Posts tagged “GreenOrder”
By Sam Shrank and Raphael Tehranian
Utilities find themselves in unfamiliar positions as they chart their course in areas such as alternative fuel vehicles, smart grid, and distributed generation. In this last piece of our four-part series (See Part I by Mat McDermid, Finding the Regulated Utility Role in a Shifting Energy Landscape; Part II by Sam Shrank, How Behavioral Science Can Increase Energy Efficiency Adoption; and Part III by Jill Bunting and Raphael Tehranian, How Utilities Can Better Source Innovation), we discuss how partnerships with individual large customers to test new offerings, alongside traditional pilots, can help utilities find solid ground. Partnerships can both demonstrate to regulators that customers benefit from utility involvement in these areas and help utilities scope their ideal role.
Utilities have a long and successful track record of using technology demonstration pilots to better understand new innovations, test their ability to solve problems, provide increased or new benefits, and gauge customer and stakeholder interest. In a changing business environment, however, expanding into more customer-centric pilots would greatly help utilities position themselves to protect and expand their market standing.
Customer-centric energy partnerships of this type cover a broad spectrum, but there are a few required elements. First, they must begin with the selection of a customer partner, not a technology or utility offering. Second, the customer’s goals should determine the expanded or new offering, or most likely suite of offerings, included. Third, rather than lasting for a predetermined and usually short amount of time, they are meant to be merely the beginning of an ongoing relationship.
By Jill Bunting and Raphael Tehranian
The speed of innovation outside the walls of utilities outstrips the speed of innovation within. As new and disruptive vendors, technologies, and business models enter the market, many utilities have seemed unsure about what their role is or should be. In the third in our four-part series (See Part I by Mat McDermid, Finding the Regulated Utility Role in a Shifting Energy Landscape; and Part II by Sam Shrank, How Behavioral Science Can Increase Energy Efficiency Adoption), we discuss how utilities can and should leverage their unique position to accelerate and manage the deployment of innovations for the benefits of all customers.
Here are three roles utilities can play to better manage innovation in a changing market.
The ambassador: help customers understand the benefits of new innovations
Technology advancements are broadening customer access to a wide range of new energy services. But technology alone is never enough: customers must feel comfortable incorporating these advancements into their daily lives. Utilities are well-suited to providing customers with answers on a wide range of energy services and moving them up the adoption curve. They have already achieved significant success in areas such as energy efficiency, where the average cost per kWh saved through utility energy efficiency programs is just 2.5 cents. Areas such as electric vehicles are opportunities for utilities to build on this success as ambassadors for new energy services.
By Sam Shrank/GreenOrder
Utility operations are being forced to evolve as customer expectations shift, technological change continues and new players enter adjacent markets. As utilities chart their course in areas such as energy efficiency, smart grid, and distributed generation, they find themselves in unfamiliar positions. The second in our four-part series (See Part I by my colleague, Mat McDermid, Finding the Regulated Utility Role in a Shifting Energy Landscape), we discuss how utilities can leverage behavioral science research as they expand into markets where they are not a monopoly and customers need to be convinced about the benefits of the products and services offered.
Since setting up auto-pay the day I moved into my apartment, I’ve given no thought to my utility bill. Given that my job is to analyze and advise utilities, I’d venture to say most people are no more engaged. However, with an evolving set of customer offerings—energy efficiency (EE), alternative fuel vehicles, demand response, and the like—many utilities are realizing that they may require better, different, or more communication. In short, they are discovering what it means to sell.
And not only are they beginning to market things customers may not feel they need, they now have competitors as well, particularly in the EE market. Various other entities are looking to advise large electricity and gas users about how to lower their bills and provide help with financing, sell devices directly to customers that increase automation and control, or take over the utility’s role as the provider of EE offerings funded through utility bill surcharges. All of these reduce both the direct benefit to utilities from performance incentives and the indirect benefits from higher customer satisfaction, improved regulatory relationships, and perceived leadership.