Interview

The POWER Interview: What Energy Consumers Want from Utilities

EY earlier this month released the findings from its Energy Consumer Survey 2022. The report is “focused on how energy impacts the lifestyles and wallets of consumers,” according to the company. EY is the trade name for Ernst & Young, the multinational professional services group headquartered in London, UK.

The report is based on a survey of some 70,000 residential energy consumers across 18 markets, and was done over a two-year period. Among its findings: the passive energy consumer is no more, with the report noting that two-thirds of respondents are focused on reducing energy costs and consumption. The report also said only about 40% of those surveyed have confidence that their energy providers will create value for consumers in the future.

Greg Guthridge

The report said 65% of respondents have increased their interest in monitoring their energy usage over the past year, with 61% saying they want to reduce their impact on the environment. About half of those surveyed said their interest in buying new energy products and services has increased over the past year.

Greg Guthridge, EY’s Global Power & Utilities Customer Experience Transformation Leader, and writer of the report, took time to answer questions about the survey and provide insight into what energy consumers want from their power providers. Electricity and natural gas customers want a better understanding of how energy is priced, they want to be assured that utilities are acting in the best interest of their customers, and they want to know how energy providers are planning for the future when it comes to electric vehicles (EVs). They also want utilities to know the value of good customer service—including educating consumers about how utilities make energy decisions.

POWER: Does the way energy costs are regulated (by state utility commissions, etc.) need to be more transparent?

Guthridge: The way that energy costs are regulated and how the cost to consumers comes about is complex and confusing at the best of times. Greater volatility and rising fuel prices, wholesale energy prices, and end-consumer bills is putting a spotlight on the need for more transparency.  EY’s latest energy transition consumer research shows that in the U.S., only 39% of people feel the way the energy market and regulation works today benefits them. And getting more specific on costs—less than half (41%) find it easy to understand their energy bill. This points to a need to simplify how the industry and regulators communicate with consumers across all touchpoints from the energy bill right up to explaining policy and market decisions.

POWER: Is there anything consumers can do about increased costs due to factors outside of their control? For example, customers in many states have been impacted by rising natural gas costs after the failure of the Texas grid during February 2021. Does this increase mistrust toward utilities, when their monthly bill suddenly escalates even as their consumption lessens?

Guthridge: In the past couple of years, one thing stands out to me—energy has gotten personal. Many consumers are seeing rising energy costs and have directly felt the energy-related impacts of natural disasters and extreme weather events. Energy is now a discussion topic around the dinner table and overall, and this has had a negative impact on consumers’ confidence in the industry and their providers. EY’s research shows only 45% feel the direction their energy provider is going will create value for them and their community in the future. On the positive side, this sentiment is expanding and accelerating consumer engagement. More people than ever are thinking about energy—62% say that in the last year they’ve taken more actions to reduce energy consumption, 53% say they are more interested in renewables, and nearly half (48%) are more interested in generating their own electricity. So there are many things consumers can do, increasingly they are doing them, and despite current confidence levels, they are looking to their energy providers to play a more active role and rebuild trust.

POWER: Do most energy consumers want to be more efficient with their energy usage, in part to lower their energy bill?

Guthridge: EY’s research shows three things drive consumers’ energy decisions—saving money, saving time, and saving the planet. This year we saw an increase in the number of consumers focused on saving money, but at the same time, those other values have remained consistent. In fact, 57% of consumers say they have increased their focus on reducing their personal environmental impact related to energy in the last year. For power generators, transmission, distribution, and retailers it’s important to note that affordability is just table stakes. EY’s research shows it’s a key driver of satisfaction, but so too is alignment with consumers’ values, which are increasingly green-oriented.

POWER: Should utilities be more proactive in working with customers to lower their energy usage, and their energy bills?

Guthridge: The short answer—yes. EY found that 76% of consumers expect their energy provider to help provide advice and support to reduce their energy costs. Many utilities have some programs today, but they are often siloed and reactive once a consumer falls behind on their bills. Developing the insights and approaches to proactively engage consumers and offer advice and support that suits their home and personal circumstances is key.

Once we get beyond the basics, utilities will need to work with an ecosystem and innovate to work with customers. As an example, we found the main barriers to adopting new energy products and services are affordability, accessibility (e.g. not allowed to install at their home), and complexity. Solving these issues requires creative solutions that might for example include bringing in community groups to help educate, a bank to help with financing, and landlords and property managers to support retrofitting buildings. Utilities can be at the center of helping reduce customers’ bills by bringing together companies and communities.

POWER: What do consumers think utilities should be doing to incentivize adoption of electric vehicles?

Guthridge: Consumers are looking for help to simplify the purchase experience. They want their utility to offer tools to understand the impact an EV would have on their bill and overall spend, help them understand and apply for relevant financial incentives, and coordinate the installation of home updates that might be needed for charging. This means utilities need to become more aware of and get involved in the journey early, and help right through to installing and using the charging equipment in the home.

POWER: Why do many energy customers want options (rather than just one utility) when it comes to sourcing their electricity and/or natural gas? Is it to foster competition?

Guthridge: The energy experience is fragmenting and getting more complex and distributed. Sourcing energy is just one piece of the experience that is emerging. EVs, smart thermostats and other devices, home solar and batteries, are all merging into a broader energy experience especially as policy makers and utilities look to leverage consumer energy resources to enhance stability and flexibility of the system. EY sees the emergence of a new kind of consumer we call the energy omnisumer. This is a person or business that simultaneously participates in a dynamic energy ecosystem across a multitude of places, solutions, providers and commercial relationships. In this environment, we find that only 23% of consumers want a single provider energy relationship—the vast majority want options that they can select to align to their lifestyle, values, and price point.

POWER: How can utilities improve the experience for their customers?

Guthridge: The biggest thing utilities can do is to simplify inside and out. The energy transition is naturally creating disruption, The way we generate, transport, and use energy is changing faster than we ever could have imagined even a few years ago. Every consumer is being impacted by the shift and will continue to be in the years to come.

Simplification internally means questioning and reinventing processes, policies and approaches that may have been in place for decades. Simplifying externally means making the customer experience effortless. Digital customer interaction, proactive communication and engagement are a start. And what’s coming next is simplifying the consumer engagement path for new energy programs, products and services. From awareness through to adoption and advocacy—the customer path is challenging today.

EY did an exercise to see how complex it is in some markets to get home solar and battery storage. There are multiple parties both inside and outside the utility, price quotes, inspections, permits, rebate processes, etc. It can take months to get it done. This complexity is slowing the energy transition and hurting the image of utilities, even though they may play a minor role today. We found that 80% of consumers want their provider to play a role in their new energy product and service experience and in particular helping to offer advice and simplify this complexity. For utilities, simplifying the overall energy experience is an opportunity to engage customers and potentially find new revenue streams.

Darrell Proctor is a senior associate editor for POWER (@POWERmagazine).

SHARE this article