Will utility executives embrace disruptive innovation?

Will utility executives embrace disruptive innovation?

It’s the high season for smart grid conferences.  The recent eMeter Leadership Conference combined practical, hands-on knowledge with intriguing insights and thought-provoking statements about directions for industry and consumer evolutions.

One of the most interesting takeaways is that solutions like meter data management systems (MDMS) are evolving into application platforms, a trend that likely has legs. There were inspiring stories from utilities such as Westar that are taking intelligent steps to inform, engage and enlighten their customers to help them fully participate in and enjoy the benefits of a smart grid. 

The conference included a disruptive innovations session that featured companies involved in shaking up things from smart grid technology or business model perspectives. Two companies represented distributed energy resources (DER) technologies, three companies focused on consumer-edge products or services, and one company focused on the energy market.

Of all the great questions and answers that were shared in this session, this is the great one that I wanted to pose to you whether you’re an industry insider or someone who only thinks about electricity when it isn’t available.  The question is, “what is the one word of advice that you would give to utility executives?” 

Here is a sampling of the answers. 

  • Easy. Although this was stated in the context of making utility processes easy for interconnection of DER assets, I’d extend this bit of advice much further across the realm of interaction possibilities.  Make it easy for consumers to interact with utilities. That means bills that are meaningful, websites that are informative and fun, and elimination of "utility-speak" acronyms and jargon that create barriers to communication.
  • Transactive. Think about a very different energy marketplace where utilities are buying and injecting energy into the distribution grid (the low voltage side) in addition to the bulk or high voltage supplies. Whether utilities are investor-owned utilities (IOUs), municipals, or rural cooperatives, they can work proactively to recast energy buying and selling with more participants, including producing consumers or prosumers.
  • Motivation. Utilities are often considered the "trusted advisor" for energy matters by consumers, and therefore have an important role as communicators to provide reasons or motivations why consumers should care about saving energy.  Granted, this is much more meaningful to utilities that are decoupled -- meaning they are not punished financially for encouraging consumers to use less of what they sell. However, even in states where decoupling is a distant dream, utilities still need to encourage consumers to use less electricity during peak demand times. There’s no reason for these utilities to not devise compelling messages and programs to encourage time-specific behaviors that reduce consumption.
  • Dare. Utilities must dare to take risks with new technologies and new ways of working with consumers. Now this is easier said than done, since IOUs are regulated to be risk-averse and regulators work to protect consumers from the costs of failed initiatives in new technologies or business programs. Somehow we have to find a balance that allows utilities to experiment with promising innovations and business models that minimize the disruptions, or recognize that the disruptions (to consumers, markets, utilities, and all other stakeholders) are outweighed by long term benefits.
  • People. Utilities have to be user-friendly. People, whether external consumers or internal employees, were perhaps afterthoughts for the greatest machine on earth -- the electrical grid. But people will be prominent actors in the smart grid in roles as prosumers and participating consumers. In addition, the pending workforce changes looming as significant percentages of utility workers retire means that utilities must make their workplaces cool and hip career destinations.