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Strained Customer Relationships in the Future of Electric Utilities?

Low-cost renewable energy and energy storage are reshaping the Canadian electricity industry (see Along the way, new regulatory frameworks, energy choice, and competition from new energy service providers will transform the relationships between utilities and their customers. If what happened in other industries that went through similar transformations is any indication, such as airlines and telecoms, those relationships could be strained. Utilities should learn and apply lessons from those industries, hopefully not making the same mistakes again.

Twenty years ago, an Angus-Reid survey put Bell Canada #2 among most admired corporations in Canada. In 2017, Bell Canada ranked #291 in a University of Victoria brand trust survey. People love their Apple or Samsung phones, are addicted to Facebook to stay in touch with friends, and use Microsoft Skype to see remote family members, but they mostly hate their phone company.

The transformation of the telephone industry in Canada really started in the 1980s with businesses being able to lease high-capacity dedicated lines from other providers, such as CNCP Communications. Businesses were clamoring for more, and the Canadian regulator, the CRTC, allowed resale of telephone companies services, first dedicated lines and then local phone services. Canadian long-distance market developed slowly until 1992, when Canada unbundled local and long-distance telephone services and allowing competitor entry into long-distance services. When cellular service became more popular around the year 2000, it also offered an alternative to local services. However, if competition in residential long-distance services is seen as a milestone, the fact is that it all started with businesses leasing high-capacity lines from competitive providers — businesses were already resenting being coerced by phone companies. Later, when residential customers got choice, they too got dissatisfied.

It is still early, but we may be seeing the same unfortunate trend with electric utilities. When listening to renewable energy developers or commercial businesses, you already hear an undercurrent of dissatisfaction, although the reality is that there is not much they can do. With low-cost renewable energy, energy storage and microgrids, businesses will start to see alternatives. Eventually, the same will happen with residential customers. Unbundling of the wire business from energy retail will bring more choices. You can readily see a parallel with telecoms .

This is a very real risk for utilities: in 2030, there will be many more potential friction points between utilities and customers than there are now. In addition to traditional transactions such as new connects, outage reporting, energy efficiency and bill payment, there will be multiple demand response schemes, EV charging and energy sales, bringing new expectations along. Even if customer satisfaction surveys are good now, they may not stay that way.

I have worked in the telecom industry as head of marketing, in customer care and as a business consultant — I have seen what happened there. I have also seen some of the best and the worst of stakeholder communications at electric utilities — including while I directed a large smart meter deployment, a very challenging activity for customer relationships. Beyond the obvious like using social media, online self-support, and efficient call center operations, here is what I have to offer to electric utilities in improving their chances to maintain healthy customer relationships as the industry is transforming: 

  • Lead the change. Customers want solar panels on their roofs and go off-grid? Make it easy for them! Green Mountain Power (VT) does it. Regulation will be performance-based? Propose it now! ENMAX (AB) did it. Customers want behind the meter energy storage? Install it for them! PG&E does it.
  • Show what you do. The electricity business is complex and not appreciated well enough. For instance, grid upgrades should be media events — see this FPL (FL) video, “crews will be installing automated switches”: The electricity business is highly technical and sometimes dangerous — it deserves more attention in plain words.
  • Understand changing customer expectations. With increasing dependence on reliable power for our vehicles and electronic devices, plus distributed generation earning revenue for customers, outage frequency will become a more and more important factor for customer satisfaction.
  • Partner with community leaders. Mayors and other community leaders, acting locally on a short feedback loop from their constituents, view the challenges of clean energy and climate change on a daily basis — it is about their people getting sick, having clean water, being warm or cool, holding productive jobs, commuting efficiently, and surviving disasters. Yet, few electric utilities work with cities on resiliency and sustainability challenges.
  • Even with all the talk from consultants about customers wanting more participation, the fact is that electricity will never have the emotional content of communicating with friends and family, would it be telephone or Facebook. This only makes it harder to ensure that electric utilities can maintain healthy customer relationship. Still, it can be done.

Are you up to the challenge?

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