Why customers want their utilities to talk more about the price of power

This week, we learned from new data that residential electricity prices increased substantially in almost every region of the United States between 2013 and 2014. In New England, rates spiked nearly 12 percent in 12 months.


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According to the U.S. Energy Information Administration, which published the new data, the 3.2 percent average rate increase represents the highest year-over-year growth in residential prices since 2009. Last year’s polar vortex may be partly to blame, particularly in the Northeast. But the EIA’s data get at a larger trend that’s playing out across the globe. Many utilities are paying more for wholesale electricity than they used to — and as retail rates increase accordingly, some customers are getting hit hard with higher bills. That spells trouble for an industry that needs to build loyalty and strengthen its customer base. Deregulation, distributed generation, and new competitors in the marketplace are giving energy consumers more choice than ever before — and in order to retain them, utilities are under pressure to deliver power that’s cleaner and cheaper than any of the alternatives.



Energy efficiency and demand response are part of the solution

Shaving demand, especially at peak, is one surefire way to reduce the cost of generating electricity and pass savings onto consumers. We wrote earlier this week about how innovative utilities like Baltimore Gas & Electric are using dynamic pricing to ease strain on the grid and save their customers millions in energy bills. Other energy providers are achieving similar results with time-of-use rates for electric vehicle owners. 




By helping EV owners opt into dynamic rate plans, utilities are shifting energy consumption to off-peak hours and smoothing out the demand curve. 

With frigid temperatures threatening to return in a big way this winter, energy efficiency and demand response programs represent a huge opportunity for utilities to curb generation costs, save their customers money, and build their reputations for strong service and reliability.


Rates will rise and fall — which is why great communication is so important

Right now, many American utilities are going big on natural gas, which is notoriously variable when it comes to pricing. At the same time, climate models are forecasting hotter summers and more of the extreme weather events that caused energy prices to spike this year. And from coast to coast, new state and federal standards are continuing to make waves across the energy marketplace. It’s a safe bet that these forces will keep causing the price of power to shift, just as it did over the past 12 months. Utilities can’t always control that. But what they can control is customer communication — making sure families know why their bills are changing, and giving them the tools they need to manage their energy use.

That’s the idea behind efficiency-focused customer engagement programs, which give homeowners personalized insights into their energy consumption and empower them to use less. It’s also what motivated us to build new kinds of customer care into the Opower platform, like high bill alerts, and an online portal that lets consumers comparison-shop for a dynamic pricing plan that works for them.


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Customers worldwide say they want more communication from their utilities, and a growing number of utilities are ready to deliver. Because when an energy provider comes through with the right message at a moment that really matters, customers start to see it as an trusted adviser — someone they can count on, even when rates are on the rise.

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