"CPS Energy is using behavioral science techniques, and some high-tech data analysis, in a new program that taps on deeply rooted psychological drives to reduce energy usage during peak times.
The pilot program will be rolled out to up to 100,000 customers this summer and uses data culled from the company’s new smart meters to influence consumer behavior. The strategy itself is relatively simple: showing customers their energy consumption compared with their neighbors and letting their competitive instincts do the rest.
“Plucking on their competitive spirit, you can get them to reduce their energy use, anywhere between 1 and 3 percent over the course of a year,” said Neel Gulhar, a senior director of product strategy at Oracle Utilities. CPS has contracted with the company to run the program.
Oracle Utilities draws on behavioral science techniques to motivate the change. The most-used technique, according to Gulhar, is called “normative comparison.”
“This is where you compare the energy use of a household to households that are like them,” he said, later adding, “Time and time again, we find that if you use these different behavioral science techniques, you can actually change behavior.”
Competition is a deeply rooted instinct in human nature, a biological trait that evolved along with the basic need for survival, social psychologist Sander van der Linden at Cambridge University wrote in Psychology Today.
The program taps on that drive to win by sending out reports through email that analyze a customer’s behavior and compare it with others in the program. It’s “a little bit of a gamification thing,” said CPS Chief Operating Officer Cris Eugster. The program wouldn’t have been possible without more granular data from the utility’s new smart meters, which transmit data remotely and eliminate the need for a meter reader to record it each month, said Rick Luna, senior manager of product development at CPS.
The goal is to persuade customers to reduce their use during high-demand days, and the utility projects that it can save about 11 megawatts of energy usage, Luna said. One megawatt can power roughly 200 Texas homes during peak usage, according to the Electric Reliability Council of Texas."