Energy companies that lead boldly will define the new unknown

Each business sector in our economy is uniquely impacted by the shifts in consumer behavior triggered by the current confluence of pandemic, economic upheaval, political turmoil and civil unrest. The impact on the utility industry is both immediate and long-term, with implications from customer relationships to infrastructure.  As the economy begins to reopen and consumption slowly re-aligns, it is crucial for energy companies to acknowledge that consumer behavior will not be the same. We may be comforted thinking about “when things get back to normal,” but in reality, there will be no return to our previous understanding of normal. Because of that, it is imperative for the utility industry to think about likely future scenarios.

All politics is local, but all finance is personal. While total energy demand has decreased, the individual consumer experience has been different. Personal energy demand that would normally be distributed across multiple locations in one’s daily life (workplace, restaurants, schools, stores, etc.) is now largely centered in one’s own home. To the residential customer, this has meant higher bills as consumers have taken on direct financial responsibility for a larger portion of their consumption. As summer dawns and more states reopen their economies, the public is again venturing out – to work, shop, eat and perhaps travel, leading to increased consumption out of the home, likely without a commensurate residential shift. 

Consumer and business behaviors, plans and long term perspective are altered. So what lies ahead for the utility sector? The challenges are many, but so are the opportunities.

Homeward Bound

The concept of one’s home as their castle has taken on greater meaning in recent months and will continue regardless of what the rest of 2020 brings in terms of potential economic resurgence. For the majority of Americans, the home will continue to serve as a safe and secure space from which to manage more aspects of life and to be prepared for the next emergency. 

Consequently, many will seek a bit more living space. They may not have to commute as often as in the pre-2020 era, so that home-based school/office/retail delivery center can be more distant from a population center. This may also offer a greater feeling of health and safety with fewer neighbors in close proximity. 

More distant suburbs will be seen as a refuge. The move toward densification and its related energy-efficiency will be at odds with personal safety and public health concerns. The longer it takes for vaccines and precautionary healthcare infrastructure to be developed, the more people will be attracted to less dense living environments. Energy infrastructure will have to quickly adapt in response. Demand shifts clearly impact generation-to-distribution systems, but also public affairs, community relations and every area of customer communications. 

Conversely, commercial spaces will likely lay dormant for some time or shift to flex and multi-use formats. Manufacturing may relocate as states eager to rebuild their economies compete for business with tax incentives and regulatory ease. Where go the jobs so go the people, arriving with a new set of expectations. New residential real estate developments will feature safety, space and full-life capacity as we move forward. Remote communities will grow, requiring new infrastructure and outreach efforts, straining utility operations, and public affairs capacity.

The decreased emissions of the quarantine period have had environmental benefits. While the impacts have been compared to a drop in the ocean, they have been lauded for demonstrating potential. This will reinvigorate eco-conscious initiatives and embolden the clean-energy discussion. While this may be interpreted as a boon for electrification initiatives, consumers now have an increased fear of scarcity. They will likely demand dual-source households both as a matter of personal choice and to hedge against unknown future interruptions. Their sense of self-reliance has also increased which will likely drive greater interest in home generation and storage options.

The New Unknown

In years to come, 2020 will be the dividing line between the old normal and the new approach. For now, we are navigating the unknown that will eventually lead to a new understanding – normal remains in flux and will be redefined over time. Along the way, the energy industry will be impacted in terms of demand shifts, customer service inquiries, consumer experience expectations, program requirements and infrastructure development. 

As residential customers are recognizing an expanded role of the home in their lives, safe, affordable, dependable and convenient energy is a clear value. For business customers, large and small, they will need to adapt their models to enhance resiliency. They will seek partnership, guidance, flexibility and innovation from their energy providers. Driven by the bottom line as never before, their interest in efficiency and conservation will increase. While the economy struggles on a macro level, customers experience this crisis in personal ways. Their focus shifts from aspirational concepts to the practical. It is in that space that utilities have a clear advantage. Energy is directly associated with our basic human drives for shelter, food and comfort. The relationship you enjoy with customers and the community can evolve in positive ways if you are proactive partners in their journey. The energy brands that lead boldly and humanely, helping their customers feel appreciated and secure, will define the new future.

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A bilingual world traveler, Donnie brings 25 years of multicultural and international marketing expertise from both agency and client-side roles. Focusing on the integration of communications across segments and channels, he has led multi-lingual efforts in energy, retail, financial services, automotive and healthcare categories for Fortune 100 companies in the US and Latin America. In 2020, Donnie was named CEO of Acento Advertising, a premier US cross-cultural communications shop.  A strong believer in the consultative role of agencies, he not only provides senior client consultation, but has built an agency structure to ensure active integration of diverse segment consumer insights, industry best practices and brand imperatives. Prior to joining Acento in 2011, Donnie managed communication strategy and corporate positioning for Edison International, integrating stakeholder, employee and consumer efforts across all audiences. A native of rural Texas, Donnie studied International Relations and Latin American studies at Georgetown University.  He has lived and worked across the US and Chile. Part of a multi-racial family, he now makes his home in Los Angeles with his husband and menagerie of animals.

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