What if Your Electric Utility Acted More Like Amazon.com or Netflix?

Credit: Lumaxart

Worried about a possible ‘utility death spiral’,  energy insiders are searching for new financial models to keep U.S. utilities healthy as customers flee to distributed energy.

But how about just figuring out ways to help the utility keep the customer in the first place?

That’s what Opower hopes to do with a newly announced customer care product.  The company that led the way in getting consumers to think about energy efficiency now wants to get customers to think about their utility — and kindly.

Most of us spend little time pondering our electricity, so  utilities must make the most of precious moments, if they are to buddy up with their customers, the way Amazon.com and Netflix do.

But few utilities understand how to communicate during those moments. It’s not a problem of money; utilities spend a lot on customer operations — about $30 billion annually, according to Opower. But they spend the money mostly on billing, reading meters, call centers and the like — not exactly warm and fuzzy.

So the pressure is on utilities to thaw the relationship.

“Utilities for a very long time operated as pure monopolies. Customers frankly have more choice now. The onus is on the utility to be the provider of choice,” said Josh Lich, Opower associate director of solutions marketing, in a recent interview.

The good news is that consumers do trust utilities. People are four times more likely to consider buying a connected thermostat (or other energy management services) from a utility than an independent company, according to an Opower white paper, The Value of Utility Customer Engagement.

My Bill is What?

As with all things Opower, its new customer care solution starts with an understanding of human behavior. When it comes to utilities, mostly we care about what they charge us.  We’re particularly attentive if we get a high bill.

“Almost two thirds of a utility’s call center is devoted to just answering questions about bills. This really is the main line of customer interaction,” Lich said.

We’re likely to be upset. The high bill is a surprise. Wireless telephone companies warn you when you are about to exceed your data package and spike your costs. Few utilities do the same.

So now the utility has our attention. Problem is, the utility is probably “thin on engagement,” Lich said. Put another way, it doesn’t communicate to us in a customized way, but instead supplies generic information, furthering our frustration about the complex bill.

“There is a missed opportunity for providing advice about why the bill is high…and what the customer can actually do about it in order to lower their bill,” Lich said.

So Opower’s first customer care product is a billing suite. It is designed to reduce call center activity (and therefore utility cost) — and make customers happier and better educated at the same time. It sits on top of Opower’s core utility platform, now used by 95 utilities (355 billion meter reads worth of data) for energy efficiency, engagement and demand response.

Works Best with Smart Meters

The new billing software helps utilities reach the customer before a problem occurs. For example, it notifies the customer well before the end of the month if the bill is on track to be high. The customer then has an opportunity to adjust energy use.

Some customers will want more information. So the suite includes self-service tools; the customer can log on to the utility site and delve deeper into what makes the bill high. Maybe there were more days in the billing cycle. Or perhaps it was colder or hotter than usual.

If the utility uses smart meters, the information is more precise.

“We can then notify that customer proactively, ‘Hey, you’re about a third of the way through the bill period and you’re on track for a higher bill than usual.’ In an email or even a phone call it gives the top reasons on why that might be and tips on how to correct it,” Lich said.

If there is no smart meter, then Opower uses coefficients that look at a customer’s sensitivity to weather. The software monitors the actual weather patterns and matches them up to the customer’s historic use. Maybe the customer tends to ramp up air conditioning during a heat wave. If so, a notice is sent to the customer warning that the home might be headed for a big bill.

If customers are still confused, they can call the utility, and will find a representative who has deeper information and insight to share.

Opower hopes to achieve three things: make customers happy; reduce a utility’s call center costs; and help utility’s proactively market energy efficiency, solar or other new products.

The platform also measures the best way to talk to the customer. It may notice, for example, that a customer hasn’t been opening emails sent by the utility, so will send paper notices. (Utilities tend to have 25 to 50 percent of customer email addresses, Lich said.)

Lich added that the new product ties together Opower’s mission of saving energy with utility business goals.

“We wholeheartedly believe that there is no better way to help customers save energy than to give them the type of advice they need every time they interact with the utility. At the same time, we’re solving a deep need that our clients and utilities have come to us to solve,” he said.

Will the Utility Go for It?

Puget Sound Energy (PSE) will be the first utility to use Opower’s Customer Care solution.

“We have worked with Opower since 2008 to engage customers in order to meet our energy efficiency goals,” said Jason Teller, PSE vice president of customer solutions.  “We are excited to extend our partnership with them to inject personalized insights into other touch points such as unusual usage alerts, seasonal readiness, and eBills to drive energy efficiency program participation and increase customer satisfaction.”

Will others follow?

Opower acknowledges that its market — the utility — is a slow moving one. Inertia, say company executives, is Opower’s biggest competitor, not other companies. So Opower is ramping up its sales force to move the market.

Opower of the Future

The new billing suite redefines Opower in many ways. It is no longer just an energy efficiency and demand response company, but now is solidly in the customer service arena.

Energy efficiency, however, remains its dominant business. The company ended 2014 saving 2.7 TWh. To put that in perspective, that’s more than double the generation produced by the popular solar residential installer, Solar City, according to Dan Yates. Opower CEO.

The company hopes to eventually automate every customer touch point — not just billing.

“This is our ambition now. To be the company that leads the transformation of how utilities serve their customer for everything ranging from billing, from outages, to call center activities, to customer life cycle,” said Yates, during the Goldman Sachs Technology and Internet Conference on February 10.

Yates believes utilities are ready to pursue Amazon.com-like customer service in a big way, despite their native inertia.

He cites as validation a recent conversation he had with Robert Powers, executive vice president and COO of American Electric Power, which has five million customers in 11 states.  Powers told Yates he’s come to see that customers want more than reliability; they want better service.

When a giant like AEP starts elevating customer service, “it means our industry, writ large, is focused on these issues,” he said.

For more on Opower’s thinking about the utility/customer relationship,  see the free whitepaper, “The Value of Utility Customer Engagement.”