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Community Choice Aggregation (CCA) authorities, also known as Community Choice Energy, provide consumers with local control over their electricity supply. Through energy procurement activities, many CCAs are successful in lowering the cost of energy to their members and offering rate plans with greater renewable energy content than what the community’s traditional electric utility supplier offers. Some CCAs also run self- or third-party funded energy efficiency (EE) programs to help customers lower their energy bills.
Non-bypassable charge (NBC) fees built into utility rates are available to CCAs in California to run EE and low-income programs. CCAs can access NBCs either by applying or electing to administer programs; both options must comply with California Public Utilities Commission (CPUC) policies, and each has advantages and disadvantages.
We are a professional consulting firm that specializes in energy efficiency and advanced energy solutions for residential and commercial buildings, food service, transportation, and next generation grid.
We work with CCAs throughout California to augment their technical and regulatory expertise. We help communities form their CCAs, and work with them to evaluate, choose, and implement EE programs that best serve their communities. Frontier Energy provides support on CPUC-related policies, procedures, auditing and reporting requirements; and helps CCAs conform to CPUC evaluation, measurement, and verification protocols.
Do you have questions or insights on this topic? We’d love to hear from you. Contact us for more information on CCAs and energy efficiency.
In 2018, E Source performed a comprehensive review of 93 midstream and upstream demand-side management (DSM) programs administered by 69 organizations in North America. Our new report explores the new measures that program administrators are moving upstream.
HVAC measures—such as furnaces, air conditioners, and heat pumps—are playing a bigger role in midstream and upstream programs, surpassing lighting’s popularity as a measure within these program types.
Residential lighting programs typically incentivize manufacturers and retailers, while commercial lighting programs typically incentivize distributors and manufacturers.
Customer segments that must replace damaged or broken equipment quickly in order to keep the doors open are good candidates for midstream programs. These businesses, such as restaurants and grocery stores, rely on distributors to get them back up and running.
When considering whether to move a new measure upstream, look for established relationships between contractors and their supply chain; distributors and manufacturers can provide vital information to contractors on how to sell and install these high-efficiency measures.
Many programs feature measures that end users can easily install, such as lighting, residential appliances, and consumer electronics.
If customers can’t purchase an incentivized measure because it isn’t in stock locally, move the measure upstream to encourage stocking and up-sell practices.
Midstream programs give incentives to intermediaries, such as distributors or retailers; upstream programs give incentives to manufacturers. In this study, we included programs that have robust reporting protocols, which means we may not mention some new pilots and programs.
Lighting remains a dominant measure for midstream and upstream programs. Most residential lighting programs go through retailers and manufacturers, while commercial lighting programs go through manufacturers and distributors. As lighting markets transform and baselines rise, utilities are diversifying their midstream and upstream offerings to include several new measures.
HVAC measures are also popular for midstream and upstream programs. In fact, when including heat pumps within the HVAC category, there are more midstream and upstream programs for HVAC than for lighting.
In early 2017, a group set out to measure the behavioural response to personalized thermal imagery and traditional consumption comparisons. A municipally-owned utility in Alberta led the experimental pilot in partnership with Natural Resources Canada, a behavioural science academic team, and MyHEAT.
Correlation between HEAT Ratings and Actual Consumption
While this pilot is currently in the final stages of evaluation, one of the early by-products was the connection made between MyHEAT’s proprietary data and actual consumption information.
MyHEAT offers personalized information on a building’s heat loss to motivate behavioural change and consumer action. Thermal data for each rooftop in a city is grouped and categorized using proprietary machine learning techniques. The result is the creation of HEAT Ratings, a comparative ranking of how buildings are performing in relation to others in the neighbourhood and city on a scale of 1 to 10. Category 1 represents the least amount of measured heat loss and category 10 represents the highest amount of measured heat loss.
The evaluation, led by Dr. Nic Rivers and Dr. Maya Papineau, began by exploring the relationship between building thermal signatures and energy consumption data from single-family homes in the community with approximately 20,000 homes.
Data for this exercise came from three sources:
MyHEAT’s aerial thermal data collected using a high-resolution sensor and proprietary HEAT Ratings,
3 years of natural gas and electrical energy consumption data, and
Publicly available property tax assessment data.
