Pike Research
Cleantech Market Intelligence
Utilities: Consumers’ New Best Friends
Consumers have historically only thought about their utilities during monthly bill paying sessions and on the occasions when the power went out. Utilities generally kept the mass communication to a minimum, except to explain how rate hikes were unavoidable.
This relationship is about to get much closer. Utilities are taking a more active role in promoting energy efficiency, a first step in tightening the customer relationship.
For example, California utilities PG&E and the Sacramento Municipal Utility are now working with national consumer electronics stores in a marketing campaign to promote buying energy efficient appliances. In deregulated states, and for publicly owned utilities where profits are not based on the amount of power sold, promoting reduced energy consumption is understandable.
But in states without decoupling it’s more complicated. While cutting back power intake can help reduce peak demand, using less power at night and early in the morning will negatively impact revenue. “Use less of our product” is an awkward message to deliver, as cigarette companies can relate.
As the grid continues to age, power gets more expensive, and the headroom above peak loading get smaller, so utilities will need consumers’ active participation — or at least permission to automate power reductions — more often. Having consumers willingly participate in demand response programs and shifting consumption to off peak hours is much cheaper (and publicly acceptable) than building more power plants.
Utilities will have to explain new services to consumers, including the benefits of smart metering as well as how to optimize your energy day for time of use pricing, which will become more pervasive. Putting more control in consumers’ hands takes some of the power away from utilities.
Electric and plug-in hybrid vehicles if charged during peak hours have the potential to overload neighborhood distribution equipment, and since controls for limiting peak power won’t be in place when the vehicles role out, utilities will have to politely ask consumers to do the right thing.
For utilities it will be less “Don’t call us, we’ll call you” and more “Hey, how’ve you been?”