progress of application on-line  Time to complete initial screen  Time to move through application to approval The enrollment and approval along with related activities should be easy, timely, and transparent. 17
  18. 18. © 2014 West Monroe Partners | Reproduction and distribution without West Monroe Partners prior consent is prohibited. The current “customer experience” for many utility customers with a typical “paper” (or PDF) type of application process. 18 Paper processes don’t scale as application volumes increase
  19. 19. © 2014 West Monroe Partners | Reproduction and distribution without West Monroe Partners prior consent is prohibited. The enrollment process can have the “look and feel” typical of online applications providing a feeling of familiarity (an ease of use) to the customer… 19
  20. 20. © 2014 West Monroe Partners | Reproduction and distribution without West Monroe Partners prior consent is prohibited. All information and related correspondences can be captured in a single database that customers and the utility can access at any time. 20
  21. 21. © 2014 West Monroe Partners | Reproduction and distribution without West Monroe Partners prior consent is prohibited. From the utility perspective, application can be handled via dashboards, improving communication and cycle times, while reducing soft costs. 21
  22. 22. © 2014 West Monroe Partners | Reproduction and distribution without West Monroe Partners prior consent is prohibited.  Be transparent  Separate internal and external focused items  Remember most customers don’t speak utility  Contractors communicate to your customers  Be proactive  Implement a scalable process  Prepare now for inevitable DG boom Like “making sausage,” there are many activities taking place within the utility during the application & approval process that customers won’t want to see in detail. 22
  23. 23. © 2014 West Monroe Partners | Reproduction and distribution without West Monroe Partners prior consent is prohibited. Operations and Customer Engagement 23
  24. 24. © 2014 West Monroe Partners | Reproduction and distribution without West Monroe Partners prior consent is prohibited.  Safety  Peak Load and Load Factor  Generation Mix  Optimization of Spinning Reserve  Power Purchasing  Distribution Planning & Engineering  Distribution Capacity Planning  Billing This growth is causing fundamental shifts in a number of areas across the utility. 24
  25. 25. © 2014 West Monroe Partners | Reproduction and distribution without West Monroe Partners prior consent is prohibited. While the tools associated with traditional utility assets and operations are mature, the tools associated with DG are just emerging or, in some cases, missing. 25 Largely Mature Emerging or Gaps Maturity for DER processes and systems is still developing.
  26. 26. © 2014 West Monroe Partners | Reproduction and distribution without West Monroe Partners prior consent is prohibited. Utilities are moving towards integrated IT/OT via an evolution to DERMS 26
  27. 27. © 2014 West Monroe Partners | Reproduction and distribution without West Monroe Partners prior consent is prohibited. And online tools facilitate evaluation of applications as well as provide key metrics (KPIs) for the application process. 27
  28. 28. © 2014 West Monroe Partners | Reproduction and distribution without West Monroe Partners prior consent is prohibited. Contrast that “utility experience” with doing things manually. A better process on the utility side will almost always lead to a better experience for the customer. 28
  29. 29. © 2014 West Monroe Partners | Reproduction and distribution without West Monroe Partners prior consent is prohibited.  Help customers quantify the benefits  Leverage interval data to offer proactive analysis and diagnostics  Shows the utility is “trying to help”  Can also lead to word of mouth awareness on both the value of DG and the customer’s experience with the utility  “Close the Loop” and actively seek input and feedback from your customers. Once the installation is complete, the utility still has the opportunity to be “more than another monthly bill.” 29 These are opportunities to stay engaged with the customer while providing information they find valuable.
  30. 30. © 2014 West Monroe Partners | Reproduction and distribution without West Monroe Partners prior consent is prohibited.  The utility will have information related to:  Predicted & Historic Performance of the customer’s system  Information about performance of other (similar) customer systems  This information can contain insight of value to the customer  Sharing this kind of information and insight with the customer enhances the customer experience An example of how the production curve for a solar installation can indicate problems, such as shadowing. 30 Why does the output not “fit” the expected production curve?
