Offer Choices
David Boonin is president of TBG Consulting and has over forty years of experience as a public utility economist synchronizing the interests of utilities, regulators and other stakeholders in the electric, gas, water and transit industries. Boonin served as a principal for the National Regulatory Research Institute, member of the Philadelphia Gas Commission, chief economist at the Pennsylvania Public Commission, and corporate economist for United Illuminating.
I'm from the government and I'm here to help! One size fits all! These are two of the world's most common lies.
So why do we often accept one-size-fits-all tariffs for utility service? The one size is usually, "Buy as much as you want, whenever you want. And pay for it the following month."
What if transportation services were provided this way? Don't take a bus. You may only take a limo and pay for it next month.
What about restaurants? No four-star restaurants. Just McDonalds. This is not good business.
Back to energy. Why must everyone buy limousine service and just a Lincoln limousine - no variety? Yes, there are some opt-in programs like time-of-use or interruptible rates, but nothing very widespread. Gas and electric choice was supposed to change this. Other than a few places that now allow electronic billing and/or payments and green options, what new sizes are offered?
Here are some potential other sizes.
Pre-paid meters. The technology is there. No need to bill, collect or dun. Customers trade this minor inconvenience for a discount.
Paperless bills and payments. Bills issued and paid electronically. No stamps, no envelopes, no clerks. Greater payment rates. Offer a discount and superior service. Wow!