Keeping the lights on is getting more complicated day by day for those who run our distribution utilities. For one thing, it\u2019s more expensive, and customers don\u2019t like that. Plus, there are more intermittent generation resources coming online. At the same time, there\u2019s an onslaught of electric vehicle charging load ahead, which may force new investments in grid assets. Now we\u2019re back to the issue of rates again.<\/p>\n
Given these pressures, utilities are facing a host of challenges that will require more collaboration with customers than ever before. One way to build a utility-consumer partnership is through consumer engagement. Below, you\u2019ll learn why and how utilities should amp up their consumer engagement efforts.<\/p>\n
Let\u2019s start by taking a closer look at the trends impacting power providers today. The first thing your customers are probably noticing is the price of electricity. It surged more than 14% last year compared to 2021 prices while overall increases in prices only rose 6.5%, according to the U.S. Bureau of Labor Statistics<\/a>.<\/p>\n Electricity rate increases aren\u2019t over, either. The U.S. Energy Information Administratio<\/a>n (EIA) expects average residential electricity rates across the country to reach 15.66 cents per kilowatt-hour, up from 13.66 cents per kWh in 2021.<\/p>\n Not surprisingly, rate increases like those are a punch in the wallet to people who own electric vehicles, and satisfaction with the cost of charging has declined<\/a> by as much as 30 points on a 1,000-point scale this past year, according to researchers at J.D. Power.<\/p>\n Worse, only 51% of EV owners told the J.D. Power team they were aware of utility programs related to charging their cars at home. \u201cCustomers are looking to utility companies to help manage rising costs,\u201d said Adrian Chung, director of utilities intelligence at J.D. Power. \u201cBy increasing awareness of available rebates or incentives, EV owners will benefit.\u201d<\/p>\n So will utilities. Helping customers keep charging costs low will support EV adoption. If utilities can get consumers to charge off-peak, it will also help utilities manage grid impacts from EV charging loads.<\/p>\n Of course, EVs aren\u2019t the only distributed energy resource utilities are having to manage now, nor are they the only trend that makes consumer engagement more important than it was a few years ago. Because there is growth ahead for both grid-scale and residential solar as well as new wind capacity coming online, utilities will have more generation intermittency to manage. The EIA expects to see about 7 gigawatts (GW) of new wind capacity and 29 GW of new solar PV<\/a> capacity being installed in 2023. With these additions, renewable energy resources other than hydropower will account for 19% of generation in 2024 compared with 15% in 2022.<\/p>\n For the planet, this is good news. Yet another trend impacting utilities is the increasing environmental awareness of their customers. EY’s Energy Consumer Survey<\/a> gathered input from more than 70,000 consumers in 18 markets. Among the results of this study, you\u2019ll find that 76% of survey respondents expect their energy supplier to support their efforts in reducing energy costs through advice and information, 61% say they want to reduce their impact on the environment and 65% have increased their interest in monitoring their energy usage.<\/p>\n If those responses don\u2019t get you thinking about digital tools to help consumers save or shift energy consumption, consider this. The youngest millennials \u2013 the first generation of digital natives or people who grew up in the information age \u2013 are now 27. They\u2019re homeowners, renters, and power company customers. Do you want to get them more engaged with your utility? There\u2019s an app for that.<\/p>\n Finding the right digital tools for effective customer engagement will help utilities deliver on those wants EY uncovered. The right tools can support consumers in their efforts to reduce energy costs, help your organization provide the kind of energy information and advice that empowers consumers, and encourage more participation in your demand management rates and programs.<\/p>\n What exactly is customer engagement? The marketing technology company HubSpot defines it<\/a> as \u201cthe process of interacting with customers through a variety of channels in order to strengthen your relationship.\u201d<\/p>\n What does utility engagement look like? An engaged consumer will participate in special rate offerings, seek out information on your utility website and participate in rebate programs. An engaged consumer will be more likely to understand or at least be interested in energy issues and technology and support utility initiatives. Given that J.D. Power<\/a> has found correlations between digital engagement and higher customer satisfaction, an engaged consumer is also more likely to be happy with his or her utility than a consumer who isn\u2019t engaged.<\/p>\n For utilities that want to engage their customer base, a phone-based, information-rich app like the one Sense<\/a> provides makes a smart addition to utility services. This approach has several advantages:<\/p>\n As of 2021, Pew Research Center found that 85% of U.S. households had a smartphone capable of running apps. This number includes 76% of households earning less than $30,000 annually.<\/p>\n The U.S. Dept. of Energy estimates that the average low-income household spends 8.6% of its income on energy, a figure that\u2019s three times higher than the energy burden of non-low-income households. For some low-income homes, the energy burden runs as high as 30% of income.<\/p>\n Given that 44% of U.S. households are defined as low-income, phone-based apps that provide real-time energy consumption data could have an enormous impact on the households<\/a> struggling most with electricity costs today. The Sense app<\/a> empowers consumers to see what household device or appliance is using energy and make smart consumption decisions.<\/p>\n Most energy data applications give consumers a look at their consumption in 15-minute increments and on a household-level basis. Worse, the data is often days, weeks, or even months old. That type of data may be interesting for a while, but it doesn\u2019t give consumers the information they need to make smart consumption decisions.<\/p>\n What consumers need is real-time data on an appliance-level basis so they can see exactly what device or appliance in the home is using energy and where energy savings could be possible. On average, consumers who use Sense shave 8% off their energy consumption.<\/p>\nWhat makes sense for your customers<\/h2>\n
Phone-based apps are accessible to almost all consumers.<\/h3>\n
Phone-based apps support equity initiatives.<\/h3>\n
Real-time data keeps consumers engaged.<\/h3>\n