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April 26, 2013

When Big Data Wakes the Sleeping Giant

Isaac Lopez

Hydro Ottawa entered the arena of big data a little bit naively, admitted Norm Fraser, Chief Operating Officer for the utility that supplies Ottawa with electricity. During his talk at the Future of Utilities conference, Fraser discussed how his company’s move towards big data changed the nature of their relationship with their customers, and woke a sleeping giant.

The story started in 2005 when Hydro Ottawa made the decision to be among the earliest adopters of the smart metering technology – a process which took them the better part of 5 years, with the stragglers finally coming on line in the last year. But to really understand the significance of the shift, you have to consider that in those five years the company was throwing away a hundred year old billing model.

“For 100 years, our great grandparents, our grandparents, and our parents all experienced the same relationship with their utility,” explained Fraser in explaining the sleepy mentality of their customer base. “Somebody walked around the neighborhood – or drove around if there are RF meters – took a reading every one or two months, somebody would key it into a system, and a bill would get mailed.”

With the installation of meters, suddenly the company had a tidal wave of data running through their system, that according to Fraser, created more electronic traffic running through the network in Ontario for electric utility activity than there are for banking transactions. Instead of 6 data points per year, per customer, the company was now faced with 8,760 data points per year for each account.

While this new system gave the company a great way to implement new billing policies – their entire customer network is billed on time of use rates that fluctuate during peak and down times. The change also did something a great deal more dangerous and unanticipated, cautioned Fraser. It woke their customers up.

“Not only did our relationship with our customers change, but their relationship with us changed,” said Fraser. “They are no longer passive and trusting and hard wired. They are now, as I say, ‘interconnected.’ They have many interests, and they are more interested in energy because we told them they had to be with time of use rates. As a result, not only did we become more aware of them, they become more aware of us.”

This change in customer awareness sparked a whole new reality for the small utility, explained Fraser, who says they weren’t necessarily prepared for this shift in engagement and were caught in a reactionary mode to adjust to it.

“My personal view is that because of this change, trust might be a little more fragile,” said Fraser. “Even though we were ahead of the game on the roll out on the ‘time-of-use’ rates and all of the devices in the field, we were actually reacting with nit came to our customers reaction to this. When it came right down to it, we didn’t anticipate what they were expecting of us in the future.”

The customer reaction to the increase in data uptake and the rate plan changes that came with it sent the utility scrambling for more information (they conducted a survey to build customer profiles), and accelerating plans that had not necessarily been fully baked.

“We woke up,” said Fraser. “We had an early customer service strategy and we started implementing things that would maybe try to leverage our smart meter and time of use rollout and our AMI (Advanced Metering Infrastructure) system.

This included shifts to offer electronic billing, consumption and billing data information available the next day, profile management, pre-authorized payment options, and customized alerts for such things as dollars spent, bill prediction, percent of peak consumption, payment reminders, and collection alerts.

“Now part of the program, we have to have presentment,” explained Fraser. “The customer has to have access to the information that is embedded in their meter. So we prepared this – we give them a dashboard that they can customize themselves so they have access the next day to their consumption data – it’s not real time yet. They can look two months back, they can download data in PDF or Excel format and give it to a third party provider to analyze for them.”

But the more that you do for your customer, says Fraser, the more you have to do. And their technology isn’t necessarily there to do all of the things that they would like to do, said Fraser in talking to a room full of utility executives.

“Most of you are aware the the utility does not know that there is a power outage unless it’s a big one, or the customer actually calls you and tells you about it. The promise of a smart meter is that the meter will do that for you, and I was all excited when we put the smart meters in. I thought, ‘finally, we’re going to get last gasp (the meter saying help I’ve lost voltage) and we will be able to offer to all of our customers individual personalized alerts for their household – your power is out, crews are on the way. Or alerts on restoration time, and call backs to make sure that they’re back on. It’s like the holy grail for utilities. I have been convinced in the last couple of years that is an elusive goal.”

The problem says Fraser, is a lot more complicated than he thought it would be, particularly for a mesh network, and it’s something that the company is not willing to implement unless they can be assured that they will get it right. “The danger of missing something, or sending out an alert when it’s not real – a false positive – is playing with your customer satisfaction. It’s easier to say we’re on our way, globally, than to send a message to a customer saying your power is out when it isn’t or not to send a message when it is.”

All things considered, things have actually gone pretty good, comments Fraser. Call durations for outages have decreased. They’ve received positive customer feedback on ease of use. Call volumes are down. Customer satisfaction is going up. The question, however, asks Fraser, is whether it is sustainable.

“I do feel like this is a lot more fragile because we woke the beast,” he says. “I believe that customer satisfaction is very fragile, and it’s more fragile than it used to be. Once you do some of these things, you can’t put the toothpaste back into the tube. Once you have access to data, once you have access to devices and more IT, the tendency for your organization is to get really excited and start offering them to customers. My caution is to go in with your eyes open.”

Fraser concludes that enterprises customer engagement should be ahead of the installation, not in reaction to it. “Investments that you make now in automation, culture, and staff competence, all of those things will pay back handsomely and you will not find yourself scrambling.”

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