Peoples Energy Analytics shines a light on consumers in need of bill assistance
Destenie Nock knows what it’s like to struggle with the high cost of energy. When she was in grad school, her electricity got cut off because she couldn’t afford to pay the bills.
At the time, she was pursuing her doctorate in engineering with a focus on the power sector at the University of Massachusetts Amherst. She knew many others struggled to pay their utility bills, and she wanted to find solutions. So years later, after joining the engineering faculty at Carnegie Mellon University, she launched Peoples Energy Analytics –a startup working to improve how utilities connect with customers in need of bill assistance.
This week on With Great Power, Dr. Nock describes the research behind Peoples Energy Analytics’ products and how Peoples Natural Gas is piloting them. She also shares why she thinks government programs for bill assistance are so important — and why she worries about the outlook for future funding.
With Great Power is a co-production of GridX and Latitude Studios.
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Credits: Hosted by Brad Langley. Produced by Erin Hardick and Mary Catherine O’Connor. Edited by Anne Bailey. Original music and engineering by Sean Marquand. Stephen Lacey is executive editor. Sean Marquand composed the original theme song and mixed the show. The GridX production team includes Jenni Barber, Samantha McCabe, and Brad Langley.
Brad Langley: Back in 2018, Destenie Nock was in grad school in Amherst, Massachusetts. She was living in an apartment with two roommates and to save money, even though it was winter, they decided to keep the thermostat at 56 degrees. It was the kind of penny pinching move a lot of students can relate to. But in Destenie's case, it wasn't enough.
Destenie Nock: We got our lights cut off because we just didn't pay our electricity bill for three months because we were paying our oil heating bill.
Brad Langley: At the time, Destenie was working towards her PhD in industrial engineering and operations research. So having her electricity cut off was a bit of a wake up call.
Destenie Nock: I was studying the energy system. I had a degree in electrical engineering, and I could not pay my bills. And I was like, wow, knowledge is power, but it's also not enough, right? We need solutions that work.
Brad Langley: So Destenie set out to find those solutions. In 2019, she headed to Carnegie Mellon's College of Engineering, where she worked her way from postdoc to assistant professor. And then in 2022, building on research she'd done with the University of Maryland and an Arizona utility called Salt River Project, she created something called the Energy Equity Gap.
Destenie Nock: That is a measure of whether or not someone can be safe or comfortable in their home and how far away they are from being able to do that. So what we found in Arizona was that systematically across the years, low income groups were waiting four to seven degrees longer than high income groups just to start using their air conditioning systems. So that would mean the energy equity gap is seven degrees Fahrenheit.
Brad Langley: From there, Destenie applied the same analytics to large data sets from utilities across the country. We're talking millions of homes. And she quickly realized she could create a company that would combine her passions for energy affordability and energy justice. So later in 2022, she launched Peoples Energy Analytics. The goal? To help utilities identify and provide assistance to customers who, based on their energy usage, were likely struggling to pay their bills and maybe even struggling to survive.
Destenie Nock: We know that there are many people that die every year due to heat. They get a heat stroke; they might get dehydrated; they fall; they bump their head. It happens a lot.
Brad Langley: Sometimes people live with unhealthy levels of heat simply because they don't have AC. But that isn't always the case.
Destenie Nock: And there was a study in Arizona where they found people had turned off their working air conditioners in order to save money on their bills. And so we do know that this issue does drive people to make really tough decisions and put themselves and their families at risk
Brad Langley: By analyzing energy user data, Peoples Energy Analytics works with investor-owned utilities and co-ops to identify customers living in the energy equity gap.
Destenie Nock: We want to find the people that are struggling with different types of inequity. So who doesn't have air conditioners? Who has broken heating systems? Who's not using their heating systems? Who has high bills? We find all those people. Then we will do targeted marketing to get people signed up to the thing that would make the biggest difference.
Brad Langley: Like finding the best assistance programs for their specific needs. But how they message customers is also important. She says it's got to be an empathetic approach.
