Why your utility company is finally treating you like a customer

Energy costs have risen at twice the rate of inflation since 2020, and consumers are feeling the pinch. The nearly 30% price hike reflects challenges stemming from an aging electric grid and growing demand from data centers and EVs.

Not surprisingly, energy prices are finding their way into political campaigns. Massachusetts Governor Maura Healey recently asked the state’s regulators to scrutinize all current energy charges as well as utility rate cases.

“Every dollar has to be justified,” the governor said. “If there isn’t a real customer benefit there, it should come off the bill.”

This type of probe is part of a nationwide trend putting pressure on energy providers already reeling from the effects of increasing load growth.

“Utilities are, more so than ever, under stress from every direction,” Chris Black, CEO of GridX, said on a recent episode of the With Great Power podcast. “The expectations of consumers are growing every day. The challenges are growing. So if you have more capabilities that you can bring to the customers that you already have and that you’ve been engaged with for a long time, you can solve more of the really critical problems.”

In other words, customer relationships matter right now, as do programs that help consumers lower costs. That’s forcing utilities to examine how they view themselves, and their relationships with ratepayers.

“For a long time, I think utilities looked at their consumers as ratepayers, and the only interaction they have is the bill,” Black said. “Utilities thought about themselves as generating and supplying electrons and then billing on those electrons.” But those days are over. “They realize that they have to be creating experiences for consumers… more education for those consumers,” he said.

That’s not just because consumers are becoming more aware and burdened by utility costs, but also because consumers are vital partners in deploying distributed energy resources that undergird grid resilience and flexibility. That means aligning consumers’ needs with utilities’ needs and helping consumers understand how varying time-of-use rates and billing structures — which Black’s company GridX helps utilities design and implement — can help lower their energy costs.

“Utilities have realized that programs are the way that they really should be organizing and operating,” he said. Those include demand response programs, EV charging or community solar programs. “Those programs, though, are effectively consumer products that they’re offering,” Black said.

Black says he’s seeing more and more utilities embracing this framing to engage consumers as partners in those programs and less as sources of recurring revenue. This means effective marketing and segmentation to understand what types of ratepayers are most likely to benefit from — and therefore participate in — any given program.

”It’s aligning consumers’ needs with the grid’s needs. Getting the consumers aligned is good for them and good for the grid and good for the utilities,” he said.

Listen to the data

But how should utilities go about personalizing outreach and designing programs that will work? Black says it starts with leveraging the troves of data utilities collect through advanced metering infrastructure like the bi-directional smart meters attached to most residential customers in the United States today.

“These things are sampling every 15 minutes or more. The next wave of AMI meters coming out are sampling thousands of times a second,” he said. Marrying those data packets with consumers’ interactions with their utilities providers — down to every call or message consumers make to their provider’s customer service department — “is super valuable data that could be used for informing future consumer products,” Black said. “There are fairly few [types of] companies that I think have the volume of data that utilities have.”

In the past, utilities haven’t leveraged the insights smart meter data provides. But those days are over, too, Black said. “You have this big lagging industry that is waking up to the fact that they really are consumer product companies, and at the same time they have long histories of huge amounts of data. If you combine those things, just think about what you could do with that.”

For the full conversation with Chris Black, listen to his interview on With Great Power here.