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Here are five specific ideas.

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A lot of utility communication plans are tied to rate cases, and utilities are filing a lot of rate cases these days. It looks like 100 or more rate cases will be filed across the nation this year. The numbers were similar for 2010 and 2011.

For gas utilities, many of these rate cases are to lower prices, given the plummeting cost of natural gas. But for electric and combination utilities, even those that rely heavily on natural gas to generate electricity, the trend is in the opposite direction: rising prices, largely driven by stiff new environmental regulations. “We’re looking at annual price increases for nearly a decade,” was the gloomy prediction of one utility communicator.

Utility communicators invest a lot of time and effort developing and implementing rate-case communications. It’s one of the most important things they do: planning and implementing a communications strategy and preparing the materials — press releases, fact sheets, FAQs, talking points, public meetings, customer alerts, and employee communications — to achieve the company’s communications goals.

Utility rate-case communications materials are full of facts, such as:

• environmental regulation of power plants
• changing price of natural gas
• cost per kilowatt-hour or therm
• percentage change in the monthly bill
• construction of renewable energy generation
• rising cost of labor and materials

Facts are never in short supply. But managing customer perceptions is another story. Utility communicators often struggle when they try to convince customers they are receiving greater value for the increased cost they are paying.

This is borne out in the annual J.D. Power and Associates utility customer satisfaction (CSAT) surveys. One of the more significant components of a utility’s CSAT score is its customer’s perception of value received for the price paid.

Among residential customers of U.S. electric utilities, the so-called price/value ratio has dropped by about 14% over the last decade (see chart). The scale is 100 to 1000, so the data show that decline doesn’t start from a particularly high point.

Because most customers consider “price” as synonymous with “utility bill,” and because there will be several forces pushing up utility prices (and utility bills) for the next few years, the pressure will be on utility communicators to show their companies are providing increased value to customers that offsets the rising bills.

One utility communicator told me, “If we can show that value is rising faster than prices, we’ll be OK.” This is easier said than done. Many, perhaps most, utilities have broadened their range of programs and services in recent years. But the J.D. Power data shows that residential electric customers still feel the price they pay is rising faster than the value they receive.

EEC has shared some tips for how utilities can make energy real to their customers.

• All of those tips stem from a utility’s public-service mission.
• All of these tips can build high-quality bridges to customers.
• All of these tips will increase the perceived value of your utility service.

Category leaders like Apple, Starbucks, Amazon.com, Toyota, and FedEx don’t focus on facts. They deliver meaningful experiences that provide value to customers. We urge utilities to better understand and emulate the way these category leaders interact with their customers.

Utilities know there’s no short-cut to building a new generator. There’s an orderly process, an understanding of inputs and outputs, and a distinct timetable.

Building better relations with customers is no different than building a power plant. But while most electric utilities have mastered the art and science of building power plants, relatively few have been able to transfer (or build) that expertise in their communications function. Some utilities get it: they understand what customers’ value and use those insights to show they are providing greater value. Many utilities are on that road, but they haven’t arrived yet. A few have yet to get out of the starting gate.

But because the next few years will see near-annual rate-case filings, we can look forward to a future filled with “learning opportunities.”

Every interaction with customers is a communications opportunity. Utilities show what they value—positively and negatively—when they communicate with customers. That includes verbal communications, such as advertisements and newsletters, as well as non-verbal communications like customer programs.

Indeed, the nearby pie chart, based on research conducted by psychologist Albert Mehrabian, shows that more than 90% of the meaning in a conversation is conveyed through non-verbal means. For companies than cannot communicate individually with each of their customers, this means actions, like offering programs, counts for way more than the words is an ad or a press release.

Utility communicators and marketers have a unique challenge: connecting with (mainly residential) customers about a vital service that can’t be seen, touched, tasted, or otherwise experienced—except when the lights go out.

Consumers in restructured markets like Texas have one way—price—to assess the relative value of electric service. Utilities inside and outside restructured markets have offered “green” electricity for years. But for utilities and their regulators, the programs are generally, if not universally, unsatisfying.

