OPOWER Helping Utilities Educate Customers About Energy Usage

Posted on February 16th, 2011 by
   

Ogi Kavazovic, of OPOWER, discusses how OPOWER is helping utilities educate their customers about ways to curb energy consumption.

Full Transcription:

Ben Lack I’m here with Ogi Kavazovic of OPOWER. Thanks a lot for being with us.
Ogi Kavazovic It’s great to be here.
Ben Lack Tell us a little bit about OPOWER.
Ogi Kavazovic Well, we’re really trying to make energy efficiency cool. One of the things happening in the industry right now is people are trying to really save energy, and trying to make the country more efficient. But you can’t really do it unless people get engaged about it. And energy data and energy efficiency is really not that interesting for a lot of people. At one level, we’re really trying to change that way. We’re really trying to help utilities reach out to their customers and help them see that by leading a more efficient lifestyle they can save money, they can save the environment, and then, they can actually feel good about it. A lot of people just like to save for the sake of saving and bragging about actually living in efficient lifestyles. We work with utilities to really help them engage their customers and save a lot of energy across the country.
Ben Lack So, how does that engagement actually happen? I mean, most people are just so used to receiving the bill and paying the bill and calling it a day.
Ogi Kavazovic Right.
Ben Lack How are you changing that paradigm?
Ogi Kavazovic In fact, most people’s interaction with the utility falls down to either none or calling them when you’re mad about your bill–
Ben Lack Sure.
Ogi Kavazovic … And asking them, “Why is my bill so high?” That’s, I think, between those two interactions, you got about 90% of all interactions that have.
Ben Lack Totally.
Ogi Kavazovic So it’s really is a bad place to start. We’re trying to change that. You mentioned the bill and we realized early on in the company that that is actually the perfect opportunity. Very few people go to utilities’ websites. I don’t know. If you think of it, when was the last time you went to a utility’s website? Probably never.
Ben Lack Yes.
Ogi Kavazovic Me neither. And I work in this industry. And so we realize that in contrast of that, 98% of the people open the bill. And when you go through the mail you see utility, you’ll probably going to open it and try to pay so you’re not late, so you’re lights don’t turn off. And so, we built this product, it’s called the Home Energy Report that is essentially stuffed in an envelope that looks like a bill on behalf to utility. And everybody opens it. And instead of a bill, instead of sort of bad news, you get this colorful — I wish I actually had a copy to show it to you– a colorful two page Home Energy Report that tells you all these cool information. And one of the most popular things that we do is, for the first time, we actually give you a sense of how you’re doing. So if you think about it, you got a bill that says $100, $120, and, I don’t know, 80GW-h or 80kW-h. That doesn’t mean anything. It doesn’t, really, you have no idea whether it’s good, whether that’s bad. And so we found a way to explain that very simply to the customers and the ways to compare them to similar homes in their neighborhood.
Ben Lack So you need some sort of a rating or a grade?
Ogi Kavazovic Yes. You got what we call a neighbor comparison. So, we take an average of a hundred similar homes and we make sure that it’s a fair comparison, right? So, we do, we make sure that the square feet is about the same, it’s a similar neighborhood so it’s the same weather, similar number of people in the home, some of the demographic profile, right? And then we average about hundred homes that are like that in your bucket and we say, “Okay, so you’re doing about 20% more than what is normal for your home.” Or maybe you’re doing 20% less. If you’re doing less then you get a smile in your face that you’re doing well. If you’re doing more, then it really gets interesting. So we say, “Okay, you really have an opportunity to do better. In fact, you’re doing 30% more over-all and you maybe did about average but in the summer, you’re doing 30% more than what is normal.” And that, for the first time, is eye-opening. Most people’s response to that is “I have no idea.”, “I actually had no way of judging or gauging.” And so, once we alert them, once we sort of raise their awareness, we couple that with pragmatic suggestions on what you can do about it. And then that’s also, again, based on what we know about you, about your house. So, if you’re a single person and live in a one bedroom apartment renting, we’re not going to suggest that you insulate, re-insulate the house. You’re never going to do that. It’s a rent place. We’re going to tell you to lower your thermostat by one degree because the temperature they’re using is way too low than what you really need and just one degree difference can make a huge difference. And so on. We can tell you to replace your light bulbs, maybe. Or we can tell you to change your filter in the AC a little bit more often– low cost things that everybody can do. And we do this on a very large scale. So we send millions of these reports out and every single one is completely different. It all depends on who you are, what your energy pattern has been, who you are as a person. So it actually makes sense and engages people.
