Customers in some markets are demanding the right to opt out of smart meter deployments. Their concerns involve radio frequency (RF) emissions and potential privacy breaches. Whether these...
Tools, Platforms and Ecosystems
Can a disruptive technology change the electric customer experience?
North American energy utilities are investing billions to create a smart grid to enhance service for retail electric customers. The smart grid, a disruptive technology, will provide utilities and customers with access to information about how electricity is used that they’ve never had in the past. More importantly this information can empower customers to take ownership of their consumption profile and demand different products and services.
Access to the information collected from the smart grid will be a game changer for utilities. The utilities that master information about their markets and customers will gain insight into new product designs and pricing approaches. This insight, coupled with new systems, can foster a dialogue between a utility and its customers about how they use energy and change the customer experience.
As utilities venture into this information-rich environment, they’re asking: What information to collect? What analytics are required to extract intelligence from the data? How will it transform the customer experience?
DETech, the Demand and Energy Technology Research Consortium, 1 recently conducted research to study the impact of the smart grid on the customer experience. It investigated the approaches that leading utilities are taking today, and how a utility’s business strategy affected these decisions. DETech staff surveyed and interviewed 12 leading utilities 2 in North America on their plans for the smart grid, and specifically how data will be used. The survey participants represented a cross-section of utilities at different points in their implementation and from different regions in North America.
The Telecom Model
To provide perspective, research focused first on telecommunications, including the introduction of wireless, another disruptive technology. While it seems that new uses for wireless devices arise every day, a review of the transformation process shows that it actually took several decades. Early on, in 1982, the nationwide AT&T divesture settlement helped contribute momentum. Yet, it took 30 years from that point to transform a regulated landline and wires business into a business that’s far broader than voice communications and which counts on wireless as the primary growth business. Today the transformation is continuing, driven by market forces.
By contrast to telecom’s national deregulation, electric markets are balkanized; they are restructured in piecemeal fashion, state-by-state. That provides for smaller and more diverse markets, which complicates the tasks of achieving scale and establishing standards that facilitate market development.
Technology change transformed the telecommunication market, and provided customers with new value-added products. The electric market transformation, on the other hand, is driven by policy and regulatory changes with the new technology and products likely to follow. This difference has dampened customer interest, along with a basic awareness of what technology might hold in store, making the business case for change even more difficult to communicate to investors.
Nevertheless, the telecom model still can offer lessons. For example, it moved ahead in several distinct phases.
First, the traditional, basic, two-way land-line phone became