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Who is the Utility Customer? The challenges in hitting the moving target

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Michael Smith's picture
Principal KLN Group

If you have been active in the North American utility IT/automation markets over the last 30+ years, chances are that you have subscribed to a publication, read a research report, or attended an...

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  • Jul 27, 2021 9:00 pm GMT
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This item is part of the Special Issue - 2021-07 - Utility Customer Care, click here for more

Today, utilities have more information about their customers then they have ever had. The advent of smart meters and the growing penetration of smart devices and connected distributed energy resources (DERs) have provided a wealth of data that has the potential to put utilities in a position to provide better serviced based on deeper, more granular insights about their customers. Examples of this include the installation of over 107 million smart meters in the US alone, as reported by the Institute for Electric Innovation, and Strategy Analytics reporting that smart thermostats have been installed in one in three US homes.

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But this availability of richer customer data is not all rainbows and ponies. Challenges in this new data-rich environment range from technological (data management, for instance) to socio-political (privacy and “big brother” concerns) to customer-centric (do they understand? do they care?). And let’s remember that these challenges are all residing in an industry that is historically risk-averse and has not had a great relationship with customers as compared to other services providers.

One thought on where the industry is and where it is heading, or needs to head, is to step back and try to answer, “who is the customer?” for the utility industry. Over the last three decades we have seen utilities go from having “ratepayers” to having “customers.” What a revelation!

Now is the time for utilities to make another leap and view and engage “customers” as “partners.” The word “partner” is used, and abused, quite a bit in technology markets. (My favorite example here is technology salespeople calling their customers “partners” when they really just went to sell them more software, solutions, etc. – that is not what a real partner does!) For utilities, however, making this shift to partnering with customers is not only a legitimate need, it will also soon be an operating imperative.

Consider the changes that are happening now and where they are headed: DER growth rates are accelerating; electric vehicles are becoming more commonplace; and grid-scale renewables are also growing. This all presents not only a radically different operating landscape for utilities, but also one where the needs, and indeed the role, of customers are also on a path that is starting to look radically different. Any customer that puts solar panels on their rooftop or plugs an EV into the socket in their garage is now an active participant in the grid. Utilities will need to partner with them, not only to maintain those valuable customer relationships, but also to maintain reliability of service.

So, what should utility leaders do to ensure that their customers can also be partners in the energy future? The first step is to be proactive. Every utility has different regulatory requirements, regional weather, and operating conditions, but the grand energy transition is happening, and utility leaders need to have some of the basic infrastructure in place to be prepared to maintain service reliability. An example of his might include getting started with a DER Management System (DERMS), even if it is just piloting one area (geographic, or class of customer) of your business.

Second, assess your customer data. Are you doing all you can to fully leverage the riches found in the troves of data you now have access to? Are you tailoring customer programs to meet their changing needs? Are you addressing different personas in a way that keeps the customers engaged? These considerations have been “nice to have” in the past, but are now imperatives as the competitive forces of DERs and choice become more readily available for customers very day.

Finally, it’s taking a good, hard look at your culture. On the one hand, the utility industry is actively messaging that we are “putting the customer in the center of all that we do.” This is great, but what does this mean? Does this include finding new ways to reach low-income customers? Making new offerings? Looking at customer operations, especially costly areas like a call center, as a “profit center, and not a “cost center?”

We are all lucky to be working in the utility industry at this moment. The challenges are many, but we are all part of redirecting a century-old business and ensuring that we take one of the biggest marvels of technology ever – the grid - into the next century. Let’s bring our customers along for the ride.

Michael Smith's picture
Thank Michael for the Post!
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Matt Chester's picture
Matt Chester on Jul 27, 2021

I love questioning what appear to be fundamentally obvious aspects of the industry, but you're right that the utility of today is so different from the history of where it came and we have to question what we assume if we want to be forward-looking. Reminds me of the cheesy Hyundai commercials, but I think your questions are a bit more thought-provoking and important!

Michael Smith's picture
Michael Smith on Jul 29, 2021

Yes Matt. Change is constant. And I never thought that we would be a Hyuandai as their only contribution used to be goofy ads, but we have a Santa Fe sitting in our garage. They should be a case study in branding and in managing change. Thanks, --Mike

Jim Stack's picture
Jim Stack on Jul 28, 2021

A big secret is all the cell phone towers and Electric Vehicle charging sites are powered by the local Utility. Many other companies like them don't want to mention that FACT. So there are a lot of customers to the utility that are hiding in the area.  

Michael Smith's picture
Michael Smith on Jul 29, 2021

Yes Jim. The landscape is changing quickly. It'll be interesting to see where this all lands over the next few years. Thanks,  --Mike

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