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electricity value chain

Do most Americans spend eight or more hours of their days thinking about electricity?  No.  They spend their days worrying about more important things, like how to convince their children to sensibly use various social media channels; saving enough for retirement; and securing help for aging relatives.  In other words, they are dealing with life. 

In the Smart Grid world, there are conferences, webinars, and articles focused on educating consumers about the Smart Grid.   This education is deemed necessary to arm consumers with knowledge to enable their full participation in Smart Grid benefits.  And certainly Americans in their multiple roles as consumers, voters, and taxpayers need to understand the importance and urgency of investment in grid modernization.  But why are we allocating most of our discussion focus and investment of time and money into consumer outreach and education?  Shouldn’t we talk more about educating utilities and preparing their employees for changes that the industry will experience? 

After all, utility employees are already dealing with some part of the electricity supply chain.  The Smart Grid is influencing profound transformations in operations at all points of this chain, meaning generation, transmission, and distribution.  Generation is changing from steady state fossil fuels to intermittent clean renewable energy sources like wind and solar.  Transmission of high voltage electricity is getting a communications makeover to provide realtime situational awareness.  Distribution of low voltage electricity to residential and commercial customers is experiencing the most change, including the introduction of distributed energy resources like rooftop-based solar power and energy storage; and vastly extended remote monitoring and controlling of distribution assets.  But most importantly, the old electricity supply chain is evolving into a new value chain that puts an emphasis on consumers.  Consumers can become prosumers, or producers as well as consumers of electricity.  That means that utilities’ relationships with consumers must change as much as consumers’ relationships with utilities will change.     

For utilities this new value chain means a shift in perspective from meters and ratepayers to customers and consumers. Here’s how we describe one implication of that shift in our consulting work at the Smart Grid Library:  A customer is the one who gets the bill.  That customer may be a sole occupant of a household, or there may be multiple occupants at that address.  All occupants of residential or commercial buildings are consumers of electricity (or gas or water).  If a utility is targeting all its communications and outreach to the customers who pay the bills, they are missing other consumers in those buildings. 

There are 311 million Americans.  There are 561,700 utility employees in the USA (this number includes water/water treatment and natural gas distribution workers).  Wouldn’t it be easier to first ensure that all utility resources were educated to understand and communicate the changes wrought by Smart Grid projects and the value chain roles/responsibilities evolution rather than reach a vastly larger number of people who aren’t paid to concern themselves about electricity?

The Smart Grid is much more than some changes in technology to make electricity and communications bi-directional.  It means deep, organizational DNA-level transformations for utilities.  It requires serious industry attention to prepare utility employees for new ways of doing business, interacting with consumers, and new roles/responsibilities to manage consumer education and communications.


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Click on this video to learn more about our Consumer Focus Strategy for utilities. We recommend full screen mode for best results.

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In this European Utility Week Engerati interview hosted by Christine Hertzog, Managing Director of the Smart Grid, Library, Jeanne Fox discusses the work of NARUC as well as the recent storms in the US (specifically New Jersey), and the damage they wrought on the electric utility infrastructure.

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