When the thermal data and building size were considered, the results revealed that consumers used approximately 4% less energy for each incremental change in the HEAT Rating unit.
However, many factors influence energy consumption. To address these influences, the academic partners continued with a regression-based analysis. When the academic team used property tax assessment data (such as building type, building age, neighbourhood, etc.) and energy consumption data, they estimated that each incremental change in the thermal signature represented a reduction in gas consumption of 3-5% and a reduction in electricity consumption of 1-1.5%.
Source: Papineau, M & Rivers, N (2019). Visualizing energy efficiency information: Evidence from a randomized controlled intervention. Unpublished raw data.
Thermal data can be collected for entire cities in a few nights from an aircraft 4,000 feet in the air and an accurate measure for thermal efficiency can be derived with machine learning. It is a very cost-effective method to acquire an indicator of thermal efficiency. Compared to a physical inspection, it’s orders of magnitude less.
This also means thermal remote sensing can be used to aid in energy efficiency efforts by providing a cheap thermal efficiency indicator that can be used to:
Identify focus communities for energy efficiency programming,
Measure the impact of energy efficiency programs year over year,
Display efficiency opportunities on a map, combining with other datasets, and
Model energy efficiency potential and opportunities for building stock improvements.
If you’d like to hear more about the results of the behavioural pilot, please send an email to firstname.lastname@example.org. Read more on the MyHEAT blog!
Utility customers have little choice in their power providers, particularly in vertically integrated energy markets. Accordingly, utilities acquire their customers less because of winning customer service, service offerings, or more general forces of competition, and more due to an inelastic demand for energy. Despite a relationship often born out of necessity, the utility still has the duty and the interest to provide reliable, affordable energy and excellent customer service to its customer base.
Demand-side management (DSM) is often overlooked as a mechanism to strengthen utility relationships with commercial and industrial (C&I) customers, yet it often aligns customer preferences for incentives and low energy costs with utilities’ desire to reduce peak demand and power generation costs. This white paper explores the mechanisms by which utilities can implement or improve upon existing DSM programs, with particular focus on the nuances of implementing demand response (DR).
This white paper highlights critical insights for utilities into the implementation of future customer-focused DR programs, given the rapidly changing and distributed energy grid. Utilities with existing DR programs that are either underperforming or otherwise failing to yield desired results may look to the considerations and case studies to strengthen their existing DR portfolio and meet customer needs.
DSM programs are not only overlooked by utilities, but also by utility C&I customers who seek to lower their electricity costs. Despite proactive action on the part of many C&I customers, there is still a profound absence of knowledge about value creation opportunities through participation in one or more DR programs. This white paper is also geared at C&I customers who would like to learn about different types of DR programs and how to maximize benefits through enrollment.
SAN FRANCISCO, June 27, 2019 /PRNewswire/ -- Software designed by Nexant, Smarter Grid Solutions, and GreenSyncare coordinating to create the world's most advanced electricity network management and control system. UK Power Networks supplies electricity to more than 8.3 million homes and businesses and is Great Britain's largest electricity distributor.
Through this combined software solution, UK Power Networks and its customers will receive the following benefits:
More Renewable Energy—Distributed energy resources (DERs) including solar, wind, and energy storage devices will be connected to the grid faster and at less cost, generating enough power for 250,000 homes.
Infrastructure Savings—Reducing the time to connect DERs will reduce the need to upgrade infrastructure and save money. The solution will defer other network upgrades and costs by shifting localized peak demand and providing power during planned and unplanned outages.
Efficiency and Safety—Artificial intelligence will be used to process big data and determine safe and efficient ways to run the network.
Innovative Control Schemes---The network can be seen from a complete view, providing perspective to make complex decisions and set autonomous processes that will optimize available power.
Real-time Control—The network will be able to handle and dispatch services for events such as DER non-compliance and communications failure.
Flexibility—Giving customers expedited flexible connections, enabling more solar and wind installations.
Big Platform Potential—Unlimited smart grid applications and emerging technologies can be applied to the platform, allowing the possibility for more insights via machine learning, AI, and big data analysis.
