Senior staff at US gas, water and electric utilities differ in opinion over how much the utility business model will change in the next 10 years.
This was according to a panel discussion at Itron Utility Week held in Los Angeles last week.
Under a session title of ‘What will the utility business model look like in 2025?’, Michel Gevry, VP Global Utilities at Capgemini, told the audience at Itron Utility Week that a decade is “short term. Strategic changes takes 20 years but technology changes are happening now.”
Expanding on the subject of how the utility business model will change, Mr Gevry said: “Utilities need to ask themselves how fast can you change within your own organisation? They need to do it now.”
Roger Schwecke, vice president, Customer Solutions, at Sempra Energy, a natural gas utility for San Diego, California, agreed that 10 years won’t produce a significant change and will not mirror the transformation of the telecoms industry over the past decade.
Electric utilities are changing faster with the installation of rooftop solar but Mr Schwecke said “on the gas side, we are starting to change. We are looking at how to build and maintain a system that can accommodate distributed generation.
“We also looking at natural gas vehicles but the question for us is how we service that kind of load.”
Schwecke also said Sempra is working with water utilities to see how they can use their grid to support the deployment of advanced meters.
He added: “We have space so why not allow others to use that space?”
Meanwhile, Roger Woodworth, vice president and chief strategy officer at Avista, a Washington-based electricity and gas company, expects the utility business model to be “very different” by 2025.
“Technology is equipping the customer to do more things that influence our system so the idea of a relational or personalised system is in our future and that could make things very different.”
Mr Woodworth also spoke about data and the concept of radical efficiency.
“Data is potentially a massive asset but the question is what we do with it. Radical efficiency will come into play where we get better at doing what we already do and reduce the cost of doing more.”
Operational utility challenges
On the question of identifying their biggest internal challenges, Woodworth spoke of the step changes that the industry is going through in terms of technology and demography, which are “influential on customers and their expectations but also on our workforce”.
Picking up on the subject of employees, Schwecke at Sempra Energy said that although utilities are attracting younger talent to work within the organisation, the challenge is retaining them.
Schwecke said: “As we’re focusing more on customers and new technologies, we’re attracting younger, more ambitious, more entrepreneurial people.
“Finding solutions to renewable power, particularly in California, makes it interesting for them and we can provide the flexibility that they’d get at tech start-up with the stability of an established utility.
“Keeping that generation of employees is going to be the next challenge. We may have to accept they’re only going to be around for two years.”
To ensure staff feel more included in operational process at San Diego Water, Mike Vogl, deputy public utilities director, Customer Support Division commented on how the water and sewage agency has created an Emerging Issues Council to give the “less jaded/more optimistic” employees a change to be involved.
Itron Utility Week – consumer trends
In other presentations made during the Itron Utility Week, US consumer trend expert Kelly Macdonald has called upon utilities to engage in the ‘pilot fish’ business model to improve customer experience.
Macdonald said utilities need to identify opinion leaders in the energy industry, engage in dialogue with them to identify needs of consumers so as to make informed decisions in the implementation of measures to adjust to smart grids.
In her presentation ‘Crafting the customer experience for people not like you’ which included services valued by customers, Macdonald gave five recommendations that utilities need to implement to enhance customer service.
- Fully utilize social media platforms to enhance communication with customers including regular updating of the platforms
- Engage in projects that benefit the society-social involvement
- ‘Pilot fish’ identification and utilisation
- Control of customer experience
- Tweak services to fit consumer needs
Macdonald identified things valued by customers as:
- Speed and efficiency
- Advice and guidance
- Local firms implementing greener and environmentally friendly initiatives
- Organizations improving the society
- Testimonials and customer review
- Technology trends and comfort
- Employee personality