Better use of existing data is the key to enhanced revenue.
Utility automation seeks to reduce operational costs and deliver new value-added services.
The first goal is straightforward and quantifiable. For example, when Public Service Co. of Colorado (PSCo) recently announced plans to expand its automatic meter-reading (AMR) system to cover a total of more than 1.3 million electric and gas meters, the reasons were obvious: The initial phase of PSCo's AMR installation had already exceeded the utility's expectations in the areas of cost containment, service improvement, and positioning for the future.
The second goal of utility automation (em new value-added services (em is more challenging and far less straightforward. We all assume that utilities will someday provide new information-based services on the "Information Superhighway." But what form will those services take? Will utilities provide telephone or cable TV services?
In theory, the possibilities for information services are endless, especially in the realm of broadband infrastructures. But successful businesses usually don't bank on concepts that have no clear definition and can be achieved only through large upfront expenditures. They concentrate instead on revenue and differentiation benefits while positioning for the future, especially when moving to a more competitive arena.
How does one identify which services offer the best opportunities during a time of shifting market dynamics and changing customer expectations? The answer: Find out more about your customers.
Many utilities have installed AMR systems in urban and suburban areas. Several are using their networks to gather valuable real-time data like time-of-use (TOU) and load-profile information. These utilities can now accurately predict energy use and patterns for all customer segments and any definable groups. There are no longer geographic or demographic barriers to
gathering this information. As they deploy these networks, utilities learn more about the needs of their customers and potential future uses of the utility's products and services.
But these systems make up only the tip of the information iceberg. AMR networks are collecting a mass of data from residential, commercial, and industrial sites. This information can be more effectively used for target and consumer marketing.
To define customized information services (em new products that can be sold to the existing customer base (em utilities must begin to think of this data in marketing terms. Additional marketing studies and "beyond-AMR" applications running on the network can enhance the data. Market segmentation studies define customers along demographic and psychographic lines (em i.e., what's most important to customers. Beyond-AMR applications give further insight into market segments through profiling. The endgame is to identify what customers consider valuable, and how much they're willing to pay for it.
After analyzing market information, a utility's next step is to find the most cost-effective way to deliver what the market wants. Optimally, the same network that gathers the market information should serve as the first channel of delivery. This is the surest way to guarantee return on the investment made. And from a business standpoint, this strategy is much more attractive than installing expensive new infrastructures. The world of broadband networks will grow, but for most utilities it will likely come in cost-effective stages supported by solid marketing data.
We should keep in mind that no one has yet made a solid business case for what services will ultimately flow on the information superhighways of the future. Tomorrow's cost-effective network solutions for residential, commercial, and industrial markets demand that we roll up our sleeves and analyze the data available today. t
Rob Neilson is vice president of marketing for Itron, Inc.
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