As part of the integrated platform, Smarter Grid Solutions' ANM Strata will allow UK Power Networks to smoothly make the transition to an active distribution system operator. Nexant is supplying the control center and planning analytics via Grid360 and a public-facing market interface through iEnergy. GreenSync's deX product is incorporated to provide a distributed energy marketplace.
Bob Currie, Chief Technology Officer at Glasgow-based SGS, said, "This is a watershed moment for the management of distribution networks and DERs. We are delighted to work with UK Power Networks to deliver flexibility services markets and innovative control schemes across its license areas to enable clean and distributed energy resources to connect to the grid and realize their full value."
John Dirkman, Vice President of Product Management at Nexant, said, "This cutting edge project broadly enables and revolutionizes decarbonization via electrification, distributed generation, demand response, and energy storage. It's a perfect example of how best-in-class applications can be combined to provide tremendous value to utilities around the world."
Nexant is a premier provider of technology enabled solutions to the Utility and Energy Industry focused on the next generation intelligent grid, distributed energy resources, and the digital customer experience. Nexant's clients include over 200 utility and software services customers and works with over 300 chemical and petroleum majors, financial institutions, and Fortune 500 companies.
About Smarter Grid Solutions
Smarter Grid Solutions (SGS) is a leading provider of distributed resource management system (DERMS) software with over 300 MW of generation and load under real-time control. With offices in New York, Glasgow and London, SGS is a global solutions provider to distribution utilities, distribution network operators and distributed energy resource providers.
About UK Power Networks
UK Power Networks is the country's biggest electricity distributor, making sure the lights stay on for more than eight million homes and businesses across London, the South East and the East of England.
UK Power Networks is committed to providing excellent service to the over 18 million people who use their network every day. The company invests more than £600 million in its electricity networks every year, offers extra help to vulnerable customers at times of need, and is undertaking trials to ensure that electricity networks support the transition to a low carbon future.
In June, UK Power Networks won the 2019 EEI International Edison Award at a ceremony in Philadelphia, United States, for its part in enabling Britain's low carbon transition. The award is billed as the electric power industry's most prestigious honor and the winner is chosen by a panel of former energy company chief executives.
New distributed energy resource technologies and changing customer expectations have created opportunities for growth in the demand side management (DSM) market. Demand response (DR) and energy efficiency programs are an important component in meeting changing regulatory requirements, supporting distributed generation, and delivering new business models and revenue streams. Between 2019 and 2028, Navigant Research expects market growth of DR and energy efficiency programs worldwide; integrated DSM will also generate operational and capital savings for program providers in more mature markets.
Growth in DSM is expected to take place in all regions of the world, with deeper savings in mature markets and new market share in regions with less program penetration. The integration of more intermittent renewables in specific regions is anticipated to look to DSM programs to provide local peak management and load shifting capabilities to the grid. Developments in more efficient, intelligent hardware and program management software are expected to offer streams of data that can be used to optimize both commercial and industrial (C&I) and residential energy ecosystems. Edge computing and data analytics will speed rates of actionable insights for program providers.
This Navigant Research report provides a high level examination of the global DSM market in five major geographic regions: North America, Europe, Asia Pacific, Latin America, and the Middle East & Africa. The study provides an analysis of market trends, including the drivers and barriers associated with global DSM development. Global market forecasts for electric DSM capacity, sites, and spending are segmented by region and extend through 2028. The report also examines technology issues and key industry players.
In this week’s UtilityXpert roundup, we chat with Brett Bishop of Build it Green , Build It Green (BIG), an environmental nonprofit based in Oakland, California with a mission to create a world of healthy and sustainable home for all people. They are pioneering how homes are built and renovated in California and beyond.
In this article, we’ll talk about Brett’s experience helping energy providers implement sustainable, effective EE programs. Brett has a wealth of experience and his passion really comes through when discussing some of the industry’s most challenge issues, including aggressive energy targets, as well as implementation tactics.
1 You've had a variety of experience designing and implementing all different types of EE programs. Tell us about your approach at the beginning to ensure a holistic plan is built.
