Editor in chief
I’ve heard it many times in the past couple of years, and I’m sure you have, too: The electric utility industry is in the midst of significant change. Many utility executives say it has changed more in the last five years than in the previous 100. Technology, customer expectations, regulation and policy are driving changes at a rate that is making it hard for utilities to keep up and adapt. It’s clear that this fast-paced change will continue for some time.
I recently attended the CS Week Conference in Phoenix where I heard Dan Froetscher, senior vice president transmission, distribution and customers at Arizona Public Service (APS), speak about the changes at APS. More than 40,000 of the company’s residential customers have installed rooftop solar panels and APS is adding about 1,000 customers to that number every month, Froetscher said.
“That coupled with our energy efficiency programs, which also are increasing rapidly, show that the traditional electric utility revenue model will no longer work,” he said.
Froetscher pointed out that APS must continue to provide, operate and maintain its infrastructure even as it sees many of its customers’ electricity use decline; therefore, the costs associated with the infrastructure remain the same.
He believes utilities have two choices: fight or facilitate. APS chose to facilitate the changes. Froetscher said the utility has become a solutions partner with its customers. It offers time-of-use and demand rates, solar sales and installation services, energy-use analysis, duct tests and repair services, air conditioner tune-ups and more. APS has also created a solar partner program that allows it to lease its customers’ roofs for rooftop solar installations. APS owns the energy generated from these installations and can dispatch it as it sees fit. Participating customers receive credits totaling $360 a year on their bills.
Froetscher emphasized that customers want choices and they want things to be simple, easy and convenient for them. He said APS is working to meet those requirements. Its customer offerings don’t just improve customer satisfaction, they allow the utility to build stronger relationships with its customers, create new revenue streams and impact customers’ usage behavior. All of this helps APS to better control peak energy use and reduce capital investment.
APS is just one of many utilities that elected to facilitate change rather than fight it. Most utility executives realize that change is coming and they must adapt. We at POWERGRID International will continue to cover the latest trends and technologies that are allowing electric utilities to be facilitators, not fighters.