When I look at the various stories in this issue, I’m reminded that it takes many businesses within a business to operate and maintain a utility. In the cover story on vegetation management, Stephen Cieslewicz writes about pending legislation that could help utilities better manage their rights of way on federal lands. In another feature article, Strategy&’s Tom Flaherty talks about the need for utilities to innovate to remain successful. The generation section contains an article about the future of gas-fired generation, as well as a fun story from We Energies about its wildlife program that is increasing North America’s peregrine falcon population. These are just a few of the many stories in this issue, covering the many businesses that are part of the utility repertoire.
As the digital age continues to unfold, it’s clear that the utility repertoire must continue to grow. Smart phones enable immediate connection to most any and everything. Consumers have grown to expect instant information and interaction with businesses and any business that can’t provide that information is at risk of being replaced by one that can. Digitally connected customers are here to stay and their numbers are growing.
I recently spoke with Jack Azagury, who leads Accenture’s North America’s utilities business, about the new digitally connected energy consumer. Azagury said these consumers create some challenges for utilities, but also provide substantial opportunities for them. Accenture recently released the sixth edition of its report titled “The New Energy Consumer-Unleashing Business Value in a Digital World,” which reveals consumers who are heavy digital users trust their energy provider and are interested in obtaining more services from them. These consumers indicate they are interested in obtaining home security services, home equipment/appliance insurance and repair services, energy efficiency programs and more from their incumbent utility. Accenture’s research shows that digitally connected energy consumers are more satisfied with and trusting of their electricity providers than their lesser connected counterparts. Not only are these consumers inclined to buy more from their utility, they indicate they also are willing to share more personal information with them. They trust their utility to protect that information. And, perhaps the best news is these digitally connected customers are less likely to shift their business away from their incumbent utility if that utility can provide what they want.
This seemingly loyal customer base is a great foundation for utilities to build new products and services that can provide new revenue. The caveat is, however, they must capitalize on these opportunities now.
Azagury said utilities lag behind many industries when it comes to connecting to their customers through digital channels. They have only a short time to catch up to other industries, including those that aim to be their competition, he said.
It’s not surprising that Accenture’s research reveals digitally connected customers want to connect with their utility through digital channels. They want information at their fingertips 24/7. These customers want mobile apps that will allow them to monitor and control their energy use, sign up for new services and offerings, pay their bills and see how their energy use compares to their neighbors and friends.
Many apps already exist and many others are under development, so there is no reason that utilities can’t give these consumers what they want. Azagury warned, however, that any app that’s introduced must be well designed up front. “Utilities get only one chance to connect through an app, it needs to be right in the beginning,” he said.
When you boil it down, the various businesses within a business ensure that a utility can produce and deliver affordable, safe and reliable electricity to all its customers. For decades, that was enough to satisfy customers, but times are quickly changing. Customers today are better educated about energy use, more demanding than in the past and digitally connected. The digital age creates opportunities for utilities to excel in the customer service arena and add another important business to their repertoire. They can’t procrastinate, however. Azagury said utilities must act now or another business will move in a take their loyal, trusting, digitally-connected customers.
Teresa Hansen, editor in chief