Looking beyond ranking utilities on price.
It's tempting to compare rates between utilities- to use those simple rankings as regulatory carrots and sticks...
Know Thy Customer
Companies in competitive industries routinely collect information about their customers through a variety of sources (em including surveys, national census, and government and private sources. Such customer information and its applications are jealously guarded secrets, rarely shared with others in the industry. Customer information is not limited to expenditure on a company's products or services, but usually includes a customer profile. A customer profile attempts to segment groups of "typical" customers by, for example, the production structure of a company or the socioeconomic background of residential customers. Along with other economic variables, customer profiles are often used to predict the reaction of customers to new and existing products and to project future growth for a product's market.
Unfortunately, there is a dearth of information on utility customers, with the possible exception of large industrial customers. A captive market creates no imperative to know the customers. Traditionally, the only information utilities collected on their customers came from customer surveys in compliance with mandatory demand-side management (DSM) or least-cost pricing requirements. In a many of such surveys, the aim was not to "know thy customer," but to fulfill the stipulations of the DSM or integrated resource planning programs.
The emerging competitive market calls for a much greater level of customer information as well as other intelligence. Thanks to regulatory requirements at the federal and state levels, a wealth of information is available about the cost structure of electric utilities. Information (em from balance sheets to plant-level costs (em is readily available through mandatory filings made by utilities to state and federal agencies as well as through voluntary information provided to trade organizations such as the Edison Electric Institute (EEI). Indeed, several enterprising information companies have packaged this information with slick user interface, analytical capabilities, and report-writing modules on CD-ROM.
Take National Data . . .
The WEFA Group has developed models that provide information on product expenditure based on an industry's production profile and consumers' socioeconomic profile. Recently, we applied one of our models to develop market information for electric and gas utilities on commercial and industrial customers.
The core of this model is the national input-output table. Input-output accounts provide a comprehensive set of data that records the deliveries of industrial outputs among industries and to final users, and the purchases of inputs from industries and suppliers of primary factors. These accounts are commonly presented as a table in which each industry is recorded twice: 1) as a row showing the distribution of output, and 2) as a column showing the purchases of inputs.
The table distinguishes between intermediate and final users of industrial outputs and purchases of intermediate (produced) and primary inputs. Specifically:
s deliveries of sectoral outputs to final demand (The sum of these deliveries is equal to the gross national product.)
s deliveries of outputs among all producing sectors in the economy
s purchases of primary inputs by each producing sector (These transactions are sometimes disaggregated into component categories such as employee compensation, depreciation payments, indirect business taxes, and profit-type income.)
s payments for primary factors by final expenditure categories.