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Do utilities really need their customers onboard?

Be forewarned: today's column may either stun you or make you shake your head over my foolishness. Either way, I doubt it'll be the first time.

Yesterday's column asked about the next customer-facing step utilities will take following the installation of interval meters. It is assumed that utilities will use those meters to improve their own operational efficiencies to improve the bottom line. What about on the customer side?

Will utility offerings be limited to Web portal-based energy use feedback to inform customers and, perhaps, inspire changes in behavior? Or will utilities engage stakeholders such as regulators, legislators and even customers to push dynamic pricing that reflects the hour-by-hour cost of generation, transmission and distribution, forcing a change in the compact between the regulated power industry and the public?

I meant to take the discussion in the direction of utility programs, policies or pricing plans that address the consumer. Because in several cases last year, regulators required a utility to spell out the customer benefits and deliver them, if the regulators were to approve advanced metering infrastructure paid for by said customers.

One reader wrote in to suggest: "Creating and communicating value for consumers should be the next step."

The customer has gone from being absent in such discussions to having in some ways dominated industry discussion in the past 18 months. The concepts of "customer engagement," the "customer experience" and customer segmentation using non-traditional demographics have been the focus of entire conferences.

So I was a bit surprised, despite nearly 30 years as a journalist, when yesterday morning during a conference call with a legitimate, veteran vendor of customer-related services, an executive made the following remark about private discussions with some utility CEOs about customer engagement.

"We're a monopoly," more than one CEO flatly told my source behind closed doors.

"They're going to back into customer engagement," my source explained of these CEOs' likely approach.

Although I cannot recall the exact statement, my source explicitly linked the term "lip service" with the term "customer engagement."

Frankly, while this may shock some, others may be shocked by my naïveté in thinking this arrogance is remarkable. But the real shock may well be for shareholders and, perhaps, regulators. They may be surprised to find out the magnitude of the gulf between utilities' talk and their walk, should this attitude be real and become public at a specific utility.

And then there is the customer, one (millions, actually) that is perhaps already inured to the—as they see it—systemic arrogance of the regulated monopoly. Because, of course, reality-speak is not the sole province of CEOs. Their customers harbor their own down-and-dirty truths, learned from lifelong, uneasy relations with, say, their local power company.

Frankly, in many cases, that's the baseline from which all our rosy talk of adding intelligence to the grid sort of departs. We can discourse all day about the technical possibilities but when it comes down to it, newspaper forums about energy and my daily dealings with fellow "ratepayers" makes clear there's robust distrust awaiting many utilities and their initiatives. It's a given that many if not most ratepayers simply resent their local regulated monopoly. (We're talking investor-owned utilities here; municipals and cooperatives by their nature escape the brunt of this discussion.)

Two thoughts:

If some utility CEOs are talking out of both sides of their mouth when it comes to their customers and those customers have a lifetime of mistrust or, at best, unease under their belts, what positive outcome could possibly result from the two sides' interaction?

Secondly, using an outside-the-box analogy, it appears that the "Occupy Wall Street" protests in this country have gotten far more interest from foreign media than domestic media. Why? Because in countries convulsed by the "Arab Spring," for instance, the disenfranchised were easily and suddenly willing to stop looking the other way and confront those they perceived as their oppressors. And the powers that be were utterly blind until it was too late.

Obviously I'm not suggesting that civil unrest will result from a few arrogant utility CEO's paying lip service to customer engagement. But the same mechanism could be at play. What if certain IOUs really, secretly, don't give a hoot about the customer/ratepayer? And what if those customers/ratepayers not-so-secretly just plain hate their utility and its perceived arrogance?

Do you suppose that all the progress the power industry, policymakers and pundits envision for the grid is going to simply roll out across the land in a milk-and-honey dream sequence? We already know it hasn't. But yesterday's conversation made me wonder if there's an unseen chasm yawning beneath us.

Maybe the CEOs in question are just rhetorical devices that don't really exist, except in juicy anecdotes. Surely no one really ever said something so arrogant. Where are the names? Who are these folks? you might demand.

I have no answers, obviously. Only questions.

Phil Carson
Intelligent Utility Daily


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