As businesses continue to adapt to new sets of operational demands due to Covid-19, they are under increased pressure to find ways to reduce expenses and take actions that enhance their resiliency. Smart companies are looking for every opportunity to improve their bottom line, with many of them turning to their utility companies for ways to reduce energy consumption. Even before the recent global challenges, utilities’ revenue models were already starting to evolve in response to changes in the market. The new customer service model for utility companies centers around solutions that provide genuine value to customers. Beyond the supply of electricity, commercial and industrial (C&I) customers now expect a personalized digital energy experience with insights, energy efficiency incentives, demand response (DR) programs, clean energy choices, and the necessary support to leverage investments in distributed energy resources (DER).
Having looked at the various strategies utility companies employ to reduce energy demand and stress on the grid in Part 1 and Part 2 of this series, then addressing the magnitude of electricity that buildings consume in Part 3, we now delve into ways that utility providers can best serve their C&I customers through modernized approaches to customer service.
Excellent customer service enhances reputation
In many states, an electric utility is a classic example of a monopoly. Their status protects them from competition, which, in theory, which has traditionally led utilities to pay less attention to customer service than most businesses. However, all companies are judged and measured in part by the quality of their customer service. In an era of smartphones and social media where complaints become viral, true industry leaders seek to distinguish themselves by consistently meeting and exceeding customer expectations regardless of competition level.
As a result of deregulation of electric generation in many markets, and more recently, the rapid adoption of renewable and distributed energy resources, utilities are now facing the need to compete for customer business. Otherwise, they will face an erosion of their revenues as customers reduce their resilience on the utilities’ electric generation and distribution network. An increasing number of customers are reducing their dependency on traditional power grids and adding other energy sources like renewable options to the mix. A recent report from Wood Mackenzie Power & Renewables details the rise of distributed energy resources (DERs) as grid assets. According to the report, distributed generation and storage will account for 20.7% of all generation and storage installed in the U.S. by 2025.1 For example, over the past decade, distributed solar has surpassed fossil-fuel generators for behind-the-meter generation. Falling costs and favorable policies at the commercial scale account for solar capacity’s 38% compound annual growth rate (CAGR) vs. 3% for distributed fossil in distributed generation over the past decade.2
The importance of staying engaged
With customers having increasing access to alternative providers, utilities need to focus on creating value and addressing customers’ needs and expectations as never before. Helping customers optimize their energy spend and usage is one way that utilities can keep them engaged using various communication platforms, including websites, webchats, mobile apps, and text messaging services.
Effective engagement strategies focus on educating customers in a personalized manner that contextualizes actions and benefits. Customers expect regular updates on:
- Energy prices
- Energy-saving measures, programs, and incentives
- Environmental benefits of energy efficiency and clean energy investments
Creating value for the C&I customer
Utilities have much at stake in protecting grid health. And they have vast knowledge about how businesses can save energy. These two factors can motivate utilities to deliver meaningful programs and services that impact the distribution network and bottom lines. But C&I customers are not just concerned about saving money; they are driving the demand for clean energy. As the energy transition from oil, coal, and natural gas to renewable sources progresses, corporate attention is more focused than ever on how their power is produced. Customers should be able to look to their utilities as trusted energy providers for a host of options like the following that help them achieve their goals:
Energy efficiency (EE) programs – Many EE programs offered to businesses are sponsored by utilities. According to the American Council for an Energy-Efficient Economy (ACEEE), 27 states have energy efficiency resource standard (EERS) policies in place that create binding energy-saving targets for utilities.3 The savings are achieved through EE programs designed for customers, which can include:
- Building codes and appliance standards
- Rebates and financial incentives for energy-efficient actions
- Product rebates
- Retrofit programs
- Smart thermostat programs that can be enhanced by technologies like Encycle’s SwarmStat™
- Public-benefit programs
Utilities know that customers appreciate energy efficiency efforts and can use them to leverage customer satisfaction. A report from the State and Local Energy Action Network (SEE Action) concluded the more utility customers knew about these programs, the more their satisfaction increases.4 The key is making sure customers know about them.
Demand response (DR) programs – Demand response is a proven energy-management strategy for facilities. Energy customers who enroll in DR programs receive financial incentives for reducing their energy demand during periods of peak demand and/or shorter supply. Today, cloud-based HVAC software is making it easier for companies to participate in DR programs.
Distributed energy resources (DERs) and electrification – Large commercial entities have the capital and desire to invest in sustainable initiatives like solar arrays, wind generation, backup generation, electric vehicle (EV) fleets, and charging stations. While these may present a tricky situation for utilities due to revenue threats, the new industry reality is that customers are looking for transparent support. Eventually, utilities may end up becoming procurement channels for a wide range of sustainable products and services.
Embracing digital technology for better business outcomes
Beyond the supply of electricity, commercial and industrial (C&I) customers now expect a personalized digital energy experience with insights and choices that match the level of service they routinely receive from everyday technology leaders like Amazon and Apple. Educating customers on their energy use and options allows them to make smarter choices. Here are a few things proactive utilities are delivering to C&I customers to meet rising digital platform expectations:
- New strategic technology solutions that empower customers to access a host of utility usage data from their smartphones, tablets, laptops, and other mobile devices, allowing them to control their energy decisions and reduce carbon emissions remotely
- Personalized experience with 360-view into usage, transactions, and data-driven insights with metrics that demonstrate business outcomes
- Adaptions for artificial intelligence (AI) and machine learning such as Encycle’s Swarm Logic® cloud-based technology that typically results in a 10%-20% reduction in energy consumption and demand for Encycle customers
- Ability to work with third-party vendors
- Transparency into market choices
Shifts in the market and customer expectations have created a need for utilities to behave less like power giants and more like technology partners who share a global responsibility to use our world’s resources responsibly. Providing power on demand is no longer enough in today’s complex energy environment. Utilities must understand their customers’ challenges and goals and develop tailored solutions to meet them.
Contributing author: Chris Hensley, Executive Vice President of Sales and Marketing, Encycle Corporation
1 Wood Mackenzie Power & Renewables , 2020, United States Distributed Energy Resources Outlook, www.woodmac.com/reports/power-markets-united-states-distributed-energy-resources-outlook-der-installations-and-forecasts-2016-2025e-416181/?utm_source=gtm&utm_medium=article&utm_campaign=pandr&utm_content=wmpr_deroutlook2020.
2 John, Jeff St. “5 Major Trends Driving the $110B US Distributed Energy Resources Market Through 2025.” Greentech Media, 10 Aug. 2020, www.greentechmedia.com/articles/read/5-takeaways-on-the-future-of-the-u.s-distributed-energy-resources-market.
3 American Council for an Energy-Efficient Economy (ACEEE), 2019, State Energy Efficiency Resource Standards (EERS) – Policy Brief, www.aceee.org/sites/default/files/state-eers-0519.pdf.
4 SEE Action, 2011, Impacts of Energy Efficiency Programs on Customer Satisfaction, www7.eere.energy.gov/seeaction/system/files/documents/ratepayer_efficiency_customersatisfaction.pdf.