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Utilities and the Terrible, Horrible, No Good, Very Bad Year

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Paul McDonald's picture
Senior Director, Product Strategy Oracle Utilities

Paul is a Senior Director of Product Strategy at Oracle Utilities. He helps energy providers decarbonize and grow their businesses by influencing consumer action. He's responsible for building an...

  • Member since 2020
  • 5 items added with 3,959 views
  • Sep 25, 2020

This item is part of the Advances in Utility Digitalization - Fall 2020 SPECIAL ISSUE, click here for more

Wildfires, record heat, hurricanes, a global pandemic…and who could forget, murder hornets. Maybe it’s just because I have three young children doing online schooling, but 2020 is feeling a bit like Judith Viorst’s famous children’s book, Alexander and the Terrible, Horrible, No Good, Very Bad Day. And to think, we still have three chapters to go. 

While it’s been years since utilities first set out to build a customer-centric grid, the truth is that most are at widely varying stages in this transformation. Building a clean, flexible grid means engaging customers and changing behavior like never before. It begs the question, “What does successful engagement look like?” For utilities, maybe it’s as simple as just getting customers to take a minute to pay attention and take action. After all, Accenture famously found that the average home spends just nine minutes a year interacting with their energy provider.

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But here’s the thing about this unusual year: Maybe because they finally had time, or maybe out of necessity, customers did stop and pay attention. A poll of hundreds of utility customers in the U.S. in April found they actually wanted more information from their utility provider. Thanks to investments in digital customer-facing technologies, some utilities were ready to respond across a wide variety of channels and mediums by:

Adapting information to the moment

For many people in the U.S., March 13, 2020, was the last day they went into the office or sent their children to school. All of a sudden, the whole family was home around-the-clock – sending utility bills skyrocketing 20-50%, depending on the area. Over half of the utility customers surveyed in the poll above reported anxiety about paying their bills. The data also showed that more than 70% of utility customers were interested in receiving notifications of an impending high bill, but only 15% were receiving it. Utilities we work with like Puget Sound Energy (PSE) doubled down on efforts to provide customers this information as well as tips on how to reduce their energy usage and costs. Welcomed by customers, PSE’s high bill alert messages got email open rates more than 2X the industry average. We are living in an information age, where customers can get an update on almost anything in their lives with a click of a button. Likewise, utilities must have the digital infrastructure in place to be able to quickly adapt messages to the moment to provide customers the information they need to make better energy and cost-saving decisions.

Creating flexible billing

High bills have been an unfortunate byproduct of the pandemic. For utilities, this called for a few unique steps. For starters, it required them to look deeper than system averages and aggregate load shapes that obscure the larger bills being received by the most vulnerable customers. Those bills are demanding an even larger share of those households’ budgets. Using data, utilities broadened their scope to identify more customers that may need assistance and let them know help was available through regular outbound communications – in this case, both paper and digital to reach everyone.

In tandem with flexible customer information systems (CIS), utilities adapted standard billing procedures. This included halting shut-offs and creating special payment plans and billing to help customers continue to have the power they need. Moreover, offering modern, easy-to-use online customer service options allowed people to regularly check on their bill and usage, use chatbots to answer quick questions, or reach a service agent that has full visibility into their profile and new billing plan to answer any questions.

Reimagining old business models

While a lot has been said for the impact of COVID-19 on customers, it had a strong impact on utilities as well. With many commercial buildings closed and rate-increases paused or halted for the foreseeable future, utilities needed to quickly adapt their business models to keep revenue flowing. One perfect example was home energy audits – a traditionally “in-person” activity. Prior to COVID-19, a Midwest energy provider we work with had already moved their assessment program from in-home to fully online. Their customers complete the home energy assessment online, then receive an energy efficiency kit tailored to their profile. Nobody ever needs to enter the home. Since moving online, this program is reaching 6X more customers than the onsite program did, with an average of over 3,600 customers completing the online assessment each month. Ninety-six percent of customers gave the online assessment a digital thumbs-up. Again, by digitizing an established program to make it more applicable to the needs of today’s household, utilities can help customers and keep revenue coming in. 