Many utilities are using—or planning to use—price as both a carrot and stick in their efforts to change the way their customers use electricity. Lower your usage, or shift usage to off-peak periods, and you could lower your electric bill. Fail to do that and your electric bill will rise.

Positioning electric service as something painful to be minimized puts utilities—and their communicators—in a lose-lose situation. Option A: Do things your way and get hammered. Option B: Do things our way and get hammered somewhat less.

That’s what happens when you position your service on price for a century. But there’s another approach that offers potentially high paybacks and low costs. It involves putting the “public” back in “public service.”

Recently, I spoke at a utility-industry conference session on “Making Energy Real.” Here are five programs that utilities are, or could, use to demystify electric service and build bridges to their residential customers:

•  Free walk-through energy audits
• In-home displays (perhaps loaned on a short-term basis)
• Direct-installation of energy-conservation measures
• Pre-pay metering
• Employee ambassador programs

Utility executives are depending on their communicators and marketers to achieve certain levels of success in various customer-facing programs like time-differentiated rates, energy efficiency, and demand response. Real dollars – often a lot of them – are at stake. Penalties too. And potentially even additional profits.

Having been a utility communicator, and now as an adviser to utility communicators, I know that customer interactions can be awkward or difficult. Utilities are technical, analytic, legal, and precise. They think about the long term. They are anxious about setting precedents.

Typically, customers are none of those things: They don’t know what they want—but they know they want it now. They want the services they consume to be have high value. Sometimes that means low costs. Sometimes it means added features and benefits. Most times, it means convenience and customization.

The five programs listed above are all high-touch, but not necessarily high cost. They focus on non-price ways to make energy real without being punitive. It invites them to learn more about electricity and energy by meeting them where they live—literally and figuratively.

And if they have no desire to learn about how electricity is generated, transmitted, distributed, and consumed, that’s fine too. They have a problem and they want it fixed. They’ll think better of you if you can quickly fix their problem so that both of you can go on your separate ways.

At the utility conference where I spoke, no attendee said their utility was doing all five programs. Some said they were doing one. Many said they were doing none of them.

Failing to develop non-price ways to connect with customers carries significant risks. It keeps utilities in the “lose-lose” proposition, vulnerable to criticism when prices increase and completely exposed to customer wrath when a once-a-century weather event turns out the lights for days at a time.

Is that a risk you want to take?  Reduce that risk by following these utilities communications tips.

If you would like to automatically receive new EEC postings on utility communications issues, we invite you to sign up for free email updates on the EEC homepage.

Many utilities are turning to energy communications consultants to fill the gap between what needs to be done and what can be done with existing staff.

There are many energy communications consultants in the market – how do you select the right one for you? In my experience, these factors play a critical role:

1. Industry expertise: Utilities prefer to work with consultants who are experts in the utility business. If a communications consultant works on potato chips on Tuesday and computer chips on Thursday, why do you think they would have any useful insights about utility issues on Friday?

2. Cultural Fit: Clients and consultants need to interview each other to see if they would enjoy working together. What works for one client might not work for another client. During an interview, both sides should actively probe for “elephants in the room,” i.e., issues that are difficult or awkward. If you don’t surface these issues at the beginning, they will surface on their own down the road – when it is more difficult, time-consuming, and expensive to fix them.

3. Due Diligence: Like any important decision, you will need to invest time in identifying, selecting, and backgrounding a communications consultant. Whether it’s a strategic engagement or a specific deliverable, each side needs to do its due diligence. That requires time, phone calls, and possibly a site visit. Skimp on this and one of you will look back with remorse.

If you’ve made it this far, and you think I could help you, perhaps you’d like to review some of my energy communications work samples.

You may also want to know that for a limited time I am offering prospective clients a complimentary, confidential, energy communications consultation. I have found this is a great way for us to get to know each other better.

Lastly, if you’re not in the market for an energy communications consultant today, but would like to stay in touch, I invite you to sign up for free email updates on the EEC homepage.

