At DistribuTECH Nancy Bui-Thompson, President of Sacramento Municipal Utilities District (SMUD), gave an insightful presentation about her utility from the perspective of an elected official. I think that Nancy is one of the first examples of an elected official presenting at DistribuTECH. SMUD is and has been for some time one of the most forward-looking utilities in North America. It was the first California utility to reach 20% renewable power and the first to commit to 33% renewables. It is also one of the most energy efficient utiltiies in California.
It is governed by an elected board of directors, who are responsible for policy and strategy, and perhaps this is the reason it is very customer focussed and has consistently maintained high customer satisfaction ratings. For example during the rollout of the smart meter program it maintained an impressive 95% customer satisfaction rating. The major customer drivers are green, renewable and reliable, and the need for choice. Nancy emphasized that SMUDs unique governance model reserving policy for the board of directors allows SMUDs management and employees freedom to implement without interference.
SMUD is moving from a centralized utility with a business model based on selling electricity to a distributed utility providing localized grid services. This means SMUD is getting out of the business of selling electricity, and into the business of selling grid services.
Customer analytics includes collecting operational data on customer behaviour to help identify and provide new services. For example, these statistics helps identify early adopters, customers who are interested in renewable energy or energy efficiency in the home and who help drive programs focussed on theses areas. Customer data and analytics also helps with segmentation, defining the different market segments that require different types and levels of grid services.
Grid analytics is helping SMUD better manage outages. Collecing operational data and analyzing it to be able to predict outages has reduced the number of outages by 20% and the average durating of outages by 28%.
One of the most interesting innovations at SMUD is in the area of rate structure. SMUD and other utilities are in the interesting position for a retailer of trying to sell less of its product, in this case electricity. People are using less electricity as a result of personal interest as well as SMUD's own energy efficiency programs. But the money has to come from somewhere. SMUD has introduced a flat infrastructure fee. Currently every customer pays $18/month for the grid, independent from how much power they consume. SMUD has determined that $28 is the breakeven point, where the cost of maintaining the grid would be covered by infrastructure fees, and is moving towards that monthly change.
Another interesting innovation at SMUD (which I have seen elsewhere) is their solar power program. Customers can buy into solar power without the bother of having to install solar panels on their roofs. The first solar program was a 1 MW solar PV program designed for residential customers. The next will be a an 11 MW program for commercial customers.
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