The Utility Gap: Overly complex rates -- and how to truly help consumers

My brain hurts! Why did I try
to read that tariff sheet?

This week's PG&E residential rate change announcements reinforces IMHO the single largest problem in the utility sector: The inability of most customers to figure out how they are charged for electricity, given the complexity in rates & tariff structures.  Case in point: a colleague in Santa Barbara probably still feels some residual mental anguish from asking me the seemingly innocuous question "so explain to me how a typical typical commercial building owner is charged for their electricity here". Let it not be said that I didn't warn him. :-) I'm not faulting PG&E or California in particular, as similar situations exist in many utilities across North America.

On one hand, we have utilities and regulators, working together (hopefully :-) to decide how to effectively allocate the cost of running a grid across their consumers.  Depending on the history of how the accounting policies were derived, one can wind up with a rather complicated method to attempt to describe how to charge customers. Throw in energy policy decisions (e.g. stimulate renewable generation, motivate action to reduce summer peaks, etc.), and tariff structures can have additional complexities tacked on by the time they are approved.

You meant your utility bill?
Oh, gee, sorry, wrong bill.

I often wonder if there's a correlation between an extremely (perhaps overly?) rigorous regulatory rate review process and very complex rate structures.  It's as though tariffs take on a life of their own, growing each year with additional features (read "complications"?) as both parties involved in designing them can't help but tweak them a bit further. Complexity breeds more complexity... and confusion.

On peak peak demand? Partial peak demand?
Off-peak consumption? How about
SPAM, SPAM, eggs, SPAM and SPAM?

So who feels the most frustration in this process?  The unwitting consumer, who receives a monthly bill, probably has no clue how it's calculated, feels certain the amount keeps rising yet simultaneously feels helpless to do anything about it.

Sure, the utility feels it's trying to engage the customer in an outreach program, where the goal is to educate the customer, but honestly, when's the last time those of us, even dealing with the commercial & industrial sector, really heard a consumer say "gee, I really wish someone would explain how my bill works".  Can't really say this has come up often in my experience.  What's more likely to hear is "gee, I really wish someone would explain what I could do to lower by bill".  Unfortunately, the utility is viewed as the hostile enemy, not the partner who sits between the regulator and the customer, trying to deliver services to the customer -- both electricity delivery, as well as energy efficiency.

Most consumers don't even realize the options that exist for them, particularly the scope of energy efficiency programs utilities truly want to offer to their consumers.  The gap lies in engaging customers in a simple enough way to understand their choices. Incidentally, PG&E has a breadth of energy efficiency programs, including a variety of demand response options (including OpenADR / "AutoDR" options, which REGEN offers to its commercial customers).

The question is: how can vendors and service providers bridge this gap to help utilities and consumers work together?  Simplify, simplify, simplify:

• Simplify a bill by translating it into terms a customer understands -- and by clearly articulating what they need to do in order to lower their bills
• Simplify energy efficiency programs so that customers easily understand what's expected of them and how to calculate financial benefits
• Simplify the engagement process so that customers can easily sign up and monitor their participation in energy efficiency programs.

Surely the utility sector isn't the only industry where this exists.  Any comments from those of you in other industries where this complexity overburdens customers?