We are passionate about bringing innovation to the market and inspired to support consumers, professionals, private companies, and public agencies to achieve the greatest impact. We mainly focus on three goals:
Driving deep reductions in carbon emissions by connecting more homes to clean power and advanced energy technologies
Creating a real estate market that recognizes the value of these homes and ensuring that these benefits are accessible and affordable to all communities
Creating healthy and sustainable homes for people in low-income communities.
All these approaches combine for a holistic plan because having these specific goals in mind makes it easier to achieve and track our successes in our various programs.
2 Tell us about the different nuances of implementing different programs in different communities?
It really comes down to knowing what the community we are trying to help needs from multiple perspectives. For instance for our Cool Savers program, the first Pay-for-Performance programs of its kind, we really wanted the focus on customers that want to save more energy! That’s what it’s structured to emphasize, that’s why participants become a stakeholder in the success of the program, and that’s why we added the Cool Rewards bonus system to the program, which allows participants to earn cash bonuses for being a deep energy saver.
(Cool Savers participants who save the most energy over a 12-month period are eligible for a bonus incentive up to $1,000.)
With our Healthy Home Connect program, we structured the program to leverage multiple funding sources to deliver energy and healthy home upgrades simultaneously to benefit California’s most vulnerable or disadvantaged communities, with both energy burden and regional air pollution being factored from the outset.
The Healthy Home Connect (HHC) program has successfully expanded into new communities, thanks to generous funding from our partners like Peninsula Clean Energy and private equities such as Facebook, Inc. BIG is delivering health and energy upgrades to families faced with hardships in the Belle Haven community, and Menlo Park near Facebook’s HQ. These homes would otherwise not benefit from existing energy efficiency programs because they needed much more basic repairs first. For example, one home had their entire ceiling removed in the hallway, completely open to the attic space, all year round! She was over eighty years old and clearly needed more than just LED light bulbs and faucet aerators. Typically, program administrators are unaware of such egregious conditions because there is no budget for measures outside of demand reduction or they choose not to get close to the work.
There is a strong link between health and energy efficiency in homes: energy upgrades often provide health co-benefits and we are working to unlock both of these benefits homeowners.
Housing services are often siloed and delivered to meet program performance metrics alone. Energy efficiency and weatherization programs do not address home health conditions, which are often closely related. Furthermore, many homes are disqualified from receiving energy efficiency and solar PV improvements because of existing conditions in the home, such as mould, moisture, unsafe HVAC systems leaking carbon monoxide, or dilapidated roofs.
The result is that some of the most vulnerable families are left behind and must live in homes that exacerbate asthma and other health conditions, as well as homes that are inefficient with high utility bills, contributing to displacement and the affordable housing crisis. Healthy Home Connect addresses these problems by combining public funding sources with private philanthropy and delivering health and energy efficiency together, intentionally. Exactly like everything else in the efficiency field, it demands a conscientious front side to each project and detailed project management.
BIG also worked closely with their local, like-minded, non-profit builder/partner El-Concilio of San Mateo, to establish relationships, trust within the community, and help fulfill the work and mission of the Program.
3 How do you approach getting buy-in for your recommendations at every step of the implementation process (ex. IT teams, DSM teams)?
The billion dollar question! Ultimately, it is about having the right team lined up around a future state. Which begins with the client, their objectives, and design constraints. Once these conditions have been identified and communicated market analysis drives the conversation. Build It Green is always conscientious to bring our workforce into this part of the design process; ultimately, if the market does not buy into your value proposition you are going to have a difficult time getting your program off the ground.
Once the interventions are established as to technologies and engagement platforms, the marketing team can begin designing a narrative that is relatable. As with any organization, having the right team on your side is key. Having a team that is aligned with the vision of the company’s core objectives results in an effort that communicates consistency across different departments and specializations. To steal a phrase from the sports world, it’s about “building your bench” which has to begin long before a project is even dreamed of.
4 California has lofty energy efficiency savings targets for 2030. How will it get there?
We have visions for 2030 that are aggressive, it's true, 2045 is even more so with a target for net carbon neutrality across our entire economy. It’s going to be a large effort with a lot of stakeholders and factors that are dynamic. One example that illustrates this well is California’s Renewable Portfolio Standard, our grid is more and more decarbonized with every passing year, so energy storage and shifting consumption to times of the day when the sun is producing our power are a big part of shifting the economy away from dependence on fossil fuels.
