Utilities Should Take Advantage of the Transformation

The power industry faces major disruption but there are some utilities that are not planning sufficiently for this imminent transformation.
Published: Wed 25 Jun 2014

Perry Stoneman, Corporate Vice President and Global Head of Sectors and Utilities at Capgemini, who will be speaking at the upcoming European Utility Week, says that it is not clear whether enough utilities have their digital roadmap in place. He suggests that utilities have the opportunity to be a part of this change but that they will need to plan ahead.

Utilities don’t have to lose their customers

He explains, “Utilities can offer their customers so many different options. There is no reason why customers with solar panels should leave the grid altogether. Utilities can still keep consumers with solar panels on the grid as long as the benefits are made clear to the customer.” For instance, the utility can offer consumers reduced tariffs in order to remain competitive in the market.

But even without lower rates, the existing contract or relationship between the power consumer and the utility is long-standing which makes it easier for the customer to stay on the grid. “Utilities should use that opportunity to keep its customers since it is less fuss for the customer to stay with the utility.” However, it is imperative that utilities make an attractive offer to keep its customers. “For the consumer there are benefits to staying on the grid and being part of the community. This is mainly because customers know who they are dealing with based on a long history,” explains Stoneman.

In general, the consumer is in charge, explains Stoneman. A consumer can let a bad experience go viral via the social network. Because consumers have far more power now than they have ever had before, utilities need to think long and hard about what they do and how they service their end-customers.

Defending service territory

Stoneman points out that disruption in the industry will probably affect the utility within an eight year time frame. While some executives are planning ahead for the transformation, there are still those utilities that believe the uptake will be minimal.

It is not a stretch to create that digital roadmap, explains Stoneman. This includes cost optimization, better infrastructure management so that savings can be passed onto the customer, and improving customer service to reduce the threat of competitors.

Stoneman points out that communication with customers, via all available channels, is critical for success. He says, “Consumers want to have a digital channel. They don’t always want to talk to a call center. Consumers want options.”

Planning for the future

Utilities should also create commercial offers so that utilities are given the opportunity to work alongside customers who want to become prosumers. This will also reduce the threat from disruptive businesses which are entering the market at a rapid rate. Stoneman points out that proactive utilities will show the rest of the industry the direction that needs to be taken.

In conclusion, Stoneman says, “As a technology company we know how technology affects industries. With digital technology transforming the industry, utilities need to plan for the future, and take advantage of available technology. There is no reason for the utility to fall victim to those who are disrupting the market. I would encourage utilities to think seriously about what that means and how many other competitors are threats as they access the household through various digital channels.” [Engerati-The Google Smart Home Play] and [Engerati-Utilities to Become ‘Energy Enablers’-PwC report]