Destenie Nock: At the end of the day, nobody ever wants to admit that they are struggling. We make it really difficult to tell people that, hey, I'm going through a rough time right now. I am poor. Nobody wants to say that. I know I didn't want to say it when I was in grad school. It took my lights getting cut off before I asked my dad for help. Sometimes we're just so stuck in this hamster wheel that it's hard to see what's going on, and that's why really zoning in on those types of inequities and how different starting points with energy will require different solutions is really what I hope that we can do.
Brad Langley: This is with Great Power, a show about the people building the future grid, today. I'm Brad Langley. Some people say utilities are slow to change, that they don't innovate fast enough. And while it might not always seem like the most cutting edge industry, there are lots of really smart people working really hard to make the grid cleaner, more reliable, and customer centric. Today, my guest is Dr. Destenie Nock, the CEO of Peoples Energy Analytics. She's also the assistant professor of engineering and public policy and civil and environmental engineering at Carnegie Mellon University. We talk about the mission of Peoples Energy Analytics, their first pilot program, and the outlook around federal funding cuts to assistance programs. But first I asked Destenie why she launched Peoples Energy Analytics as a for-profit company.
Destenie Nock: So in terms of a for-profit startup, I do believe that helping people pay their energy bills is good for business. I wanted to ensure that if people were going to implement the social justice metrics that I created, it was because they truly believed in the mission and it being good for business. We really had to work at like, here's the cost reduction of finding these people. Here is the amount of late bill payments, aka arrears, that we can reduce. Here's the number of disconnections that we expect to reduce, and this is really good from a minimizing bad debt standpoint. In the utility, you value what you pay for. And to me, that's just a fact, right? People don't value free things. And when people kept asking me to implement these algorithms and their software for free, that was when I realized it was going to lead to more social washing because I was not at the table. I was not talking to decision makers. And there wasn't a plan for how they were going to use this information to take it down to the household. So then once we said, no, we're a for-profit company, if you want to work with us, you're going to have to pay us something, we found great innovative utility partners.
Brad Langley: So I want to dig into that Peoples pilot project a little bit more. But before I do, what is your vision for Peoples Energy Analytics? What is the solution you offer specifically and who are your customers for your products and programs?
Destenie Nock: So my vision for Peoples Energy Analytics is that we are going to find the 25 million Americans that struggle to pay their energy bills every year and connect them to assistance and also help utilities design programs to reduce the number of late bill payments or arrears in their areas and just make sure everybody can afford to be safe and comfortable in their home. So we target both investor-owned utilities as well as rural co-ops, and really anybody with monthly or daily energy consumption data is who we work with. Now, our product offering is centered around phase one typically is a data analytics offering. So we will deploy different algorithms in the utility territory to identify different risk profiles and accounts. So these risk profiles can be pipe freeze risk, heat stroke risk, high bills, disconnection risk, and we have a predictive analytics tool around that.
And then in phase two, that will be around two different options. So one will be on understanding how rates and rate changes will impact different customer bases. So that's going to be looking at who might face hardships with paying, if the rate increases a certain amount and under different bill programs, who else might be impacted from there. We can also look at infrastructure deployments and understand how different customer classes are going to be impacted. On the other side, from more of a deployment standpoint, we will work with the electric and gas utilities to actually get people signed up to assistance. So that would be more on the targeted marketing. We work with their marketing teams to deploy in-app messages, email messages that are designed to specifically get these different risk profiles signed up to bill assistance, LIHEAP, weatherization programs, et cetera. And then we will track that enrollment.
Brad Langley: Would love to dig in a little bit more on what you all are doing with Peoples Natural Gas in Pennsylvania. Talk about how that pilot program came to be and what was Peoples Natural Gas trying to solve for?
Destenie Nock: It's funny because our names are similar, but we have no affiliation outside of working together, but they are our first customer. It really came about from a Pennsylvania energy summit that we had here in Pittsburgh, I want to say 2023, where I was speaking about how can we use data analytics to improve the lives of customers in the region. And during that meeting, somebody had asked me, do I only work with the electric industry and should we really just be focused on the phase out of natural gas? And my response to them was that I work with all energy industries. I do not think that it is right to penalize our renter populations that are going to be the ones stuck in older homes. They don't have the capabilities of changing heat in their homes, and all of our energy providers do provide essential surfaces to make sure people can just heat their homes, not have their pipes freeze, et cetera.
