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Utility 2.0

Web technologies are transforming the utility-customer relationship.

Fortnightly Magazine - August 2008

topics as climate change and community service can have their own discussion rooms. The Web site might provide video and image hosting features so consumers can share photos related to their personal energy solutions. Information on smart metering and TOU pricing, tagged with customers’ comments, would enrich communication and help utilities find opportunities to enhance service quality.

Transparency and risk assessment jointly can help develop electricity consumers’ trust in areas such as environmental footprint, capital investment and related rate impacts. Increasingly customers will ask specific questions about utility resource strategies. What’s the utility’s projected generation fuel mix over the next ten years? What’s the role of distributed resources, and how are consumers affected? How is the utility hedging against energy price risks with short- and long-term power-purchase contracts, and what are the cost impacts? What specific initiatives is the utility undertaking to reduce greenhouse gas emissions? How are transmission-line projects related to the utility’s resource strategy and climate footprint?

This information often is public, but an interactive Web presence can help the company ensure it reaches key stakeholders.

Engaging consumers in discussions through blogs and forums can reveal their sentiments around specific issues, and enable utilities to respond to them. An online poll can indicate how much ratepayers would be willing to pay for greener energy.

Taking this interaction a step further, utility Web sites can help to combine the essence of risk assessment and dialogue to leverage consumers’ opinions for influencing various policy making criteria. Participation in the forums and the polls not only will provide input to the policymakers, but will develop a more aware community with a better understanding of rationale behind public policies.

Web Revolution

Increasing consumer awareness and involvement in their utility service could turn “going green” into a social revolution. Sophisticated tools for Web interaction could bring about the tipping point—and utilities stand to gain or lose depending on how they engage consumers during this transition.

Penetration of the Internet in North America is about 70 percent. The Amazons and MINI Coopers of the world continuously are raising the bar of customer expectations in terms of online experiences. To live up to these higher standards, utilities will leverage the social networking capabilities of the Internet.

From an operations standpoint, as the marketplace becomes more customer-focused and customers’ bills become more sophisticated, utility contact centers likely will face increasing burdens. Enhanced self-service functions, which go hand-in-hand with Web 2.0 features, provided with advanced user-friendly design, will help customers resolve more issues themselves instead of calling the contact center—and ultimately will lead more consumers to become co-creators of value.

Social commerce is a concept not only to be exploited by consumer product retailers and dot-com companies such as Yahoo!, but ultimately will become a strategic path to success for the 21st century utility industry.

 

Endnotes:

1. “Co-creating unique value with customers,” C.K. Prahalad, Venkatram Ramaswamy, Strategy and Leadership , 2004.

2. Current Issues in Economics & Finance , Vol. 7, Number 6, June 2001.

3. Carol Hymowitz, “Managers Find Ways To Get Generations To Close Culture Gaps,”