Healthy utilities begin with happy customers

Wed, 2015-02-25 06:00 -- Kevin Ebi

Can you imagine if people cut their power lines the way they have been cutting the cord with their cable television providers? Between distributed energy generation, conservation and other advances, that scenario isn’t quite as farfetched as it might have sounded just a few years ago.

One key to survival of utilities involves treating their ratepayers as customers. New technology from Council Associate Partner Opower promises to help utilities make that transition, providing customers with a level of customized service that’s more like what one would expect from an online retailer. And some utilities are already signing on.

Beware of the utility ‘death spiral’
There’s been a lot of debate over the so-called utility “death spiral,” which was again quoted by Energy Efficient Markets in its profile of Opower’s new efforts. The idea is that as new technologies emerge, consumers could have the option to abandon utilities, a choice that could ultimately put utilities out of business.

That talk was underscored in a report from Morningstar Research that said as customers switch to distributed generation for their power, “utilities’ costs to maintain and operate the grid must be spread across a smaller customer base, raising customer rates and increasing the economic incentive to cut the cord.”

Forbes, in its explanation of the report, drew parallels to the U.S. Postal Service, which is struggling to survive in an environment where emails have replaced letters and packages are handled by other delivery companies. The costs of the extensive infrastructure are being covered by fewer and fewer users, driving the price of the service higher, causing even more users to flee.

Treating people like valued customers
While some, like Forbes, deny the threat to utilities is all that great, there’s no downside to improving customer service. And Opower is making it easier for utilities to make great strides in this area.

Already, Puget Sound Energy has signed up for Opower’s Customer Care solution. The utility, which serves more than 1 million customers in Washington state, says it plans to use the technology to help customers save money, to take the surprise out of bills and to migrate customers to electronic forms of communication without jeopardizing service.

Among other things, the solution will allow the utility to send alerts to customers if it notices their usage has suddenly spiked. That alert could not only help reduce the shock of a large bill, it could give them time to take action to prevent the bill from getting out-of-hand in the first place. The alert could provide possible explanations for the abnormally high usage and suggest corrective steps the customers can take.

As Opower says, this type of service demonstrates that the utility is looking out for customers, not trying to gouge them. And this shouldn’t be considered such a groundbreaking idea. Even wireless phone companies warn you when you’re about to go over your limits. 

Providing individual service
The key to success will be the ability to offer personalized service, which online retailers have conditioned us to expect. While Puget Sound Energy, like other utilities, would like to move customers to electronic bills and other online services, Opower gives it the power to make sure those forms of communication truly work for everyone. For example, if a customer signs up for email notifications, but the Opower platform notices that they never open those messages, it can automatically switch them back to paper mailings.

Opower says it’s obviously able to offer more personalized service for utilities that have installed smart meters, but that is not a requirement for its Customer Care solution. It can still make use of past data and predictive algorithms to offer personalized advice.

Amazon-like customer service
During the Goldman Sachs Technology and Internet Conference, Opower CEO Dan Yates told the audience that for utility customers, it’s no longer about reliability. Even more than that, they are now demanding improved customer service.

Being proactive with billing is a first step, but it’s not the end of Opower’s customer service efforts. Yates says Opower wants to lead the transformation of how utilities serve their customer for everything -- from billing and outages to call center activities.

Even if the utility death spiral doesn’t pan out, as cable television providers have discovered, there’s little to be gained from angry customers. For utilities, happy customers can become more engaged customers, which in turn could bring new life to conservation and other efforts.

More resources …
New Itron survey is a wake-up call for utilities
How analytics help utilities speed storm response (and even prevent outages)