New Business Model, A Balancing Act
Ken Costello serves as principal researcher for energy and environment at the National Regulatory Research Institute. Mr. Costello previously worked for the Illinois Commerce Commission, the Argonne National Laboratory, Commonwealth Edison Company, and as an independent consultant. He has conducted extensive research and written widely on topics related to the electric power and natural gas industries, and public utility regulation. Contact him at kcostello@nrri.org.
Growing customer activism has been a driving force behind transformation of the U.S. electric industry. The combination of technology, public policies and economics has made this possible. Although the jury is still out on how fast customer activism in retail electricity markets will spread in the coming years. It may very well turn out that the overall enthusiasm over electric customer empowerment is “more noise than sound.”
Active customers want different things, including real-time information and pricing so that they can better manage their usage. They also want to save on electricity costs, receive clean energy from their utility, and enjoy exceptionally reliable and resilient service with shorter and less frequent outages. Active customers also want quality power and the ability to self-generate.
Few customers would want all of these things. While others probably would demand different combinations. A customer for example may select a green tariff that requires him to pay extra for electricity produced from clean energy sources.
Another customer may prefer what she thinks of as fair rules for self-generation. Both in the price she pays for standby utility service and the price she receives for selling unused electricity back to its utility. A third customer may just want real-time information to better control his electricity usage.