  31. 31. © 2014 West Monroe Partners | Reproduction and distribution without West Monroe Partners prior consent is prohibited. Hierarchy of Customer Needs: It’s a little like Maslow, but different West Monroe Partners' Customer Effort Index measures effort required by your customers at all touch-points and provides utilities actionable insights into opportunities for improvement. By evaluating the degree of member effort required to complete key interactions in a multi-channel environment, utilities can:  Focus on experiences at Key Moments of Truth & Touchpoints rather than a broad relational focus (Net Promoter Score)  Create loyal customers primarily by reducing effort - not simply by delighting them in service interactions 31
  32. 32. © 2014 West Monroe Partners | Reproduction and distribution without West Monroe Partners prior consent is prohibited. Customer Effort Index Assessment quantifies program impacts The Customer Effort Index Assessment provides targeted insights into how you deliver on customer experience, as well as insight into how you compare with other utilities. Specific insights include:  Benchmarking of customer experience against industry & market best practices  Channel-by-Channel analysis of strengths, gaps, and opportunities High Effort Low Effort 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 Public Website Effort Portal Effort IVR Effort Phone Effort High Effort Low Effort 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 Onboarding & Account Maintenance Billing & Payments Usage Service Orders Information/ Help Portal Overall Effort Multi-Channel Effort Customer Portal Effort Drill Down 32
  33. 33. © 2014 West Monroe Partners | Reproduction and distribution without West Monroe Partners prior consent is prohibited.  The Department of Energy has several initiatives underway to improve solar enrollment processes as a way to identify and reduce the soft costs associated with rooftop solar PV  West Monroe Partners is currently leading the utility engagement portion of the Midwest Grow Solar Partnership through the DOE’s SunShot Initiative, and has recently conducted a series of surveys to learn more about utility interconnection practices and customer application experiences.  Two outreach surveys are available online if you’re available to share your experiences:  For Utilities: https://www.surveymonkey.com/s/utility-engagement-survey  For Solar Stakeholders (contractors, contractors/installers, solar developers, academics, etc.): https://www.surveymonkey.com/s/solar-stakeholder-engagement-survey  While individual survey responses will not be shared publicly, we would like to use the aggregated responses to create a solar enrollment processes benchmarking tool and maturity model DOE focus on Solar Enrollment 33
  34. 34. © 2014 West Monroe Partners | Reproduction and distribution without West Monroe Partners prior consent is prohibited.  Just because a customer does not pursue installation, there can still be value in the interaction:  Identify “early adopters”  Enables proactive communication going forward  Seek to understand their decision: • Aesthetics? • Cost? • Complexity?  The industry is more dynamic than ever before:  Five years ago there was more talk about wind than solar  Lessons learned as solar DG ramps up may help in other areas • Electric Vehicles • Storage & Batteries • Cheaper Solar Utility initiatives related to DG can also yield other benefits and potentially be further leveraged moving forward. 34
  35. 35. © 2014 West Monroe Partners | Reproduction and distribution without West Monroe Partners prior consent is prohibited.  “Cheaper. Better. Easier.”  Providing real-time set-points to inverters  Distributed generation feeding the grid  Integration of storage  Distributed storage could be “charged” using off-peak, base-load generation  And more that we are not even thinking of at this point… What types of things may the future hold? 35
  36. 36. © 2014 West Monroe Partners | Reproduction and distribution without West Monroe Partners prior consent is prohibited.  Solar growth forces the utility and the customer to interact  Make that experience positive!  Technology has changed customer expectations  Embrace this!  Customers judge you based on their experience, not the “average” experience  The ability to scale is critical:  Scaling may be “success based”.  Growth may happen quickly and with little advance warning.  Metrics measure how you are doing and identify opportunities for improvement  The future is tough to predict… To recap some of the key points… 36
  37. 37. © 2014 West Monroe Partners | Reproduction and distribution without West Monroe Partners prior consent is prohibited. Thank you for your attendance! 37 Visit us at DistribuTech Booth #620 For more news and thought leadership, Please follow us on Twitter @WMPUtilities Contact information: Jim McClanahan jmcclanahan@westmonroepartners.com 770.608.4042 Questions?

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