3 Ways Utilities Can Shape the ‘New Normal’ in 2021
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- Jan 18, 2021 9:53 pm GMTJan 18, 2021 3:30 pm GMT
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2021 is proving to bring uncertainty and disruption, but with those come the potential for growth and new beginnings. Americans are inching closer to a post-coronavirus reality, while President-elect Biden promises to move the country toward a zero carbon future. What that means for utilities is that there are opportunities to shape whatever ‘the new normal’ of American life could be and, simultaneously, help energy customers thrive.
Facilitating EV Infrastructure Expansion
The federal government will make major electric vehicle investments in 2021 and beyond, which will allow for hundreds of thousands of new public charging stations to be installed across the US. We expect a large portion of that infrastructure to be focused on rural areas, like highway gas stations. In addition, as legislation for new construction requires EV infrastructure accommodations, we anticipate EV outlet installation will be centered around multi-tenant residential complexes, especially in densely populated, urban areas.
The Biden administration says it will fund US-based battery manufacturers in order to spur production, and that it will fund domestic automakers so they can produce more electric cars. Further, he’ll lower fuel economy standards and issue more tax rebates, credits and other incentives for the purchase of EVs. Meanwhile, EV battery life is improving, thanks to tech firms and years of research. And manufacturers are now producing EV models that are more affordable to the average consumer.
All of this means that, with more charging outlets available and longer battery life on the horizon, range anxiety will begin to dwindle. Increased EV affordability means that drivers will be more willing to trade in old cars this year, and fleet managers could become more open to switching vans, buses and trucks to battery power.
Given this, electric utilities should build partnerships now to facilitate the coming spike in EV adoption, and they can begin by offering make-ready infrastructure enhancements to adequately prepare different sites for EV. This includes grid enhancements and site upgrades that will allow charging infrastructure installations to be possible.
Where to do this work, and with whom?
Look to collaborate with gas station owners and convenience store operators who are willing to install charging; casual dining establishments and other commercial businesses at points along major highways, especially those eager to showcase their desire to lead innovation. Also engage property developers or owners of multi-unit residential complexes, who have the investment capacity to accommodate forward-thinking tenants, or are required by law to include charging equipment onsite.
Adapt and Pivot with Energy Efficiency
Public interest in reducing energy consumption has grown in recent years due to climate concerns and energy costs. In addition, because of continued COVID-19 business and school closures, 1 in 4 Americans are working remotely this year, according to Upwork’s recent survey, and millions of K-12 and college students continue to attend virtual classes. Homeowners’ energy bills have, therefore, increased through the pandemic. Our research shows that Americans are currently billions of dollars behind on payments to water, electric, natural gas and other utilities.
However, according to EnergySage.com, “The U.S. The Department of Energy estimates that the typical household can save 25% on utility bills with energy efficiency measures, which amounts to over $2,200 annually.”
That’s $2,200 American families could sure use right now. People across income brackets are looking for ways to cut back on energy consumption and lower their utility bills now, so they’re considering energy efficiency like never before.
To compound the situation, appliance manufacturing and supply chains could see a disruption. According to a recent study from ACEEE (the American Council for an Energy Efficient Economy), regular appliance standards were not reviewed, per legislation, throughout the Trump presidency. This could mean that, under the Biden administration, appliance standards will be revised and, potentially, become more stringent. In other words, to help the US reach its zero carbon goals, ceiling fans, space heaters and the like will need to operate more efficiently in the days ahead.
As such, utilities will need to find new ways to make up for revenue that will be lost from a reduction in energy usage. We’ve seen utilities save millions of dollars by targeting customers and enrolling them into cost-cutting programs like paperless statements and direct debit, and by carrying out campaigns that boost enrollment in payment programs like government-funded assistance and budget billing.
They can also win through the expansion of beneficial electrification. While the grid becomes more efficient, more products and appliances are switching to electric power, prompting consumers to purchase and use them more often. For instance, homeowners are trading older gas furnaces and water heaters for electric ones with higher energy efficiency ratings. This is creating an opportunity for electric utilities to make sure they’re taking part in facilitating this shift rather than resisting it.
Utilities can begin engaging customers who have the financial means, interest and capacity to adopt these kinds of energy transitions now and in the future. Guiding folks along a customer journey that puts energy efficiency at the center makes reduced energy consumption an opportunity rather than a drawback for you.
Embracing Artificial Intelligence
As mentioned above, there are a lot of ways utilities can cut costs and unearth new streams of revenue that are being lost to ‘the old ways’ of doing things. Throughout 2020 and, as we’re seeing already in 2021, utilities have embraced artificial intelligence--some, more than others--to help them do this faster and more efficiently than ever before. In the coming year, we expect more utilities to explore, and use to their advantage, the potential of A.I.
What does A.I. look like as it pertains to the energy sector? Fewer siloes, orchestrated revenue operations and higher revenue, to begin with.
Utilities that have embraced A.I. are proving that IT, Collections, Sales, Marketing, Customer Service and other business teams can effectively work alongside one another to coalesce their company data.
They’re unifying data on customers’ energy usage, payment patterns, program enrollment, call center or website engagement, and more, and putting it into one place that everyone can access. As a result, they’re deriving deeper, more meaningful insights, asking more relevant questions that drive strategies, and uncovering new opportunities for growth.
Further, utilities are enriching their existing, internal data with demographic and psychographic information from third-party data providers. This data includes anything from social media behavior to consumer buying habits and more, revealing a rich, colorful picture of a utility’s customers.
Machine learning technology is then being applied to this enriched data, generating predictive models that utilities are using to better understand, precisely target and positively engage customers at the household level.
This process may sound very futuristic, but it’s already happening, and the utilities using predictive A.I. are seeing fast, staggering results, like:
Millions of dollars in overdue payments collected over the course of a week after sending one email to the customers with the highest likelihood to pay;
Record numbers of electric vehicle rebates cashed in after running one ad through the most effective channel;
Assistance program enrollment jumping (and service terminations drastically dropping) after making targeted phone calls to households falling behind on their bills.
These single initiatives have shaped the energy customer experience, helped to drive technology adoption and kept people safe, even in the midst of a global pandemic. Reaching this level of data maturity doesn’t happen overnight, of course, but it also doesn’t take five or ten years to achieve, like some analysts project. Conversely, achieving data maturity is an ongoing process, one that doesn't need to be complete in order to derive results.
As this reality sinks in, we anticipate more utilities to begin testing artificial intelligence, incrementally, to guide their own initiatives. And those on the leading edge will continue to leverage it, recovering from the challenges of 2020 and making major gains in the coming year.