Tuesday, November 14, 2023
3:30 PM - 5:00 PM
To Save Money or Avoid Overspending? The Impact of Gain vs. Loss Framing on TOU Rate Comprehension
Session ID
A6 - Lightning: Segmentation and Targeted Messaging
Social Science Insights
Sophie Sheeline

Utility customers struggle to understand, and act on, time-of-use (TOU) rates. Opower's TOU Rate Coach product – which serves 1.5 million utility customers weekly – enhances TOU rate outcomes by increasing rate comprehension, motivation to shift load, and understanding of how to do so. To improve product outcomes further, we investigated the impact of loss framing versus gain framing within TOU Rate Coach on customer comprehension of TOU rates and motivation to shift load. For the study, two variations of the report were created — loss framing (eg. "On-peak hours are from 4PM – 7PM. Electricity is 1.5x more expensive during this time.") and gain framing (eg. "You can save money by shifting your electricity use to off-peak hours (10AM – 3PM). Electricity costs 27% less during this time!") — which were randomly assigned to be viewed by over 600 online panelists, and followed up with questions. Respondents with the loss framing condition were almost twice as likely to correctly recall the on-peak period start and end times relative to those in the gain framing condition. While the latter were significantly more likely to recall off-peak hours relative to those who received loss framing, the magnitude of the effect was 5x smaller than the on-peak recall difference. Moreover, there were no significant differences in participant-reported likelihood to shift load away from the most expensive hours or towards the least expensive hours, or customer sentiment regarding the report. The results suggest that loss framing may be more effective than gain framing in driving overall comprehension of TOU rate plans, without reducing customer satisfaction or motivation to shift. These findings have practical implications for developing effective communication strategies that can increase utility customer awareness and understanding of TOU rates, which is imperative to reducing peak load on the grid and harnessing the full potential of TOU rate design.

Supporting Document 1