In recent years, the electric utility industry has been undergoing a shift. At the epicenter of that movement is technology: the emergence of affordable solar panels, high-capacity batteries, electric vehicles, internet-connected devices and other technical innovations. The ways we generate, transmit, buy, sell, store, use and think about electricity are changing.
Consumers of electricity are changing as well. Now more than ever, they want some measure of control over their energy use and energy choices.
In response to these changes, a new kind of electricity supplier is emerging. This “consumer-centric utility” pursues its traditional mission — providing safe, affordable, reliable and clean electric service — while enabling access to new products and services that satisfy consumers’ evolving expectations. In truth, there’s never been a better time to be a user of electricity.
Consumer-centric utility defined
A consumer-centric utility integrates and optimizes a pool of resources on behalf of consumers. Resources can be traditional generational assets or distributed energy resources (demand-response programs; energy-efficiency programs; and distributed generation, including wind and solar; and storage capacity). Unlike traditional utilities, consumer-centric utilities empower consumers with new services such as community solar programs designed to meet local conditions and satisfy consumer preferences. As consumers demand new products and services, the flexible consumer-centric utility will be positioned to meet the needs of individuals and the system as a whole.
To deliver new and better energy service, the consumer-centric utility takes a long-term view. It leverages economies of scale, scope and integration. Investment in a two-way metering system, for example, enables consumers to control energy use and access new services while reducing costs for the system as a whole.
A broad understanding of the system allows consumer-centric utilities to appreciate how all the pieces of a complex system fit together. Such a utility might have the insight to invest in sensor technology, for example, in places with a high penetration of solar energy. Consumer-centric utilities also join with third-party providers of distributed energy resources to optimize systems and improve energy service for consumers. Deployment of advanced metering infrastructure systems, smart inverters and electronic sensors provides data that can improve system performance.
Consumer-focused utilities embrace innovation
Let’s take a look at how electric co-ops across the country are empowering consumers.
• CoServ Electric in Texas created financial incentives that encouraged members to enroll in a Nest smart thermostat program. The initiative reduced overall energy use during peak summer hours when electricity is expensive and saved money for consumes.
• Vermont Electric Cooperative made several strategic investments over a 14-year period, installing an integrated electronic mapping system, a two-way meter platform, an integrated outage management system and an upgraded control and data acquisition system. The utility cut outages in half and positioned itself to provide new services to consumers.
• North Carolina Electric Membership Corporation, a generation and transmission cooperative (G&T), has collaborated with its distribution co-ops to improve consumers’ experience. Among the advantages of the arrangement, the G&T can more easily pilot new technologies such as internet-connected thermostats that benefit consumers.
Interest in solar energy has grown dramatically, but only a fraction of U.S. households have rooftops that are suitable for installing solar panels. Consumer-centric utilities have responded by developing community solar programs that are accessible to all members and are more cost-efficient than rooftop solar. For example, Okanagan County Electric Cooperative in eastern Washington built a subscription community solar system in 2010 that quickly sold out, prompting the co-op to expand to two systems. Many other cooperatives are following the same trend.
In a world of change, the future is bright for flexible, consumer-focused electric cooperatives.
Jan Ahlen writes on consumer and cooperative affairs for the National Rural Electric Cooperative Association, the Arlington, Va.-based service arm of the nation’s 900-plus consumer-owned, not-for-profit electric cooperatives.