Enlisting customers to help

Sometimes you just need to phone a friend (except Paul, you recall in the book he is no longer a best friend). In August, a massive heatwave led the California Independent System Operator (CAL ISO) to institute rolling blackouts for the first time since 2001. It gave a grave reminder of the fragility of the CA energy grid, which is facing an unprecedented barrage of extreme weather; renewables that bring intermittency; and as we addressed above, the pressures of increased home energy use brought about by COVID-19 stay-at-home orders. All three of them together presented a real challenge for California energy providers and put customers at risk of mandated blackouts when they were most vulnerable. While continued investments in grid resiliency can’t be underplayed, what could not be underplayed in this scenario was the resiliency of customers. Pacific Gas and Electric, San Diego Gas and Electric, and Southern California Edison orchestrated demand response measures via advertising, emails, phone calls and texts  asking consumers to turn down their air conditioners and reduce energy use. Customers rose to the challenge, avoiding blackouts in numerous areas. This situation underscored the importance – and effectiveness - of using demand response programs to enlist customers’ help in the most extreme conditions.

Preparing for the unknown

As if a pandemic wasn’t enough, the extreme weather events are increasing yearly with more vigor and severity. Outside water, perhaps, electricity was the single most important asset customers had during these difficult times. To help minimize energy disruptions, many utilities are melding artificial intelligence with their outage and workforce management systems to predict future outages and preparing for any situation to help ensure services can be restored to customers as quickly as possible. This is critical for several reasons. The first being that by enabling outage management with storm prediction capabilities, utilities can begin to see where the most damage may occur and have crews at the ready. The sooner the crews can get to work, the sooner they can mitigate outages for customers.

It also allows utilities to better understand how long outages may last, enabling proactive communication that lessens customer anxiety and reduces incoming calls that can overload call centers. For example, Con Edison created a unique customer-journey mapping tool as part of its outage management experience that ingests real-time customer text communication data and monitors and responds to customers – keeping customers informed and engaged. While this level of communication has been seen as a nicety, it may soon become a requirement. States like New York are proposing heavy fines for utilities that don’t communicate often and accurately with customers during these outage events.

For utilities, managing the barrage of everything from a health crisis, to extreme wind, fires and storms requires a new digital strategy for customer engagement, one that enables real-time, flexible programs and messaging. The positive impact of the confluence of several horrible, no good, very bad events in 2020 is that customers have shown an increased appetite for working with their utility to navigate and adapt to the “new normal.” Utilities have a rare opportunity to capitalize on this opening to rethink how they engage customers and realize the vision of a clean, flexible customer-centric grid. 

And as for 2020, as the book says, “I hope you sit on a tack.”

Matt Chester's picture
Matt Chester on Sep 25, 2020

A poll of hundreds of utility customers in the U.S. in April found they actually wanted more information from their utility provider. 

Hoping this is the beginning of a trend-- an engaged customer base is one that is more readily able to play partner to utility (load management? V2G? more efficiency opportunities-- lots of possibilities!)

Linda Stevens's picture
Linda Stevens on Sep 28, 2020

Excellent article! I am a PG&E customer and get so frustrated with the lack of information and honesty. My take-away from my experience is that communicating with customers (including ads, fliers, etc.) need to be honest and forthright. Customers want their utilities to succeed. Listen to them, not your legal team when communicating.

Jim Stack's picture
Jim Stack on Sep 29, 2020

Great comment Linda. Customers wantvto do things to help the overall GRID if given the facts. It's all about education.

In the Phoenix AZ area in 2004 there were 2 transformers that blew. It took 1 to 2 months to get replacements. Customers were asked to reduce and shift loads to off peak. They did with no payback they wanted to help. It was a great time all working together. 

Peter Key's picture
Peter Key on Oct 8, 2020

Back in March, when it was becoming evident that the pandemic was not going to just disappear, I wondered if electric utilities should take advantage of the fact that millions of suddenly housebound Americans had more time on their hands than they knew what to do with by trying to get their customers to become more active power consumers. I talked to a couple of people with firms that consult with utilities and they said that probably wasn't a good idea. One said the people who benefit the most from variable rate plans and the like usually are already enrolled in them, so the type of efforts I was thinking of weren't necessary. The other said that, before they do anything else, utilities should concentrate on making sure that their customers who need help with their bills are in programs that provide it to them and the way to do that is to heavily promote those programs, even if that means promoting apps and interactive plans less than they'd like.

I've never revisited the subject, but I think what has happened since I wrote that post is that, as Paul says, many bad events in many places have made lots of utility customers much more ready and willing to spend time interacting with their power providers than they were when the year started. Utilities that are well-positioned to take advantage of that are going to be able to significantly boost their customers' views of them. Utilities that aren't need to get up to speed quickly before lawmakers and regulators force them to.


Paul McDonald's picture
Thank Paul for the Post!
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