The electric vehicle first made its appearance about a century ago, but it is only in recent years – months, to be more precise – that it has achieved breakthrough status as, quite possibly, the single-most important technological development having a positive impact on society today.
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The classical school of utility operations prescribes four priorities, ranked in the following descending order: safety, reliability, customer service and profit. Although it’s not hard to engage any number of industry insiders in an argument over whether profit in the classical model has recently switched places with customer service (and/or whether it should), most people accept that safety and reliability still reign supreme when it comes to operating a utility. This is true whether one takes a policy-, economic-, utility- or customer-oriented perspective.
Thanks to new technologies and the spirit of independence and empowerment fostered by the digital age, consumers are taking on broader and more active roles in an increasing number of industries. Not only are consumers increasingly vocal and decisive about what they will or will not buy, they are in many cases becoming designers, producers, marketers and distributors of the products they once simply purchased.
For the past century, the dominant business and regulatory paradigms in the electric power industry have been centralized economic and physical control. The ideas presented here and in my forthcoming book, Deregulation, Innovation, and Market Liberalization: Electricity Restructuring in a Constantly Evolving Environment (Routledge, 2008), comprise a different paradigm – decentralized economic and physical coordination – which will be achieved through contracts, transactions, price signals and integrated intertemporal wholesale and retail markets.
THE CHANGING DYNAMICS OF CUSTOMER RELATIONSHIPS
The utilities industry is in transition. External factors – including shifts in governmental policies, a globally felt sense of urgency about conserving energy, advances in power generation techniques and new technologies – are driving massive changes throughout the industry. Utilities are also under internal pressure to prevent profit margins from eroding.
Historically, utility customers have had limited interactions with their electric or gas utilities, except to start or stop service, report outages, and pay bills or resolve billing questions. This situation is changing as the result of factors that include rising energy prices, increasing concerns about the environment and trends toward more customer interaction and control among other service providers – such as cell phone companies. Over the next five to 10 years, we expect utility customers to continue seeking improvements in three key areas:
The Olympic Peninsula Project consisted of a field demonstration and test of advanced price signal-based control of distributed energy resources (DERs). Sponsored by the U.S. Department of Energy (DOE) and led by the Pacific Northwest National Laboratory, the project was part of the Pacific Northwest Grid- Wise Testbed Demonstration.
Smart metering technologies are making it possible to provide residential utility customers with the sophisticated “smart pricing” options once available only to larger commercial and industrial customers. When integrated with appropriate data manipulation and billing systems, smart metering systems can enable a number of innovative pricing and service regimes that shift or reduce energy consumption.
January 1, 2008
Although some utilities have improved organizational agility by providing high-level executives with real-time visibility into operations, if they’re to be truly effective, these businesses must do more than simply implement CEO-level dashboards. They must provide this kind of visibility to every employee who needs it. To achieve this, utilities need to be able to collect data from many disparate sources and present it in a way that allows people company-wide to access the right information at the right time in the form of easy-to-use and actionable business intelligence (BI).