Utility Web Sites Falling Short

Only 10 percent of regulated electric utilities currently have a significant amount of customer interaction over the Internet, according to a new Xenergy study. The study recommends that regulated utilities use the Internet to improve relationship management with existing customers, vendors and investors, and generate revenue through advertising and referrals.

Xenergy, an energy consulting, information technology and services firm, reviewed more than 100 sites of regulated utilities, their affiliates and new entrants to the energy marketplace. The study found that most Web sites for regulated utilities do not take advantage of opportunities to attract customers, offer services, reduce costs and boost revenue. Only 10 percent of the sites analyzed offered a significant amount of interactive customer services.

“The Web is still an untapped resource for most regulated utilities trying to improve relationship management with existing customers,” said Rich Barnes, Xenergy vice president.

This study comes on the heels of two other studies critical of utility e-business strategies. A recent Andersen Consulting study found that most utility company Web sites lacked the functionality necessary to compete in the online marketplace (“Utilities Lagging in Online Marketplace,” Utility Automation, November 1999). After a similar study in which ENERGY E-COMM.COM ranked 100 energy and utility Web sites, Vinod Dar, ENERGY E-COMM.COM vice president, said, “The good news for the E&U industry is that at least it is discovering e-commerce. The bad news is that, in general, its sites are poor and the gap between its performance and best practice is huge.”

The Xenergy study recommends that utilities take a different path than unregulated companies to Internet profitability. “Selling products or services is not the strategy to pursue,” said Barnes. “Instead, regulated utilities-which attract customers to their sites because of the information available there-can generate revenue by advertising and referrals.”

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