The utility’s role is changing, and regulation must change along with it – to spur innovation and respond to evolving customer needs. Modernizing the industry will require a dynamic approach.
How to avoid a Texas-style backlash.
There’s a new title in the utility industry: “chief customer officer.” As any HR professional knows, trendy titles come and go. The new economy brought us “corporate evangelist” and “chief knowledge officer.” In many cases, such titles have been more effective at drawing attention to Dilbert-esque management than at focusing corporate strategy. A company that needs a “chief morale officer” isn’t likely to impress employees with a new C-suite office dedicated to corporate B.S.
So as an increasing list of utilities create the new position of “chief customer officer” (CCO), it might seem more like a PR exercise than anything truly substantive. However, the pressures that are driving utilities to create this position are very real.
For example, the industry’s newest CCO (Brenda Jackson at Oncor) got her title not as a result of new-age management, but her company’s response to a crisis ( see “Utility Chief Customer Officers” ). Oncor faces a class-action lawsuit alleging the company defrauded customers with its new smart-metering system, leading to hundreds of overcharges in monthly bills. For its part Oncor denies there’s anything wrong with the meters, instead blaming high bills on a cold snap, inefficient heaters and uneconomical service plans with third-party retailers. But by elevating Jackson to CCO, the company seems to be acknowledging that it didn’t adequately consider customers’ interests in its smart-metering plans.
“Recent events have shown us that we need to reinforce our relationship with the people we serve and step up and help them,” said Oncor Chairman and CEO Bob Shapard, upon announcing Jackson’s promotion to the C-suite. Specifically, the company said that “by establishing the CCO position, Oncor is creating a customer-centric culture where customer viewpoints and questions will be considered in all corporate decision-making.” Likewise Jackson described her new role as a “[customer] advocate inside the company. I am fully prepared to listen and take what I learn to leadership, helping ensure business strategy is influenced by customer input.”
Oncor’s decision seems like a wise move, if that’s what it takes to ensure customers’ interests are incorporated into the company’s strategy—something every utility company should be doing as a matter of course. More broadly, though, the CCO ascent seems to be part of a trend toward customer engagement. Utilities across the country are seeking to involve customers more closely in energy transactions. New technologies and service offerings allow customers to take an active role in managing their energy use—in both competitive and regulated markets—and utilities are ramping up education and outreach efforts.
But this movement begs a critical question: do customers want to be engaged by their utilities? Do they really want visibility and control? And if they don’t, where does that leave us?
Shooting the Messenger
The idea of customer engagement contradicts the standard operating procedure of U.S. franchised electric utilities. There’s little point in engaging a customer who has no practical alternative but to buy our product, on our terms. This is partly