Energy Efficiency is crucial to the effectiveness of these efforts because if consumption of energy is unchecked, then the cost to produce the energy tracks the demand curve. Think of it on a smaller scale, a house that is efficient may need twenty solar panels; the same home without efficiency measures may need thirty panels to achieve an energy bill of zero. Less is definitely more. One phrase I really enjoy it, “the cheapest electron is the one you don’t use.”
I think the biggest challenge is going to be psychological. People are attached to their habits and don’t necessarily perceive them as such. One example of this is induction cooking. The technology has far superior performance compared to gas. I love cooking a lot and eating good food even more! It took me a while to get to a place where I could install an induction rage because my home is older and was set up for gas, but once I got it done I found was that I had a much greater level of control over temperature and everything heats up dramatically faster. It’s super nice, easy to clean, it performs better, and doesn’t put exhaust into my kitchen. Going back would feel like making dinner in the garage with the door closed and the car running! But until consciousness around these shifts, people will be espoused to antiquated technology.
All that circles back to decarbonization because utilizing renewables effectively is dependent on multiple systems like space and water heating, cooking, laundry, etc. Efficiency allows us to do the same things as we were doing before, hopefully, better, while consuming fewer resources. That’s the value proposition we need to convey, “your quality of life will improve if you get with the program,” otherwise there’s no reason to do anything different than you did yesterday. The horse and carriage were replaced with the car, the landline replaced with cellular, we have superior and sustainable technologies today, so the question is not if, but how, and by when. That’s where California is rightly focusing today.
Encouraging homeowners to make retrofits when they aren't thinking about them is difficult. What could be easier is doing so when energy efficiency (EE) is top-of-mind for them.
The question is: "When are people thinking about energy efficiency?".
The answer? When they are moving into a new home.
In fact, USA Today rates “Improving energy efficiency” as the number one upgrade you can make to increase the value of your home. For example, a Remodeling.com survey found that homeowners could recoup 116% of the costs of attic insulation.
Homeowners are increasingly aware that HVAC, water heaters and window upgrades are cost-effective changes that provide a solid ROI when it comes time to move or sell.
Despite this interest, this is an issue for utilities. Even if people are willing to make energy efficient upgrades, this does not eliminate the big problem of free ridership rate among their customer base. Free ridership, is of course, the degree to which energy efficiency program participants take incentives for projects which would have been done with or without the program.
Getting more program participation while reducing free ridership rate. In fact, on their own, they are both issues that the utility world has not seemed to figure out yet. Of course, for some states, there’s less of an emphasis on free ridership, but the fact remains that utilities must get their customers to participate in energy efficiency programs.
So, how can utilities get more people to make energy efficient retrofits, while actually showing that they influenced those decisions?
Answer: By targeting homeowners who are likely to move or sell their home!
These homeowners are the perfect candidates for EE programming. Why? They recently bought a new house, and want to ensure their new asset is as valuable as possible. Their family is moving in, and they want to sure its comfort and livability.
A disgruntled homeowner who's used to what they're living in? Not happy when you tell them about a $2,500 HVAC incentive.
A new homeowner who's told about a free Smart Thermostat? They'll be thanking you, because that’s could raise the value of their asset.
There are a plethora of ways utility program managers may be able to do this, and some of them are listed below:
Digital Marketing: Online platforms such as Facebook and Google allow you to show your ads to specific people who are in your likely range of people who want to move. With Facebook, you can actually use Interest targeting and ask Facebook to show your ads to people who are most likely to be moving. The ad might say something like, “Selling your home or moving? Learn how a new HVAC can increase your home property value by XX%!”
A message like this would really resonate with the homeowner who is moving or selling their home.
Surveys and Direct Mail: Another way of knowing what your customers are doing? Ask them!
Short online surveys done via SurveyMonkey, or paper mail ones are an easy, effective way of figuring out which of your customers are moving, or not. You know that any customers that identifies that they may be thinking of moving would likely be interested in energy efficiency retrofits. Therefore, these individuals would be great candidates for marketing efforts down the line.
