There is a need to understand the value of electricity – not its cost, but its value – and how central it is to nearly everything, Pepco Holdings (NYSE:POM) Chairman, President and CEO Joseph Rigby said June 19.
“It keeps our home lit [and] it drives businesses,” he said, speaking at the Utilities Telecom Council’s Critical Infrastructure Communications Policy Summit held in Washington, D.C. “The very thing that we want to have happen in our country, which is an economic resurgence, is very much dependent upon a reliable electric grid.”
After the panel discussion, he told TransmissionHub, “If you’re not keeping the bulk power system operating and providing the reliability at that level, you’ve got the same problem you’re going to have on the distribution level. Fortunately, the planning process that we participate in PJM [Interconnection] is fairly specific about what projects should get built.”
He said there are few assets that are more difficult to build than transmission, adding, “It’s much more difficult to build a big transmission line, as we found out as we were working on the Mid-Atlantic Power Pathway.”
He also noted that Pepco is working on addressing reliability challenges after facing stakeholder criticism.
“We’ve dramatically stepped up the level of investment,” he said. “The improvements are pretty dramatic, we’re not done yet and I’m not satisfied yet, but the progress we’ve made gives me a lot of confidence and the reaction from our customers are more and more positive. [W]hen you have kind of the problem we had, it will take some time to work your way out of that, but we’re going to get there.”
During the panel presentation, he said that when considering investments, he does not factor in only reliability, but other issues as well, such as job creation. “I look at it in the sense of what we would be willing to pay for an iPad or an iPhone, or even a cup of Starbucks, relative to the value of electricity,” he said, adding that the industry must do a better job of helping the public understand that in terms of their priorities, the value of electricity is pretty high.
“What we can’t do is not make the investment,” he said, noting that the industry should look at innovative approaches that provide utilities with a path to recovery, while being mindful of the end impact on customers.
Lori Murphy Lee, commissioner with the District of Columbia Public Service Commission (PSC), said during the panel discussion that consumers want to be listened to, not just have something explained to them.
Energy education needs to be improved, she said, noting that teaching consumers about the smart grid is the next step. “[W]e have to ensure that customers feel empowered, that they have choices and that they understand what their options are,” she said.
Lee said the city council of the District of Columbia enacted smart meters and thus, the PSC did not have the option to consider an opt-out measure for customers.
Looking at the big picture of opting out, she noted, “[Y]ou want to be able to recover the investment that was made in the smart meters and to be able to properly recover that investment, large numbers of customers opting out is problematic.”
A large base of customers opting out would undermine such investment, she said, adding, “We know that smart grid [and] smart meters are here to stay, so we don’t want to see that, but certainly, customers want options and we want to give them options.”
Rigby said it is important to have dialogue with customers on such issues as opting out. “[O]nce you sit down and have a conversation with individuals, you can walk them through that situation,” he said. He noted that Pepco has essentially completed deploying smart meters in Delaware and that of 300,000 electric customers, four customers have refused the meter.
Also speaking on the panel, Mignon Clyburn, commissioner with the Federal Communications Commission, said that kind of interaction affirms how the utility’s relationship is changing with consumers.
“There are fewer … frictions between the people that we serve and the utilities … when there is that enhanced dialogue,” she said.
When utilities’ public relations departments, for instance, discuss with the public the consequences if a utility does not move in a certain direction, “then you will have not necessarily 100% buy-in, but a more enhanced understanding of the direction in which you’re heading,” she said.
Among other things, Rigby noted that Pepco has recently trained a new group of employees called energy advisors, whose interactions with customers involve how to better manage energy use. “We need to step our game up to be able to not just resolve problems, but to have that information exchange,” he said.