The future for utilities, rebate programs, and DOE/EPA cuts.
The Keystone Energy Efficiency Alliance (KEEA) held their annual conference last month in Hershey, Pennsylvania and although PA is the main focus there were takeaways that are applicable to the entire country. Here’s what I learned that will be of interest to you.
Utilities are trying to become more customer-centric and want to be able to use data and analytics to provide a better customer experience. They are realizing that long gone are the days of the ratepayer and now they have customers whom have an expectation to receive a certain level of service.
According to a recent study done by Navigant Research, the global customer engagement spending by utilities is expected to grow from approximately $3.6b in 2017 to over $5.2b in 2026. The study focuses on improving customer experience through the web, billing, as well as call center improvements and outage notifications.(1) Customers have a much higher expectation about being engaged in ways that they operate now and utilities want to have more personalized communication with their C&I customers.
To put this into perspective, traditionally utilities only used monthly utility bills as a way of letting customers know their energy consumption. Some utilities have moved to online portals where customers can login to view their usage history. Utilities need to catch-up to other industries where they’ve embraced more modern notifications such as receiving a text when you go over your monthly data limit on your phone plan. To take it one step further, they could text customers about best practices for energy efficiency or let customers know when rebates are available.
There was also an interesting discussion around the cost versus benefit of the financial dollars of energy efficiency in regard to utility rebate programs. The cost to acquire that next kWh of savings is getting more and more expensive for most utilities that offer rebate programs. This is happening for a few reasons: a lot of the low hanging fruit which would be your basic lighting and retrofit projects have been completed at least for the larger customers, the next projects are more expensive to complete and therefore cost more in rebate dollars, and the cost to market and find customers that have never participated is more expensive.
My last key takeaway from KEEA was presented by the Alliance to Save Energy ‘Win, Lose or Draw in the Age of Trump.’ Where they told us that the initial 2018 budget proposal from the White House included ending the ENERGY STAR® program. This decision is to be made by mid-December 2017 regarding the final status of the DOE and EPA cuts including how it will impact ENERGY STAR. As someone who has worked in the energy industry for over 20 years I have seen first-hand how the program has directly impacted the energy efficiency of homes and building across the country. According to the Alliance to Save Energy, it has been proven to be one of the most cost effective programs in the history of the government generating $34 billion in 2015 with a cumulative impact of $430 billion since 1992.
The future of how utilities will become more customer driven and the predicted 2018 federal budget changes should be an interesting journey that will definitely affect the industry. What do you think the implications will be? It will be interesting to get some conversation around this – leave your comments below.
by Steve Moritz, President & CEO
(1)Navigant Research, Customer Management and Experience Technologies, Executive Summary