The drawback of this method? It is rather time consuming, low-tech and sometimes, people just don’t want to be bothered.
Implementing New-Age Software-As-a-Service (SaaS) Products: SaaS. It's not as complicated as it sounds. People have long dismissed utility engagement tactics as dated and low-tech, but that is simply no longer the case. Technology solutions such as MyEnergyXpert are able to take data science and AI, and integrate them with online platforms to identify homes that are ripe for participation.
The technology exists where people will now be able to target homeowners who are most likely to enrol and when they want to enrol.
Utility program managers can now look like geniuses - people are participating because of them, and they can easily track why and how.
It's time to flip the script on utility customer engagement for energy efficiency programs.
Sending customers 50-page unwanted home energy reports? There's no need.
Dealing with contractors for complicated home audits? Forget about that. Wasting marketing and customer care budget on campaigns that won't work? Those days are over.
Giving customers personalized recommendations right when they need it? Sign them, and us, up.
In this week’s UtilityXpert Roundup, Entergy’s VP declares that grid changes are needed, and only IoT and advanced data analytics can help us along. Elsewhere, EE programs are improving all across the nation, green power is in demand, and Dominion keeps one of their major projects going. As usual, it’s been a busy week in the utility world.
Delivering electricity to 2.9 million customers in Louisiana, Mississippi, Arkansas and Texas, Entergy is implementing advanced data analytics and internet-of-things technology across all its divisions. This article features a sit down with Entergy VP, Raiford Smith.
Utility programs are a valuable and growing resource to the affordable housing community. According to ACEEE’s 2018 State Energy Efficiency Scorecard, utilities across the U.S. dedicated $7.9 billion to energy efficiency programs in 2017 alone. Likewise, utility investments designated for affordable multifamily programs have grown significantly over the past five years, and the gap between affordable multifamily’s share of the residential market and their share of utility residential investment is beginning to close in many states.
Dominion's deal with Eversource and United Illuminating puts an end to speculation over Connecticut's sole nuclear plant, which the company had said would close if it did not secure a contract by today, March 15.
The 10 year deal will cover 9 million MWh of output annually, more than half of the plant's annual output of about 16.5 million MWh. Connecticut regulators selected the rest of Millstone's output as part of a clean energy solicitation last year.
A new high efficiency, ultra-low emissions commercial water heating and space cooling unit, which begins field demonstrations at two Southern California restaurants this week, could dish out energy savings, lower operating costs, and reduce greenhouse gas emissions for foodservice and hospitality facility operators.
That’s according to Stone Mountain Technologies, Inc. (SMTI), maker of the new technology, which uses a thermally driven heat pump fuelled by natural gas or propane to capture ambient energy, achieving a heating efficiency of 140% or greater. It is projected to reduce energy use by 30 to 50% compared to standard natural gas water heaters. The highly-efficient heat pump also provides space cooling simultaneously, which reduces the need for air conditioning and can help lessen electricity use.
In the UtilityXpert roundups, we typically find the industry’s best news and share it among our audience. This week ask industry experts and thought leaders a few questions and heard their answers on what should drive the utility industry forward.
We’re all busy and want quick reads that give us interesting and actionable things to think about so we’re keep it simple – two questions, two unique answers.
Our first instalment comes from a veteran marketer with over 25 years of experience marketing everything from fast cars, to rock n’ roll, to helping rebuild one of the largest online retailers in the world. His energy sector pedigree is equally impressive.
We invited Jason Turner, Co-Founder of ID Lab, one of the energy sector’s fastest growing marketing and strategy agencies, to kick off our UtilityXpert series.
He’ll be talking about the challenges of marketing for, and with utilities. Here’s what he had to say.
Often, utility marketing and communications is thought of as being far behind other sectors. They compare utilities to consumer products and services companies in the private sector and admonishing the utilities and citing their insufficient use of technology. Why do you think that is?
This perception of utilities is untrue and, in many cases, naive. Too often I hear ill-informed analysts labeling utilities as uncaring, unskilled or lacking innovation when it comes to marketing and communications. For the vast majority of the utilities ID Lab works with this is simply not the case.
