Are third-party partnerships the silver bullet for customer engagement in demand response?

By Will Adams, Manager of Research Services –

For years, utilities have been challenged to effectively engage customers in energy-saving programs, products and services.

Many of these marketing efforts culminate during the hot summer months, when utilities roll out campaigns for A/C cycling programs, smart thermostat rebates or HVAC upgrades to lower peak demand and help customers mitigate high energy bills. Overall customer engagement, knowledge and participation in EE/DR program offerings, however, have struggled, but Commonwealth Edison may have found a potential solution.

Last month, the Chicago-based Exelon subsidiary announced a smart thermostat partnership with the cable provider Comcast Xfinity for up to 10,000 residential customers.

Source: Xfinity

Participants in Xfinity Home’s Summer Energy Management program receive incentives up to $40 and, for those who qualify, a free smart thermostat for signing up. The announcement also includes Nest’s Rush Hour Rewards program, a continuation of a 2014 offering. The programs allow Xfinity or Nest to adjust thermostat settings for customers on days of peak demand, helping them save money.

These partnerships represent part of a larger trend in the industry as utilities look to avoid marketing, installation and management costs for DR by offering bring-your-own-thermostat (BYOT) programs with third parties, while still financially benefitting from a reduction in peak demand.

Results from a recent Chartwell Consumer Attitudes and Behaviors Study show that customers are more likely to pay attention to their energy use when they’re able to see significant savings – about 30% of their energy bill.

But to help customers realize these potential savings – while reducing peak demand, increasing customer satisfaction and delivering value to shareholders – many utilities might want to consider the significant potential of partnering with well-established and trusted brands.

Yet Comcast’s venture into the electric business is not new. In Pennsylvania, the Philadelphia-based company started offering its Energy Rewards program with NRG Energy to customers with a $25 incentive and free HBO for participating.

While ComEd’s pilot with Comcast isn’t necessarily the first co-branding effort in the industry, it is yet to be seen exactly which company would benefit most from potentially higher customer satisfaction.

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