An Ignoble Experiment

2. Price, billing and payment satisfaction way up among utility customers

Two state utility regulators' decisions highlight the growing controversy generated by increasing power production from distributed generation, particularly rooftop solar panels, and challenges in rate designs for U.S. utilities, according to Fitch Ratings. While distributed generation currently represents a small part of total power generation in the U.S., Fitch expects it to grow substantially due to continuing improved efficiency, lower cost and federal and state energy policies, leading to an increasing share of total system power sources.

Credit: Wikimedia Commons/Santcasas20

Net metering allows customers to buy and sell supply to and from the utility. It can create pricing incentives to benefit one utility customer class over the majority of the customer base. Integrating renewable and efficiency energy policies into an equitable customer rate design remains among the largest challenges facing the U.S. utility industry.

Idaho Power's proposal to raise service charges for residential and business net metering customers to more fully reflect their use of the company's distribution system was rejected by the Idaho Public Utilities Commission last week. Last month, the Louisiana Public Service Commission voted against a similar proposal by Entergy.

The Idaho Power decision recognized the potential "overbuild" of systems that net metering incentives could create and provided for credits for any excess generation rather than cash payments to the net metering customer under a feed-in-tariff. Credits for excess supply and caps on total net metering production with higher fixed demand charges are essential components of rate design as net metering programs grow, according to Fitch.

For more:
- see this article

Related Article:
Net metering's $92M benefit

Read more about: Fitch ratings, net metering
back to top

This week's sponsor is AESP.

By Barbara Vergetis Lundin

Comment |

3. American Water preparing for the next 100-year event

Customer satisfaction with residential electric utilities has increased substantially from 2012 driven primarily by improvements in billing/payment, price and outage communications, according to the J.D. Power 2013 Electric Utility Residential Customer Satisfaction Study.

The study measures customer satisfaction with electric utility companies by power quality and reliability; price; billing and payment; corporate citizenship; communications; and customer service.

Overall satisfaction among residential customers of electric utilities has increased substantially in 2013 to 639 (on a 1000-point scale), up 14 points from 2012. While performance in all factors improves in 2013, billing and payment satisfaction (719) increases by 19 points, the largest increase among the six factors. Power quality and reliability, an important driver of customer satisfaction and the second-highest-scoring factor, has improved to 692 from 677 in 2012. Communications satisfaction increased for a third consecutive year, climbing to 585 in 2013 from 579 in 2012 and 575 in 2011. Satisfaction scores in price (551) and customer service (706) are the highest in the past four years, with customer service increasing by 9 points from 2012.

With severe weather events across the United States, longer outages were reported in 2012, yet electric utilities have improved their outage communications before, during and after these events. Satisfaction increases when utilities proactively communicate outage information regularly and clearly via the channels customers prefer, including utility-initiated phone calls, emails, text messages and social media sites.

"In addition to improving outage communication, electric utilities have made great strides in improving customer perceptions regarding billing and payment," said Jeff Conklin, senior director of the energy practice at J.D. Power. "With such a dramatic increase in billing and payment satisfaction in the 2013 study, it's clear that the electric utilities have listened to the Voice of the Customer by providing them with many choices to receive and pay their bill and with improved information on their billing statements."

According to the study, satisfaction increases when customers are offered billing and payment options. Satisfaction among customers who select their own payment due date is 756, compared with 714 among those who do not select a due date. Satisfaction among customers who receive an electronic bill is 745, compared with 709 among those who receive only a paper statement. Among customers who are on a fixed budget bill payment plan, satisfaction is 736, compared with 718 among those who are not on this plan. Billing and payment satisfaction increases by 54 points when billing statements include a consumption graph (740). Satisfaction is highest among customers who use their utility's online website to check their account or pay a bill (742), followed by auto-deductions from a bank account (736); recurring credit card payments (726); and through bank's online bill payment (717). The percentage of customers who mail their payment has decreased to 26 percent in 2013 from 29 percent in 2012, indicating that customers are using alternative payment options.

