Navigant Research Blog

US Utility Customers Remain Satisfied, but Always Room for Improvement

— August 3, 2017

Not often are electric utilities painted in a positive light in the public sphere. But the latest survey from J.D. Power suggests many US utilities are doing things right, and it has a 6-year upward trend in residential customer satisfaction scores to back that up.

Where Do the Positives Come From?

Utility managers pay close attention to these J.D. Power surveys, so it is worth noting what the new survey results reveal:

  • Overall satisfaction averages jumped 39 points this year compared to 2016, rising from 680 to 719 points (on a 1,000-point scale).
  • Utilities showed a 48-point increase for price factor, increasing from 611 points in 2016 to 659 points in 2017. Note: price factor satisfaction tends to rise as customers rate their utility higher for ease of understanding pricing, total monthly cost, and pricing fairness.
  • A 7-point increase (66% vs. 59% in 2016) in the number of customers receiving critical information during power outages—such as the cause, number of customers affected, and estimates when power will be restored.

Among the factors driving the improving satisfaction scores in 2017 is the notion that utilities are investing in infrastructure to increase safety and grid reliability (68% of respondents compared with 63% in 2016). DTE Energy is just one of many utilities that have made this kind of an infrastructure investment in recent years that can pay off in terms of customers having a more upbeat impression of their utility.

Another finding from the survey is an increase in electronic bill paying, with 20% of respondents saying this is how they pay their bill compared to 17% in last year’s survey. This trend is welcome news to many utilities (for example, ComEd) that have been encouraging customers to move away from paper bills as a way to lower utility costs for some time.

Alignment of Mobility and Satisfaction

Increasingly, customers access utility websites from mobile devices. More than a third of the respondents (35%) say they visit their utility’s website from a mobile device, which is a 15% increase from 2016. SRP in Arizona is one such utility that has scored highly in satisfaction with its website, ranking number one in a different J.D. Power survey.

Utilities take plenty of abuse from customers when the power is out, the bill is wrong, or a rate increase seems unwarranted. Nonetheless, the 6-year upward satisfaction trend is hard to argue with, and given the increasing pressure to simultaneously modernize the grid and keep bad cyber actors at bay, utilities do a good job overall. Yes, one’s utility can seem large and impersonal at times, but for most of us, these companies and their people deserve credit for keeping the lights on and providing power at reasonable prices. They are not perfect. There is continual room for improvement on many levels and when they mess up, customers should complain and have issues resolved quickly. By and large, though, utilities get the job done.

 

New Analytics Solutions Give Consumers More Energy Choice

— July 13, 2017

Residential consumers are becoming increasingly aware of their energy consumption and are interested in how they can reduce their use, save money on energy bills, and become more environmentally conscious. More and more customers are receiving home energy reports, which detail energy consumed and compare usage to that of neighbors. Opower (Oracle) achieved more than 11 TWh of energy reduction across 100 utility partners with these types of reports. Consumers are also logging into mobile apps that disaggregate devices to help them make smarter choices about where to target energy saving efforts.

Despite increasing efforts and awareness about energy, many consumers still do not know where their energy actually comes from. Most people may have a vague sense of their country’s energy mix and imports, such as the US energy mix depicted in the figure below, or that the UK imports 60% of its electricity-generating fuel. However, when a consumer flips a light switch, turns on their TV, or adjusts their thermostat, the energy that powers those actions is coming from whatever power plant is turned on to meet that incremental demand. This means the energy your light bulb is using could be drawing power from a coal plant, a natural gas facility, or a solar panel.

US Energy Mix: 2016

(Source: US Energy Information Administration)

New Technology Helps Track Generation Sources

In the past, there hasn’t been a method for determining the generation source that is meeting demand in real time. However, a non-profit called WattTime has developed a data analytics software that solves this problem. The software, which was the brainchild of a hackathon event in 2013, detects where the electricity powering the grid is coming from and the actual emissions impacts of people and companies using electricity. Not only does it detect this information, but it can also automatically power devices when energy sources are the cleanest. It can be installed in any Internet-connected device, making it flexible and easy to implement. This tool empowers customers to have a choice in the type of energy they are using and how much they are emitting when they consume electricity. WattTime’s software is gaining traction, having partnered with companies like Microsoft, Energate, and most recently, the Rocky Mountain Institute (RMI). WattTime has joined RMI as a subsidiary organization to foster the transition to a cleaner, more decentralized grid.

