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Will utilities be observers in their own game?

I have an intimate relationship with my energy company.  Well, I should, given that a hefty portion of my monthly household expenses are paid out to them.  I know they have tried to talk to me – suggesting that they want a relationship.  They do send me a monthly bill with all sorts of great paper-based inserts that talk about their “programs” to help me save energy – which shows concern.  They are great at giving me advise about how to better reach them, or communicate with them.. They even sponsor some of the local events that I am passionate about to “be part of my community.”  Unfortunately, like most people, I either do not read or pay attention to much of what they have to say to me, because I generally don’t think about them (as a consumer).  The previous statement is not be entirely true for me personally, but that’s because I do a lot of research in the industry so I think about them all the time from a “how can I help them as a business” perspective.

As I talk to people in the industry, read the materials and attend discussions, a question has been nagging me for a while – Who is leading the conversation in conservation? By this I mean energy efficiency and usage.

powercord1By all accounts, utility companies should be leading the conversation about energy use and demand, and I am not convinced they are.  I have had discussions with people in several utility companies about this subject, and the fact is they are concerned about energy efficiency and usage and making sure they craft the right programs for their customers–in fact, according to a recent study from Berkely Lab, they spend over $4.8 billion in customer-funded programs annually to raise awareness and provide energy efficiency programs (note: this spending is across the board, not just residential).   However, it appears more and more that they are becoming observers in their own game.  I say that because when we asked people, more specifically residential customers, who they think should be responsible for providing solutions to help manage their energy usage – utility companies lead the pack by a significant margin.  Basically, residential customers are saying that their utility company should be playing an active role in this process.  However, when you ask these same people if their utility has provided them with sufficient information and resources to help them manage their use – only 45% of them indicate that they have.  This is a large gap considering these three important facts:

  • The size of the expenditures utilities are making in this area ($4.8 billion)
  • The fact that these are customer-funded energy efficiency programs
  • The expenditure on customer-funded EE programs is projected to double by 2025 (according to the same study)


More and more, I see a shift is occurring towards third party developers (tech companies, software providers, app developers, hardware providers, etc.) leading and controlling this very important subject.


[Opower’s  Alex Laskey on TED Talks: How behavioral science can lower your energy bill]


Only 45% of surveyed residential customers indicate that their utility company is providing enough information or resources to help them manage their energy usage.

GoToMetrix SmartEnergyMetrix™ Study 2013


Although these providers are “partnering up” with utility companies, the fact is, they may have little use for their utility partners in the end as they develop systems to tap directly into our energy usage.  Why is this important?  Because as they become the energy conservation hero – able to help customers leap over small piles of money in a single bound – they will be the one who customers turn to for insight and help in the energy efficiency game (Opower’s behavioral experiment uses competitive game strategy to drive behavioral change).  This leaves them in the position of being able to eventually dictate to their partners and the market, and although that may be a good thing in the end, I can’t see it as a good thing for an industry, which will eventually be held accountable for how effectively they used customer-funds to accomplish the same thing.

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