“Utility Death Spiral” or the “Dawn Of Engagement”?

Mar 18, 2014

Recently a number of media outlets in our industry have been talking about the “utility death spiral.” The timing of the death spiral idea is interesting, especially considering all the positive things taking place at this exact moment in the electric utility marketplace.

We currently have what I consider the “fantastic four”—four key trends that are coming together that will play a role in the future of the electric utility: 

  1. Technology (Industry smart devices, hardware, and software, analytics)
  2. Utility services (DSM, EE, DR, TOU billing, renewables)
  3. Consumer engagement devices and services (smartphones, tweets, texts, etc.
  4. My expectation as a customer that my electric utility should engage with me the way other consumer companies do (e.g., Amazon, Apple, Comcast, and AT&T to name a few).

  
The death spiral suggests that, because of renewable energy, distributed generation, improved energy storage, and more energy efficient homes and buildings, the public will continue to use less power until the utility is out-of-business! It is a novel concept and one I am sure utility executives are thinking about. But, like the saying goes, “with change comes opportunity.”   

And because of reliability, sustainability, public safety, and regulatory concerns, it is hard to imagine no “backstop” to the electric system. Electric utilities may be facing some new challenges but—thanks to the fantastic four—they also have new opportunities to engage with their stakeholders like never before. 

It may be called a death spiral today, but perhaps utilities should instead see it as the “dawn of engagement.” That is, a way for them to remain economically viable by reinventing their models with new programs and services to leverage the fantastic four. For more on this idea, see: http://gridinsights.energycentral.com/detail.cfm/article/Two-simple-directives-to-embrace-the-new-utility-business-model?id=188).