A new attitude toward energy consumption?

Deloitte study suggests new customer diligence

Published In: Intelligent Utility July / August 2011

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AS UTILITIES LOOK FOR WAYS TO ENGAGE THEIR CUSTOMERS with new products and services, a new study from Deloitte suggests they may find an eager audience. The study, "reSources 2011," conducted by Deloitte, polled 3,200 household decision makers and more than 400 business decision makers responsible for their company's energy decisions or energy policy.

Let's take a look at some of the results of the study, and their implications for utilities.

The study from Deloitte suggests the emergence of a diligent new attitude toward energy consumption in the United States. According to the study, 52 percent of companies are working to lower their energy costs by 25 percent on average over the next two to three years, and 68 percent of consumers are taking extra steps to cut their electric bills because of the recession.

Profound grassroots movement emerging
The results of the study show American businesses and consumers are in the midst of "the birth of the resourceful energy user," said Greg Aliff, vice chairman and U.S. energy & resources leader, Deloitte LLP. "We are seeing a profound and, in many ways, grassroots movement toward energy conscientiousness among businesses and consumers."

In addition to the almost 70 percent of consumers who said they reduced their electricity bills during the recession, 95 percent said they do not intendto increase their electricity use even as the economy improves.

Energy management goals set by businesses
Energy use at businesses also appears to be receiving renewed attention.

Ninety percent of the companies polled for the study were setting specific goals regarding electricity and energy management practices, and nearly three-quarters of businesses now have goals related to reducing electricity cost and consumption and improving the efficiency of the buildings in which they operate. Furthermore, slightly more than half of companies have goals aimed at improving profitability through electricity reduction and nearly one-third of companies have goals to self-generate electricity through measures like installing solar panels.

With utilities increasingly seeking to engage their customers with new products and services, the results of the study should be encouraging. And the proliferation of smart grid investments will provide a means to deliver and display consumption data directly to the customer.

More energy use knowledge needed
The news from Deloitte is encouraging, but I must admit to being a bit skeptical of some of the results. While 68 percent of consumers in the Deloitte study claim they are taking extra steps to cut their electric bills because of the recession, the reality is that annual residential kWh sales in the U.S. for 2010 were the highest on record according to the latest Electric Power Monthly report from the Energy Information Administration. This represents growth of more than 6.3 percent from 2009.

This discrepancy is telling, and could speak to the lack of knowledge that utility customers have about their energy use.

This lack of knowledge was somewhat evident in the Deloitte study. One of the questions asked whether the respondent was in a deregulated environment where more than one electric company competes for your business. Over 60 percent of consumers answered that they were not sure.

Additionally, consumers did not seem particularly enthused about purchasing either a "smart energy application" (18 percent said "yes") or paying a small amount for a meter or timer control system (25 percent said "yes"). But the youngest generation ("Gen Y") was twice as likely as the oldest ("Matures"), with 33 percent of Gen Y saying "yes" to a small amount for a meter/timer control system and 16 percent of Matures saying "yes." That would suggest that the wholesale behavioral changes around energy practices may indeed be a generational affair.

Community education a necessity
These points provide a clear indication that utilities need to invest in a solid, on-the-ground community education.

Utilities cannot become so preoccupied with the implementation of physical infrastructure that they do not think through the implications of new technology and products on customer relationships or the business process. And they should not wait for their smart meter deployment to start the education push. Now's the time to let customers know, in advance of the viral spread of misinformation by anti-smart-meter lobbying interests, what smart grid efforts are really all about.

Further, utilities should not assume that customers know anything more than the basics of electricity as it applies to them, and make it easy for customers to obtain the information they need. Otherwise, they will go elsewhere, and fill the information void with whatever they can find.

I hope Deloitte is right, and that we are seeing the birth of "the resourceful energy user." But let's keep in mind that there is still a lot of customer education that will be needed to supplement these new attitudes. Therein lies an opportunity.


 

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