So following that, I actually got an email from the CEO of Peoples Gas, and he invited me to go to lunch, and I was really surprised that a CEO reached out to this professor with a brand new company. And he said that he liked that my focus was on the household because he felt that sometimes gas companies get a bad rep. And he said that I was one of the few people that spoke that day that was technology agnostic and that I was truly focused on the household. So that was something where I felt really, I just felt like, wow, somebody really heard that part because sometimes in my electrification industry talks, that doesn't necessarily get received well.
Brad Langley: Are you able to get into some of the mechanics of how this pilot project launched?
Destenie Nock: When I was talking with the team at Peoples Gas, they had actually said, hey, we've paid to do these data analytics in the past, but they found the wrong people, and so we want to know that you will help us get to the right people and that you'll actually help those people once we find them. And to me, I was like, wow, that is a really interesting perspective, that they want to be innovative, but they don't want to stop at the data analytics. Getting people signed up is the hard part. And so that's when we actually expanded our offering to include the targeted marketing there and to track enrollment.
Brad Langley: What was the workflow to make this real?
Destenie Nock: The workflow to make it real… I mean, we had to go through our cybersecurity protocols to ensure that we are going to be able to protect customers’ information. Then we needed to get the natural gas data from households across the region, and then we're going to find the risk profiles, and then based on those risk profiles, we're going to have different algorithms for what type of messaging that they'll receive. So in terms of the runway, I mean it was really like each time we deploy our messaging, we do meet as an entire team both on the Peoples Natural Gas side and the Peoples energy analytics side. And then we will talk about what was successful, how is the marketing and messaging going to change, and how are we going to attract success moving forward?
Brad Langley: So what kind of metrics or benefits, either financial or in terms of customer service are you guys anticipating or tracking against?
Destenie Nock: So in terms of the benefits, we are tracking how many people are actually signed up to these assistance programs. That's what we're trying to influence. So once we deploy our messaging to them, then we will actually track how many people are getting signed up at each stage? How many people submitted an application? How many people open the email, right? Then from the email they submit the application. Then did they qualify from their income? And then did they sign up and start receiving it?
Brad Langley: And do you have any early pilot results to share or is that forthcoming?
Destenie Nock: We are seeing really good click open rates. So in terms of targeted marketing and messaging versus broader, we are seeing roughly a 17 to 20% open rate of our messages compared to, I believe a 12 to 15% of just broader messages. So we're already seeing a higher level of open rate in terms of our messaging. We are projecting that we would see, I want to say roughly 25% increase in applications just from our targeted messaging. Now those are still yet to be seen because we're still in the winter season, so we haven't seen how many people sent in applications after that deep cold snap. So through the month of February, we're projecting to see a lot more because that's when the bills are going to hit pretty hard.
Brad Langley: That's great. Talk about the messaging personalization a little bit. What different kinds of messaging are you guys putting out there? Is it mainly cost-based in terms of here's what you can save? Is it more benefit based? How do you determine what people get? What messages specifically?
Destenie Nock: So if they're somebody who we identify as spending a lot of money on their bills, then it is going to be more cost-based. But if it's somebody who we are identifying as having a pipe freeze risk and they're working really hard to save money on their bills, that's going to be more of a, are you wearing too many blankets in your home? And then we will go through a little bit more information about potentially how many people they're being compared against: 25% of your neighbors are warmer than you in your home. Would you like to sign up for this program that can help you and your family be warmer?
Brad Langley: You mentioned earlier there's a certain stigma that keeps consumers signing up for these kinds of programs. Is that the main reason they don't take advantage of them? Are there other things that you've seen that prevent folks from participating in these kinds of efforts that can really be beneficial to them? Or is it just mainly the stigma piece?
