People — Power’s Biggest Challenge

The Mindshift Utilities Must Make to Survive

It’s no secret that electric utilities are being forced to evolve in these changing times. The 2015 Utility Dive State of the Electric Utility (SEU) report states that “emerging technologies, shifting consumer expectations, and new energy economics are causing the industry to rethink the business and regulatory models that have served them for over 100 years.”

While this industry has not been without its own unique challenges (government mandates and managing competition from energy resellers, to name a few), it hasn’t had to endure some of the typical struggles other industries face over time — staying ahead of a growing number of competitors, or reconfiguring ways to maintain or increase demand for particular goods or services. For the most part, people have always needed electricity and have always gotten it from their utility. The utility focused on getting it from point A (the plant) to point B (the ratepayer), with little regard for anything else.

Therein lies part of the problem.

The world of electricity has broadened. Both residential and commercial consumers are beginning to see options in renewable power, distributed generation and adapting a lifestyle that’s more energy efficient. In turn, their dependency on the electric company — while still apparent — is taking on a new feel. Consumers are realizing that as technology continues to advance, so too will their options and their ability to empower themselves to be more than just a ratepayer.

The question is, what will the utility do with a “real person”? Currently, the SEU reports 72% of utilities engage with their customers for billing and customer support, but they realize they must better understand, engage and service customers. To that end, 76% report an increase in their investment in customer engagement.

The question: When the customer is no longer “the unit” to which the electricity must flow, but a person who has opinions, needs and expectations, how will the utility handle that relationship?

The SEU report summarizes it best in their conclusion: “Utilities want to adapt to the changing times. What’s not clear yet is how.”

These changes represent a fundamental mindshift in the consumer — from a customer who pays a bill, to a customer who has specific needs and expectations to customize virtually all products and services to fit them. Electricity will be no different. Even if a consumer still needs the utility to get the goods, he knows that an unprecedented amount of flexibility is coming to a relationship that has been stagnant for decades. Competition from rooftop solar companies, for example, will begin to provide alternative sources of energy for dissatisfied or curious consumers.

The customer isn’t the only people problem utilities will face in the future. The SEU report states that among the industry’s most pressing challenges is an aging workforce.

The increase in technology is making utility operations more complex and less intuitive for the seasoned employees. The older workforce isn’t able to easily adapt to the new ways of running the grid, and the younger workforce isn’t robust enough to recruit into management and executive positions. Only 7% of the SEU survey respondents were under 30, while 75% were 40 or older.

Utilities have to learn not only how to forge a better relationship with their consumers, but with their potential employees — young workers with technical skills. Unfortunately, these candidates are also being sought after by other industries (such as manufacturing) suffering from the same challenges.

To survive in the future, it will be imperative for utilities to figure out how to establish a meaningful, two-way relationship with people.

For their consumers:
What can they do to be seen less as service providers and more as energy consultants?

For their potential employees:
What are the opportunities they can offer to help employees learn and grow within a rapidly changing industry?

For utilities, the real power lies within the “What’s?” rather than the Watts.