Utility executives face volatile energy markets, skyrocketing fuel prices, and changing federal energy policies. How are utilities benefiting from the turnaround in energy trading?
• Atlanta. Cable and video on demand added to basic local telephone service, by Bell South.
Rucker's firm studied the length of time the pilot had run, the type of company running the pilot, the charge (if any) and mix of services (for more information, call 404-222-9822). Overall, Rucker found that customers don't view these features as futuristic. They see them as viable right now. In no way, says Rucker, have pilot programs left customers jaded or disappointed. But do they prefer entertainment to energy?
"Customers want control," he explains. "They want the ability to make that decision. We can't sit back here and say that most customers aren't interested in energy management. We found pockets and segments that are very interested in that.
"But of greatest interest was the one-bill concept. It outweighed other options, relative to cable, telecom, energy, information or monitoring and protection."
The Second Opinion has collected quite a lot of data comparing pilot programs, whether offered by energy utilities or telephone carriers or others (see sidebar). Rucker confirms the demise of the PSE&G pilot, along with Entergy's PowerView. (Entergy's tech partner, First Pacific Networks, went out of business.) Rucker warns against too much faith in technology at the expense of market research.
"I had done some work with utility clients and had attended some conferences, including the February DA/DSM conference, out in San Diego, and I thought to myself, 'This can't be right.' I didn't like what I was hearing when the utilities described their pilots.
"It was all hype. I kept going back to the basic question: What are the customers saying? Instead, when the utilities described their projects, nobody mentioned customers. Everybody was talking about energy costs from an engineering point of view. And I know many companies are thinking about whether to go into this without doing any consumer research."
The biggest surprise?
"I was completely amazed by how much the participants knew about what was available, what was possible and who might offer these services. Most utilities are sitting there, watching their neighbor. But customers are thinking outside the industry; they're thinking Microsoft, IBM, Wal-Mart."
I asked Rucker whether he saw energy and associated two-way services as a commodity or a niche product.
"It's all in the packaging. Branding isn't important for a commodity. But for a niche product, if you don't brand it, your customer will turn your 'value-added service' into a commodity. Everything will slip through your fingers and you'll be sitting on some very expensive technology."
Can you give any advice to utilities on branding?
Rucker: "I've gone to my third conference on branding and I swear that's the last one. The only time you own a brand is when you can claim attributes that you alone can earn. When Nike created their 'swoosh' logo, they didn't stop there. Their brand value lies in the minds of their customers.
"Corporate names and logos are not brands."
Energy/Telecom Tech Pilots
AEPCustomer-controlled load mgmt., home automation
C&SWEnergy mgmt., real-time pricing, home network
Detroit Ed.Home automation
Duke Pwr.CCLM, entertainment, interactive shopping