Ben Lack So the secret sauce is really your recommendation because everybody is different.
Ogi Kavazovic Absolutely. It’s content targeting combined with and recommendations is a big part of it. But it’s, really, the whole report is for you. We have such a small window because, again, I’m going back to people who don’t care. So, you have such a small window i.e., window opening the bill to actually give them something that they will pay attention to. And, if they read it and they realize this is not for me, this is a mass mailer, you will lose them in that sense. They’ll never really pay attention again. So we really… the software that we do is really the complexity of everything we do is hidden. It’s all in the background. We do a lot of algorithm, a lot of calculations to figure out exactly what our best guess, you can never know for sure, but some best guess are what would be meaningful to that customer; intrusive information and also what would be motivating to that customer. And then we manifest that in a report. We also have a web portal for those who are interested. We’re now sending emails and text messages, as well. So, we just use all the traditional channels to give people information that actually makes sense to them.
Ben Lack Yes and the service, all things considered for the customer is free.
Ogi Kavazovic It’s free, yes. It’s part of, in all of our bills, whether we realize it or not with the utility, we put in a small surcharge already and it’s been like that for decades. It’s going to continue on for decades to help the energy be, you know, run this energy efficiency programs. And the traditional program is stuff like installation, retrofitting something. But now we’re doing this program that’s actually interesting and fun for the customer as well as information base. We don’t make your bill go up. It’s about to be the same but you’re getting a much better service.
Ben Lack And how are you… obviously the consumption data is barely easy to  [00:06:18 unclear word] because the utilities are already–
Ogi Kavazovic Yes, we work with the utility. Without this… our motto is very utility centric. We act as an agent in behalf of the utility. So, if we’re working with your utility, hopefully, you will notice because all of a sudden the communication will still go between the utility and you. You get it from the utility. Or look like at least it’s coming from the utility. But you should notice a sort of a pretty significant improvement on the type of communication.  The bill is much more comprehensible. The website is cool. You have all these new channels and better information that you feel “Oh, wow, I can actually do something about this and save money.”
Ben Lack How do you collect the data that’s not necessarily the consumption, the square footage, the number of people who live in the house?
Ogi Kavazovic Yes, it’s kind of a pain. And it’s one of the things that we offer in this industry. There’s tax assessor’s office data, that’s publicly available. There’s a bunch of third party that send demographic information. There’s weather data that we collect. And there’s also data directly from the user we call “user generated content. So if you come on-line and you tell us “Hey, I have three people living in this house.” We’ll take that into consideration. And so, a big part of the challenge is how do you take all these data streams and marry them into one customer profile that makes sense. There are all these discrepancies and that’s what we do in behalf of utilities. And then once the data is married and validated then we can do analytics on it and do these cool things.
Ben Lack Cool. It sounds like it’s a really cool concept. I have a one final question for you. This is more personal than anything. Why are you doing what you’re doing?
Ogi Kavazovic You know I didn’t talk about the results. At the end of the day, I talked about helping utilities to reach their customers. But the results that we’re having as a result of this are so exciting. Just to give you a sense, we can send these reports and emails, and et cetera to millions of houses very easily across the continent. For every million homes that we send reports to, we effectively save enough energy starting six, eight weeks later. So, it’s almost immediate. We start saving enough energy to take 30,000 of those homes completely off the grid. And then we can just sit and we’re going to scale that up so we’ll soon be ten million homes. You can do the math. That’s a city of a million people off the grid. So, we’re a double bottom line company. As everybody else, we try to make money but we also, in everything we do, we all got into this to actually help the environment. We’re actually having a huge impact as a company and that’s really what’s driving us.
Ben Lack And driving you personally?
Ogi Kavazovic Absolutely. I mean, I talk about us because we really are a team but the reason I joined the company is I saw an opportunity relatively early on in my career to have an impact, to have a positive impact in the world. Something that’s not just aspirational but measured and happening today and on a very large scale. It’s too exciting.
Ben Lack Well, thanks.
Ogi Kavazovic Yes. Thanks for your interest.
Ben Lack Take care.

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