President Obama recently announced aggressive plans to cut greenhouse gas emissions by 17 percent over the next five years. These regulations, which could go into effect as early as next year, have the potential to seriously restrict the types and amounts of power available.
How will this effect utility companies and their customers?
Warming up to alternative energy sources
Power plants account for 40 percent of the nation’s carbon dioxide emissions, the majority of which comes from burning coal. Utilities will have to make drastic operational changes to reduce their reliance on coal in favor of cleaner energy sources such as natural gas, nuclear, wind and solar power.
Homeowners and businesses will likely pay more for electricity because these alternative energy sources are more costly and difficult to produce and store. Customers will need to adopt more energy-saving behavior as well to keep their utility costs down.
More demand for demand response
As the shift to alternative energy begins, utilities are likely to look to demand response as a means to reducing energy consumption.
The good news is that both utilities and consumers are ready to adopt this practice. According to a 2012 Federal Electricity Regulatory Commission (FERC) report on Demand Response and Advance Metering, nearly a quarter (23 percent) of customers now have smart meters. Commercial customers have increased their ability to reduce the peak load by 31 percent in the last two years. Residential consumers still need to play catch-up, but new residential demand response programs should close this gap.
Some utilities have demand response program in place now. However, they typically host only one curtailment event a year. This will undoubtedly change under the new regulatory rules. We should see more frequent events and more utilities introducing both commercial and residential demand response and energy-savings programs.
The power of timely information
The biggest hurdle for power companies may not be rolling out programs, but rather getting customers signed up and getting the word out about curtailment events as they happen.
For demand response programs to be successful, customers need to be aware of them and given time to plan ahead. No business or resident is going to reduce energy consumption if they don’t know to do so or get the notification too late to take action. This is where automated communications can be very effective.
Demand response communications typically include multiple touchpoints including advance warning of when a potential demand response event will take place, status updates while curtailment is underway and notification of when the event has ended. Fast, timely delivery of these notifications is crucial. For utilities that have large service areas and diverse groups of customers, reaching the right customers with the right information and the right time could prove challenging.
Automating this outreach takes the burden off internal personnel and contact centers to try and reach affected customers. Reaching people on their preferred communications channels (voice, text, email) also increases the likelihood that they will get the message and respond promptly. With the right application, it’s easy to leave messages with a call-in phone number or add a link in a text message to a web portal for more information. You can even use these communications to opt-in customers to demand response programs or survey them on whether or not they are planning to participate in a curtailment event.
Varolii has helped several of the nation’s top utilities introduce cross-channel communications into their demand response operations to enroll customers in programs and keep them informed during events. Our applications are cloud-based for easy integration, fast deployment and timely delivery guarantee. Learn more about Varolii’s demand response application.