Energy Companies Compare Customers

Feb. 15, 2009— -- The Dyer family's appliances always seem to be running. Whether it's the washing machine, dishwasher or blow dryer, their four children are regularly adding to their power bill.

So when the Sacramento Municipal Utility District mailed Greg Dyer a report card complete with a failing grade and a frown face for using more energy then his neighbors, it felt like he was in school again.

"I thought, 'You gotta be kidding me,'" he said. "It seemed a little childish to me."

Sacramento's utility company, known as "SMUD" to the locals, compared the Dyers to 100 of their neighbors in similarly-sized houses. SMUD hoped to tap into the age-old quest to "keep up with the Joneses" -- but in this instance, pushing customers to use less than their neighbors, and grading them.

Dyer said it wasn't a shock that his bill last April was higher than normal.

"It goes up in spring cause my wife teaches swimming," he said.

The Dyers have made a conscious effort to save energy by installing more efficient appliances, updating their heating and air conditioning and shutting down their pool pump during the winter months.

But the idea of being rated by a utility that Dyer complains is often "less than reliable," rubbed him the wrong way. He viewed it as HIS opportunity to rate SMUD, which "fails to keep the power on with the slightest breeze."

He e-mailed SMUD four frown faces back.

SMUD customer Tamara Kaestner had a different reaction after seeing her report. She discovered that she and her husband were using more than three times the energy of their neighbors.

"I opened it up and there was these bars that said, you know, average, and your neighbors and then me -- and I was just in shock," said Kaestner. "I thought, 'There must be a big hole in my house that's just sucking the energy in.'"

An in-home energy audit by SMUD revealed that her waterfall, fish tank and TIVO all were wasting watts. The detailed analysis tabulated exactly how much money each electrical item cost her monthly.

"The fish tank [cost] $6 a month," she said. "We have a turtle with a heat lamp, that's $10 a month. My waterfall cost $50 a month. I thought, 'I love my waterfall, but is it worth that?'"

Using tips provided by the utility, Kaestner installed dimmer switches and timers, and turned everything down 50 percent. But she couldn't sacrifice everything.

"I'd rather give up my microwave before I'd give up Tivo!" she said.

SMUD discontinued the use of frown faces on their reports after some customers complained, but managers argue the pilot program is working.

"All of us have an inclination to want to follow norms. I am sure that psychology appeals to people," said Ali Crawford, project manager for SMUD. "There is some science behind taking a universal symbol and pairing it to a message. It enhances the message. Smiley faces and frowny faces are universal symbols."

Of the 35,000 Sacramento-area homes that receive the energy comparison on a monthly basis, SMUD reported that they've lowered their energy usage by about two percent. How does that translate into saved power?

"It's equivalent to taking 700 homes off the grid," said Crawford.

The utility attributed the ratings system to the change in behavior (as opposed to the economy or weather) because it used a control group of 55,000 other homes.

In the next phase of the reports, SMUD will allow customers to go online and input information about the kind of heating source in their homes, their families and their power usage. The utility will then be able to offer more directed energy-saving tips.

SMUD is one of 10 utilities across the country that is trying to cut power use through peer pressure. Positive Energy, the software company that produced the report cards, said in addition to SMUD it's contracting with Puget Sound Energy in Washington state; Seattle City light; Southern California Edison; The Gas Company, which is the gas provider for all of southern California; Commonwealth Edison in Illinois and four smaller utilities in Minnesota -- the towns of Owatonna and Austin, and Connexus and Wake Country Power.

"This is providing people with a better context for understanding their energy consumption," said Alex Laskey, president of Positive Energy.

And it also apparently is a financial win for consumers.

"For every dollar the companies invest, the average customer saves about four bucks," said Laskey. "Utilities have to meet the demand of their customers either by building more plants or by helping to reduce demand. From a purely financial standpoint, this is a cheap, clean source of power."

SMUD's Crawford agreed.

"Wherever we can come up with an energy efficiency program, where the cost is less to save than it is to buy or produce, than that's our preference," Crawford said.

After her energy audit, Tamara Kaesner is now saving more than $150 a month.

The Dyers also cut their energy use, and now it's often below their neighbors.

"The real reward for me is that I have a lower power bill," said Greg Dyer.

Turns out, keeping up with the Joneses isn't so hard after all.