Destenie Nock: I think some of it is the stigma. I really do feel like nobody wants to admit that they're poor or that they're struggling. The other thing that we have found is that people sometimes mistakenly believe that these are loans that they'll have to pay back. People are very risk averse to loans. Other times people have told me that they believe that if they take the money, then somebody else who really needs it won't get the money. But then it's about really showing them like, no, the more people that sign up for these assistance programs, the easier it is for advocates to go to government organizations and utilities and advocate for needing more money. And then I think lastly, a big thing is that these applications can be very long, a little bit confusing, and sometimes people don't realize that they can apply to multiple programs at the same time. But really the time it takes to apply I do think is a detriment. And the other thing that we're seeing is sometimes the benefit that these households can get is not communicated to them. So it's like, hey, you can save money on your bill if you put in your information into this program. The question that a lot of people have is, well, how much money? And that is not on there.
Brad Langley: For listeners who don't work in payment programs, can you describe the Low Income Housing Energy Assistance Program, which is also known as LIHEAP?
Destenie Nock: Yeah, so the Low Income Housing Energy Assistance Program is a program that is typically deployed through federal funds. Now, these federal funds do translate down to the states. They will tend to then distribute it across the utilities. So technically, the U.S. Department of Health and Human Services is the one that sets the guidelines for LIHEAP funding, right? But those guidelines can be modified by the states. Now, federal guidance recommends that the LIHEAP funds go to families with an income that does not exceed 150% of the federal poverty line, but states do have some leeway in that, and the LIHEAP program was designed to help families in need with their energy bills and with efficiency upgrades, and it does provide essential relief to millions of families across the country. So LIHEAP has early season applications where you can just apply to get some money to help you pay your bills, but they also have their emergency funds where if you are in disconnection, you can apply for relief where you would not get disconnected.
Brad Langley: Is there concern that LIHEAP's federal funding might be under threat?
Destenie Nock: Yes. I think anything with low income in the name is under threat. Also, I mean, historically, the states for LIHEAP have been underfunded. I think in 2021 RMI found that LIHEAP would need to increase their funding by 10 to 20% to cover energy costs of all eligible low income families. And so now with this program, and I think broadly, all DEI, low income support, social justice support, all of that coming under fire by the federal government, to me, it is really upsetting because people are already struggling. Making it harder for people to pay their energy bills benefits nobody.
Brad Langley: Last question for you. It's a bit of a fun one. We call this show With Great Power, which is a nod to the energy industry, and it's also a famous Spider-Man quote: “With great power comes great responsibility.” Based on this conversation, I sense you might have lots of superpowers, but what would you say is your primary superpower that you bring to the energy transition?
Destenie Nock: I would say that maybe my primary superpower is being focused on seeing the world as I think it should be, and not getting bogged down with how the world is. I don't get hung up on technicalities until I'm knee deep in the mud, and we're trying to get ourselves out of it. I think that that also allows me to talk across industries more and to really just be focused on the solutions.
Brad Langley: Dr. Nock, well, thank you so much for coming on the show and sharing more about the very important work that you're doing. I really appreciate it.
Destenie Nock: Yeah, and thank you for having me.
Brad Langley: Dr. Destenie Nock is the CEO of Peoples Energy Analytics and an assistant professor at Carnegie Mellon. With Great Power is produced by GridX in partnership with Latitude Studios. Delivering on the clean energy future is complex. GridX exists to simplify the journey. GridX is the enterprise rate platform that modern utilities rely on to usher in our clean energy future. We design and implement emerging rate structures, and we increase consumer investment in clean energy, all while managing the complex billing needs of a distributed grid.
Our production team includes Erin Hardick and Mary Catherine O'Connor. Anne Bailey is our senior editor. Steven Lacey is our executive editor. Sean Marquand composed the original theme song and mixed the show. The GridX production team includes Jenni Barber, Samantha McCabe, and me, Brad Langley. If this show is providing value for you, and we really hope it is, we'd love it if you could help us spread the word. You can rate or review us on Apple on Spotify, or you can share a link with a friend, colleague, or the energy nerd in your life. As always, thanks for listening. I'm Brad Langley.