Looking Forward to a Cleaner Energy Future

Data analytics solutions like these are empowering consumers to make smarter energy choices, facilitating the transition to a cleaner, more decentralized and optimized grid, and solving challenges associated with reducing carbon emissions. Currently, emissions are calculated based on average factors, not based on the actual emissions that are generated depending on the source providing the next kilowatt-hour of power. As countries and organizations around the world move forward with reducing greenhouse gases, real, data-based information on emissions can help consumers understand how their actions directly affect greenhouse gas emissions and contribute to the overall goal of a cleaner, greener world.

 

Alphabet-Owned Companies Making Smart Home Moves Across Europe

— April 12, 2017

Through its subsidiaries Nest and Google, Alphabet has been active in the US smart home space. On April 6, Google Home finally made a leap across the pond, launching in the United Kingdom 5 months after its launch in the United States. Google Home is Google’s response to the Amazon Echo, which has been available to consumers in the United States since 2014. One of the main appeals of the Google Home is its ability to integrate with other Google applications, such as its search engine, calendar, Pixel smartphones, and most recently, Google Wi-Fi.

Fellow Alphabet subsidiary Nest has had its Nest Learning Thermostat, Nest Protect, and Nest Cam installed in more than 190 countries. However, these products have only been available for purchase in seven countries. This is quickly changing, with the company announcing that it would expand sales to Austria, Germany, Italy, and Spain as of February 15 and to Mexico as of April 4. The company stated that it plans to continue expanding globally as demand continues to grow and that it is looking to partner with energy, insurance, and telecom providers as a method for making its devices more available to consumers.

The Race for European Markets

Alphabet is entering the European market at a time when few other players have traction across multiple countries. Apple’s HomeKit product has yet to launch in the United Kingdom, while Samsung SmartThings is selling in the United Kingdom but is not present in other countries. Amazon devices are available in the United Kingdom and Germany, but only as of late 2016. Point solutions exist and are gaining traction—such as tado’s smart heating solutions that sell in a variety of countries or Quby, a smart thermostat and home energy management company acquired by Dutch utility Eneco. However, these companies may not have the resource support of bigger players like Nest and Google.

As Alphabet makes moves across Europe through its subsidiaries, the tech giant is pushing forward progress in the smart home sector. The United States tends to be the main market for companies focused on the smart home, as is the case with many tech solutions and innovative offerings. In terms of energy, this can be attributed in part to the difference in heating and cooling systems across countries in Europe, where it is harder to approach the market with one solution and where devices often have to be completely redesigned. However, Europe is a hotbed of smart home potential, with energy-conscious consumers accustomed to innovative technologies for reducing emissions, such as solar. Alphabet’s engagement in the European market could help propel the smart home industry forward and significantly increase uptake in energy management devices.

 

CES 2017: The Year of Alexa and the Smart Home

— January 24, 2017

Home Energy ManagementAs my colleague Neil Strother put it, Alexa stole the show at CES 2017. Walking through the smart home exhibition at the Sands, it seemed as though every vendor with a device prominently featured the Amazon Echo and emphasized integration with Alexa. What struck me most about this phenomenon was Amazon’s ability to transition the smart home from an idea into a reality. The ability of device manufacturers to hone in on Alexa as the basis for the smart home, on which a whole ecosystem of connectivity and access can be built, is pushing a market that the average consumer can get on board with, as opposed to a Jetsons-style future that seems so far away. The Amazon Echo is not just the advertised Wi-Fi speaker, but an entire smart home platform.

Alphabet’s Google Home is also acting as a connected home platform and pushing the market closer to the mainstream. Google Home touts integration with many of Google’s beloved products and services, including its search engine, translation service, and mapping software, as well as a series of devices such as the Nest product line and Samsung’s SmartThings. However, Home still has a long way to go before it can catch up to the connected ecosystem that Amazon has created since the Echo’s release in 2014. This was made clear at CES, where Google Home took second place to Amazon Echo in terms integration with third-party devices and presence at vendor booths.

Comprehensive Solutions

Outside of the Wi-Fi speaker play, others in the market are providing comprehensive solutions that are pushing the smart home forward. Vivint Smart Home, which had a booth that looked more like a livable home than a technology demonstration, not only has a whole ecosystem of devices (yes, Amazon Echo among them), but is also partnering with sister business Vivint Solar to grant consumers more control over their energy. This all operates on one platform, which includes artificial intelligence for learning user patterns and making recommendations on how to better automate devices in the ecosystem, thus bringing the market that much closer to truly smart homes.

There are still major hurdles to creating a truly smart home, such as interoperability, security, and the technology required to make a home “smart” rather than simply “connected.” However, CES 2017 showed that the smart home is becoming much more of a reality than a concept, and  devices like the Amazon Echo are providing average users with a glimpse into the future.

 

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