Price satisfaction improves substantially for a second consecutive year (+12 points), as customers indicate lower average bill amounts, down $3 per month from 2012 to $132. Price satisfaction is 101 points higher among customer who say they are "very familiar" with their utility's energy-saving programs than among those who say they are only "somewhat familiar."

Power quality and reliability (PQ&R) increases by 15 points in 2013, driven by a 19-point increase in the West region. The study finds that utilities have increased their number of communications with customers regarding lengthy outages in 2013. The most satisfying sources of outage information are emails from the utility (762 PQ&R); text messages from the utility (736); utility's social media site (724); calls from the utility (718); and customer emails sent to the utility (703).

For more:
- see this article

By Barbara Vergetis Lundin

Comment |

4. GHP increasingly important to GHG reductions

During a significant weather event, a water utility's level of preparedness can mean the difference between temporary inconveniences and serious health and environmental consequences.

The scientific community widely believes that climate change impacts include rising sea levels that contribute to increased destruction during severe storms, as well as increased droughts that severely impact agriculture, businesses, fire protection and drinking water supplies. According to American Water, climate change is having a profound effect on how communities can reliably access clean water, causing poor water quality and scarcity and putting significant stress on the water infrastructure. In 2011 and 2012 alone, there were 25 climate-related extreme-weather events that each caused about $1 billion in damage to the economy.

"Water and wastewater systems are built for resiliency and sustainability of operations during weather events or other circumstances that could potentially interrupt service, but the increasing frequency of significant events in recent years, caused by climate change, has created a renewed focus on business continuity planning and emergency response for water utilities," says Jeff Sterba, president and CEO of American Water. "When events that were historically considered to be '100-year' events happen more and more frequently, utilities must prepare for a new normal."

In addition to climate change impacts, the critical state of the nation's water and wastewater infrastructure, as well as "man-made" factors such as urbanization and population growth, are further contributors to the challenges water utilities face in planning for sustainability of operations. American Water's approach to mitigating these circumstances includes risk assessment through engineering planning studies, and risk management through prudent investment into its systems, integrated water resource management, and the use of innovation technology. Four years ago, American Water committed to reducing its carbon footprint by 16 percent by 2017 and is on track to achieve this goal through innovation and reduced energy use. Sustainability and resiliency planning efforts enable the water industry to serve its customers better while helping to address climate change.

For more:
- see this article

Read more about: Climate Change
back to top

By Barbara Vergetis Lundin

Comment |

5. Caribbean Community works out renewable energy strategy

Geothermal heat pump (GHP) systems, or ground source heat pumps, are a growing part of using renewable energy sources for building heating and cooling globally. In fact, worldwide revenue from GHP systems will grow from $6.5 billion in 2013 to $17.2 billion annually by 2020, according to Navigant Research.

Harnessing moderate and constant temperatures just below the Earth's surface, GHP systems play an important role in global strategies to reduce greenhouse gas emissions and lighten the load on an overtaxed infrastructure. First used in the 1940s, GHP systems are being deployed in nearly every region of the world and in residential, commercial, institutional, and industrial environments with great success.

"The global economic downturn, which slowed construction, reduced government investments in cleantech products, and limited the ability of developers to acquire capital for high-end construction products, has taken a toll on manufacturers of GHP products," said Mackinnon Lawrence, principal research analyst with Navigant Research. "However, the market stands to experience strong growth in the coming years, as government policies create incentives for the use of energy efficiency resources and manufacturers reduce the upfront cost of GHP installations."

Although GHPs rely on electricity to run, they are considerably more efficient at heating and cooling than air-source conditioners and other traditional HVAC competitor solutions. While they do not directly displace fossil-based energy generation, GHP systems can reduce the dependence on fossil fuel-generating sources by a factor of up to 71 percent. Used on their own, GHPs are capable of delivering large reductions in energy use and peak demand in buildings, offering even greater benefits when used in conjunction with clean energy generation and whole building efficiency, according to Navigant.

For more:
- see this article

By Barbara Vergetis Lundin

Comment |