From the falling price of rooftop solar photovoltaics to gas-fired microturbines for commercial/industrial concerns, technologies and service companies may grab the brass ring before utilities manage to cement a relationship with their long-time ratepayers.
Columns on that elusive creature, the "customer," seemed to grab readers' attention this past week or so.
I suggested in "Utilities Race to Reach the Customer " that as utilities play footsie with dynamic rates and other value-creating options for the customer, others may beat them to it with more compelling value propositions. From the falling price of rooftop solar photovoltaics to gas-fired microturbines for commercial/industrial concerns, technologies and service companies may grab the brass ring before utilities manage to cement a relationship with their long-time ratepayers.
Readers jumped all over that, to my surprise. Frankly, each time I think I might be waxing a tad blasphemous, it turns out everyone's way ahead of me. (I've edited reader comments for length and clarity.)
"Utility managers [should] set aside the notion of monopolies and 'captive customers,' even drop 'ratepayers' from their vocabularies," wrote John Cooper, partner, NextWatt Solutions and co-author of The Advanced Smart Grid. "Those days are fading into memory. New technologies are offering compelling substitutes to grid power, and the quantity and quality of those substitutes will only increase with time.
"Under such an imminent threat to revenue, it makes sense to prioritize customers, create a list of must-keep-at-all-costs customers, understand them better than they understand themselves, identify solutions to their problems and offer services that anticipate their needs. In the face of such compelling value and attention, some customers may still choose to take on more independence from the grid, but they are far more likely to see their utility as an important part of their energy future. Acquiring competitive market skills is a critical, strategic imperative for utilities."
Richard Pate, of Pate & Associates, was a bit more direct.
"The horse has already left the barn," Pate wrote. "How do you get [customers] to return? Not all will return because some will cherish their freedom . The once widely held belief that the utility is the energy expert is no longer commonly held. He who gets there first and [earns trust] stands to change the market dynamics. Holding and using energy information is very personal and moves you from [being] an outsider to an intimate partner. That is the only way to reach the customer on their terms."
The blogger otherwise known as "Rubbervines" suggested that all is not lost.
"The horse has left the barn for some but not all," Rubbervines wrote. "If utilities do not produce a relevant product that creates value for customers, they will go elsewhere. Moreover, those customers with options now or in the near future will be large commercial and industrial customers whose departure will have significant impacts on the allocation of system costs across the customer classes.
"The difficult part for utilities or any organization facing these types of market shifts is internal culture," our blogger continued. "It takes vision, leadership and many years to change an organization's trajectory. Moving from hard asset knowledge and expertise to the softer side of the people equation is no small feat, particularly for the 30-year executive who is a transmission and distribution expert."
Other recent columns we're run on utility customers include:
Intelligent Utility Daily