Utilities in the United States can no longer assume that residents will automatically be long-term, loyal customers. Deregulation, community-based energy services, and novel technologies are putting new power into consumers’ hands. Growing ranks of rate-payers across the country can decide how they use energy and what company or technology will provide them with electrons.
Sixteen states and the District of Columbia are deregulated. Community choice aggregation (CCA)—in which local government entities can purchase electricity on behalf of residents—is available in eight states and counting. For progressive utilities, the consequences of this massive shift can and should be viewed as an opportunity—not a threat. The key is to devise and execute cutting-edge programs that provide additional value to customers and thus ensure customer loyalty. Here are five ideas worth considering.
1. Help consumers join the Internet-of-Things (IoT) revolution.
Today’s savvy homeowners are using smart charging stations, smart thermostats, app-controlled lighting, connected appliances, and other WiFi-enabled energy devices to take charge of their behind-the-meter energy use. The intermingling of household devices, connectivity, and data is called the “Internet-of-Things.”
The multi-billion dollar market of these smart home-based energy devices was inspired by geeky early adopters of new technology. However, less tech-savvy mainstream homeowners need a little help in figuring out which connected energy devices to buy, how to take advantage of incentives, and where to sign up for discounted rates. That’s where a utility’s customer-loyalty strategy comes into play.
The Electric Power Research Institute (EPRI) reports that 85 percent of homeowners understand that a smart thermostat saves money on utility bills, but many first-time users of smart thermostats report confusion about installing and using the device.
Utilities to the rescue. Robust info resources and customer-service programs organized by the utility can provide precisely the help consumers need to buy and use energy-saving IoT devices. Those customers will repay the utilities with a higher sense of gratitude and loyalty, in addition to enabling distributed energy resources management system (DERMS) program participation.
2. Establish smart electric vehicle charging programs.
There were about 825,000 battery-electric vehicles on North America roads by the end of 2019. Conservative estimates peg that number to exceed 12 million by 2030. This expanding market means that utilities will increasingly become providers of not only home energy but also transportation “fuel.”
This is a huge opportunity for utilities, but not strictly as a matter of selling more kilowatt-hours of electricity. By providing compelling time-of-use (TOU) EV rates, utilities earn a role as proponents of sustainable transportation, enabling residents and businesses to save more on their monthly electricity bill by charging during off-peak hours. Currently, about half of U.S. investor-owned utilities have optional TOU rates for their residential customers. Many EV owners are passionate about reduced vehicle emissions and will recognize these efforts by utilities.
Last year, Enel X Way partnered with the Smart Electric Power Alliance (SEPA) to survey 3,000 JuiceNet customers across 28 utilities offering EV specific rates on their charging patterns. Our study concluded that EV owners are particularly well-suited for time-varying rates, and 72 percent of non-enrolled TOU customers indicated that they were willing and able to charge their EV during off-peak hours if the standard rate resulted in bill savings and was convenient to use.
Consumers have proven to be fairly price-sensitive when it comes to TOU rate structures, and it was found that for every 10 percent increase in peak to off-peak pricing, off-peak energy usage decreased by 6.5 percent.
More than 20 utilities provide TOU programs that shift EV charging to non-peak hours. Several utilities, such as Hawaiian Electric, give away free EV chargers, like the JuiceBox line of connected chargers. Others help employers by providing faster chargers and better EV rates to encourage workplace charging.
These efforts pay off big-time when it comes to accelerating even more EV adoption because first-time buyers want to make sure they have abundant places to charge. Later on, enrolling the growing legion of new electric vehicle owners in demand response programs becomes much easier.