In the past 18 months, Arlington [Va.)-based Opower has partnered with 21 utilities to incorporate neighbor comparisons into gas and electric bills. Based on the success of pilot programs in Sacramento and Washington state's Puget Sound area, Opower just added two high-profile clients to its roster in October: National Grid of Westborough, Mass., and Seattle City Light. About 1 million households currently receive the reports, which show them how much energy they are using vs. similar households in their neighborhood. (To establish "comparable neighbors," Opower looks at the square footage of the home, its type of heating system , whether there's a swimming pool, and so on.)

The result: Customers in the program have reduced annual energy usage by an average of 2.8 percent, or the equivalent of 280 kilowatt-hours per year. In its test with the Sacramento Municipal Utility District, the effect has been biggest in households that were the biggest energy hogs pre-Opower: They've reduced consumption by more than 6 percent on average.

'The Next Wave of Savings'

Opower's business plan is modeled on the work of psychologist Robert Cialdini, whose textbook Influence: The Psychology of Persuasion is a staple of college marketing courses. Most recently Cialdini ran studies in Arizona hotels to see if, using small placards, he could get guests to reuse their towels instead of having them washed daily. Posting signs that said reusing towels is good for the environment had a small impact on behavior. But when he changed the message to say that the majority of hotel guests reuse their towels, the number of people who did so went up 30 percent. [This is not just a boon for the environment, Cialdini says. The savings on labor, hot water, and detergent amounts to about 71 percent per room daily.] Cialdini, who is Opower's chief scientist, explains the phenomenon this way: "Simple information about what constitutes a good choice is rapidly, almost primitively, processed." (continued...)

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