Some utilities are having trouble implementing Smart Grid or Smart Meter projects that rely on customers changing the way they use energy. Reaching customers and getting them to consider changing their behavior requires a long-term, integrated, campaign that includes customer communications, media relations, and public relations, among other tools.

There are plenty of ways to do this right–and many ways to miss the boat. As a utility, your legacy precedes you: in many ways, it predetermines whether you will succeed or fail.

Pacific Gas & Electric is one utility that ran into trouble with its Smart Grid communications. Whether those problems have been fully resolved, as PG&E officials claim, only will become clear in time.

But another, higher profile clash has erupted over Xcel Energy’s Smart Grid program in Boulder, Colorado. Matters have deteriorated to the point where the City of Boulder is trying to municipalize Xcel Energy’s electric system in the city, in part because of the way the utility implemented its Smart Grid plan there. Losing Boulder as a customer would mean losing an annual revenue stream of about $100 million.

In talking with people who are participating in Xcel Energy’s “SmartGrid City” project in Boulder, I was struck by how often they said poor communications was the root of their frustration and anger.

When customers and other stakeholders don’t feel they have been communicated with honestly and completely, there can be startling, even fatal, consequences. Here I discuss some instances where utilities suffered after they lost sight of their customers and other stakeholders.

If you want to avoid repeating the communications difficulties associated with Xcel’s Smart Grid program, perhaps I can help. I have found the adage, “an ounce of prevention is worth a pound of cure,” particularly applicable to utility Smart Grid communications.

I offer prospective clients a complimentary, confidential, communications consultation, including an in-depth review of up to 10 pages of your Smart Grid/Smart Meter communications plan. I have found this is a great way for us to get to know each other better. Successful Smart Grid programs require a solid foundation of utility communications.

No, that wasn’t a line from Dennis Hopper in the movie, Speed. In fact, I was asked that question during an interview to become a spokesman at Salt River Project, a Phoenix-based electric and water utility.

I got the job, so I suppose I answered the question satisfactorily. That long-ago interview question surfaced as I read a New York Times about about how poorly some utilities were communicating with customers and elected officials about power restoration efforts in the wake of Hurricane Irene.

A week after Hurricane Irene dissipated, tens of thousands of homes and businesses in Connecticut, New York and New Jersey were still without power.

According to the Times article, New York Governor Andrew Cuomo was “frustrated by the difficulty he encountered in getting some utilities to communicate.” Utility customers also were frustrated by a “lack of solid information about how long their plight would last.”

And what did Jeff Butler, president of Connecticut Light & Power, say when the bright lights of the news media were shining on him?  That the utility’s rates would have to increase to recover the estimated $75 million it was spending on power restoration.

Wow – talk about the wrong message to the wrong audience at precisely the wrong time … that was a real trifecta!

It’s too late for CL&P to benefit from my outage communication recommendations.  But I share them with you in the hope that they can prevent unnecessary pain and suffering the next time severe weather plunges your customers into darkness.

If he were my client, I would recommend Mr. Butler meet with work crews, customers, and elected officials wearing a logoed windbreaker and a hardhat. He would be photographed walking through darkened neighborhoods, meeting with customers, assuring them that crews were working diligently, 24/7, to get their power back on.

I also would recommend he “get his hands dirty” by helping hand out food, water, and supplies at local emergency stations. He’d be filmed meeting with employees and customers at outage sites, touring the damage and looking engaged with all of the utility’s stakeholders.  

When Mr. Butler stepped to the microphones, he would limit his comments to saying that CL&P is working around-the-clock to restore power in a safe manner. He would provide an estimate as to when the lights in a given neighborhood would be back on.

If pressed by reporters, as he would be, Mr. Butler would be counseled to say, “We’re not thinking about the costs of restoring power. That’s tomorrow’s issue. Today’s issue is safely restoring power as quickly as possible, so you can get on with your lives. That’s all we’re focused on.”

After stepping away from the microphones, he would provide emergency service officials with a check from CL&P to help pay for the costs associated with relief efforts. 

Because our 24/7 news cycle never ends, I would counsel Mr. Butler to go back into the field, interacting with customers and employees to continue fighting for control of the story.