Here’s the reality…utility marketers and communicators are trying to get by with what they have. It’s true most utilities lack the marketing technologies needed to effectively compete in what’s becoming a fast moving and competitive market (this market change is new for utilities) – this is undeniable and for the utility marketing and communications departments it’s very frustrating. They know there are better technologies out there, like EnergyX, that could make a world of difference to their marketing efforts. They want to innovate, they want to better target their customers and they want to be more efficient with their marketing spends. They get it and know the path they need to take. However, they have some big obstacles. Some of the biggest obstacles we regularly see at ID are:
IT Support/Capacity: Utilities are notoriously understaffed in IT. Asking IT to implement a new integrated marketing tool takes 1 to 3 years (optimistically).
Budget: Regulators of all types across the country are squeezing and scrutinizing how utilities use ratepayer dollars. Regulators often don’t understand what it truly takes from marketing and communications to motivate customers to save energy and change their behavior help to improve the utilities’ overall cost effectiveness so they are making spending on marketing technologies excessively difficult. Because of this regulator limitation, and other budgetary issues, marketing and communications departments struggle to get the funding they need to engage the technologies that will enable them to the job they know they need to do.
Implementers: Most utilities give the bulk of their program/product/service marketing to implementers and hope that the implementers are using the latest tools and techniques to effectively market on their behalf. Because the utilities are getting their budgets squeezed they, in turn, squeeze implementers which limits the implementer’s budget to spend on the latest tools and technologies. It’s a tough circle that both of them have gotten locked into.
Can these issues be overcome and, if so, how?
There’s no denying that everyone involved is currently in a, what seems to be, perpetual cycle that leaves everyone stuck with the dated status quo.
The good news is that there is a way out for most utilities: deploy SaaS-based tools. Specifically, SaaS marketing and targeting tools that are easily shared and managed across internal and external marketing teams.
I recognize the implications of what I’m saying, and I know that many of those reading this will immediately jump to obstacles like security, customer data privacy, legacy systems, IT department capacity, budget and a host of other obstacles. They are all, somewhat, legitimate but not insurmountable and quite frankly, inaction is not an option. We see the mounting competitive pressure on utilities and we also see that customers are becoming more disenchanted with utilities because most other companies are engaging them so much better than utilities can. Because we did s a lot of consumer products marketing in the private sector, we know what tools it takes to satisfy customers, so we share our utilities clients worry about the future of customer engagement. Also, marketing inefficiencies only get exponentially worse with inadequate tools/technologies because the resources required to compensate for those tools increases as market pressures mount making the TCO (total cost of ownership) untenable.
Look at businesses as straightforward as pizza companies. They have a fraction of the revenue and resources that utilities have yet their use of technologies (marketing automation, robots, self-driving deliver cars, apps, etc.) is lightyears ahead. Look at Domino’s – they’re so dedicated to using technology that they have an 800-person tech team for a company that is half the size of most utilities. Yes, they have simpler business models; so look at highly complex and data-sensitive companies like Blue Cross – same scenario – safely and securely exploiting advanced marketing technologies. Air travel, pizza, healthcare and a host of others are all successfully using modern SaaS-based marketing tools. Today’s reputable SaaS vendors have risen to the challenges utilities face when it comes to safety and security and have platforms that meet utility requirements.
When it comes to working with IT, that’s a tough one. Most utilities’ IT departments are understaffed so, and I don’t blame them, their immediate answer to new technology requests is “no” or “ok, we can put that on the schedule to look at next year”. One thing that’s worked for us are time studies. We work with the utility IT department, a vendor like EnergyX and marketing departments to look at what the TCO (total cost of ownership) is for the current technology compared to the proposed through examining how much time/resources is required to use/maintain the current technology versus the proposed. In the vast majority of cases the new technology ends up saving IT significant effort, time and money.
Surprisingly, cost often meets with the greatest initial resistance but is overcome the quickest. How, by proving out the MROI and/or ROI. If the utility has marketing program performance metrics (by channel), marketing-related costs, market potential, marketing technology support costs and a cursory understanding of consumer behaviour a MROI can be made between current and proposed technologies. If the marketing metrics are not readily available, a simple ROI can be calculated. In ID’s experience the new technology usually wins hands down.