Utilities across the U.S. are a decade or more into the energy transition. Utility leaders are undergoing a transformation in just about everything they do, from their traditional business of generating and delivering energy to how they engage with all types of customers. Spurred on by renewable portfolio standards from their state regulators and federal incentives like the Inflation Reduction Act, which provides “over US$300 billion allocated to encourage investments in zero carbon power generation supply, emissions reduction technology, and electrification and energy efficiency programs…” (Source: Wood Mackenzie) utilities today are operating very differently than they did just a few years ago.
Figure 1 below provides a glimpse at how these efforts are reflected in the U.S. fuel mix.
Figure 1. U.S> electric generation for selected fuels. (Source: US EAI.)
Looking at this figure one can readily see the profound impacts of massive growth of solar while the use of coal continues to drop. The U.S. is, indeed, moving towards an energy future that is more renewable and less carbon intensive. The technology that has enabled this leap forward is impressive, and there is more to come with recent breakthroughs in areas like modular nuclear energy and long duration storage.
As impressive and impactful as these technologies are, this is not the entire story. The simple truth is that without elevated levels of customer engagement, the energy transition will run into some hurdles that might prove to be insurmountable without improvements in utility customer experience (CX).
Moving towards an enriched CX is no small undertaking. According to medium.com, in 2022 utility companies were estimated to have spent $641 billion on CX technologies. Further illustrating the value of CX, 80% of utility customers value experience as much as products and services, and 59% of customers say brands need to catch up with the human element of CX.
So, what does an elevated utility customer experience look like? Borrowing a page from the Amazon playbook, start with “thinking backwards from the customer.” Consumers have come to expect a seamless digital experience that is fast and easy to use for many of their services: banking, grocery shopping, transportation; really, in most aspects of their lives. They expect the same thing from their utility. This of course points to an omnichannel digital CX, that will provide the customer with insights on energy usage, costs, and a variety of customer programs and will help the utility meet its energy and business goals. But wait, there’s more…
Next, assume that the customer is or will soon be participating in the explosion of distributed energy resources (DERs) that are becoming a key part of a utility’ energy transition. The minute that a customer puts solar panels on her roof or plugs in his electric vehicle (EV) in his garage, these customers are now no longer a passive customer just expecting an accurate bill and traditional levels of reliability; they are now also actively participating in grid operations. This has many implications for the utility-to-customer relationship that might start with billing-related programs, but can include a growing suite of services that can benefit the utility and/or the customer. Examples include “V2G” or vehicle-to-grid programs and energy efficiency/demand response programs.
The above examples are all in refence to residential customers. The possibilities for the utility to be the “preferred energy advisor” for its commercial and industrial customers abound. Examples include programs for EV fleet management, co-locating energy resources like microgrids on-site, clean energy options, and a number of ways to help manage peaks and overall energy usage and costs. Wise utility leaders are meeting or getting ahead of these needs as competitors are knocking on these customers’ doors.
One additional consideration is how DERs create challenges and opportunities in distribution operations. As the penetration of DERs grows, to literally millions instances at larger utilities, orchestrating all of these to manage the grid will be no small task. Fortunately, there have been some impressive advances in technologies that present a bright future for a DER-rich distribution network. Among these are DR (Demand Response) at scale, enabling utilities to partner with their customers in managing load, and DR’s cousin, the VPP (Virtual Power Plant). VPPs integrate multiple, often stand-alone, power sources to provide grid power.
Not to be lost in this journey towards an elevated customer experience that is also part of managing the grid of the future is the need for intelligent infrastructure that will enable many of these CX and grid management applications and solutions. This is where having a robust, reliable, and open network is critical.
Many of the applications noted above are dependent on the smart grid connecting operational systems, devices, and data across the grid and to the smart meter at the customer premise. In some cases, these applications and use cases require real- to near real-time access to a variety of data sources and formats coming off grid and customer devices. Never before has the call for a robust, open, reliable network been more critical.
After decades of a customer base that was passive and static, today’s utility customers are becoming actively engaged partners with their utility. This active customer, while creating a radically different business model rich with opportunities, has placed new demands on the grid. Astute utility leaders are embracing these new customer-centric opportunities while keeping a keen eye on reliability as the grid’s operating model continues to evolve.