Michiganders love summer. Surrounded by three of the five Great Lakes makes the state a superior place to spend the warmest months of the year. This year, Michiganders living in Consumers Energy service territory will have to change familiar summer habits or will pay the price on their next utility bill.
Consumers Energy collaborated with the Michigan Public Service Commission (MPSC) on a 2021 summer peak rate campaign. The campaign increases the price of electricity from .10 cents to .15 cents per kilowatt hour during peak hours of day; encouraging consumers to change daily habits with hopes of lowering electric consumption. Peak hours are from 2 p.m. to 7 p.m. from June 1 to September 30. The Michigan Public Service Commission is Michigan’s regulatory body for ensuring “safe, reliable, accessible energy and telecommunications services at reasonable rates.” The MPSC regulates rates of eight investor-owned utilities in Michigan.
A 2018 study on performance-based regulation by the MPSC, explains the need for performance-based shifts to meet increasing energy demand and new renewable energy requirements in Michigan. Michigan Public Act 341 requires electric utilities in Michigan to produce 15% of energy from renewable sources by 2021. New requirements by the state, combined with increased energy demand by consumers, has sparked creative new marketing campaigns from utilities such as Consumers Energy.
For Consumers Energy, the decision to adopt a Summer Peak Rate campaign made sense. It encourages a performance-based shift in consumer activity that in turn helps Consumer’s meet energy demand. Consumers Energy explains the summer peak rate will benefit their Clean Energy Plan. Unfortunately for Consumer’s Energy, customers have met the rate fluctuation with justified frustration. Complaints on social media say the company is trying to target the poor, sick and elderly through a 50% increase in rates during the hottest period of the day. While the PR campaign is unpopular, performance-based shifts in consumer use could be the new norm for utility consumers in Michigan.
How can a cooperative communicator learn from the Consumers Energy summer peak rate campaign in preparation for communicating rate changes? It’s not a simple answer. Rate increases are never met with positivity, but they are becoming a part of communications for many utilities. Communicating a rate change is never easy, but advanced planning will help.
The first lesson is summarized with communicating early and often. Consumers Energy has over 154,000 followers on Facebook, but rarely mentions the summer peak rate in their posts. The earliest post found regarding the rate increase is on April 16, less than two months before the five-cent rate increase began on June 1.
According to the National Rural Utilities Cooperative Finance Corporation, rate changes should be expressed in “consistent, factual messages.” Consumers Energy should have begun this campaign far in advance before the change took effect.
The second lesson learned is a rate increase provides an educational opportunity for utility customers. The National Rural Utilities Cooperative Finance Corporation suggests communications that relay who the rate change will affect, when it will begin, why the rate change is necessary and how members can benefit from the rate change.
In reference to Consumer’s Energy Summer Peak Rate, the utility focused on members behavior, rather than the benefit members receive from the rate change. If communicated effectively, it would be evident that Consumer’s Energy customers would be able to save money each month with the summer peak rate. Further communication should have shown the background behind the summer peak rate; and why it is necessary to Consumer’s Energy production. The best communication would have clearly shown customers that the rate change would only affect their energy bill by $2 per month if energy use was not shifted to non-peak hours.
Finally, Consumer’s Energy should have used a complete mix of channels to communicate their summer peak rate. While articles from Detroit News and MLive explain the Consumers Energy rate change; the company does little to educate members beyond their summer peak rate webpage. Consumers Energy may have had better feedback from customers if more investment had been made into the PR campaign surrounding the summer peak rate.
For electric cooperative communicators, the lessons are clear. Rate changes may be a reality in the next few years due to increasing demand for a larger renewable energy mix – so do not wait to communicate. Plan your communications campaigns in advance, use the rate change as an opportunity to educate members and use a complete channel mix in promotions. Rate changes may be difficult, but when handled correctly, the benefits to the utility and to the member can be communicated effectively.
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