It seems as if every week, my cable service provider reminds me that I am not a Triple Play customer. I’m still holding onto the traditional land-line dial tone for my home telephone. Part of my justification is the long-held belief that hard wired, 48 volts from a central office is better than ones and zeros over a high-speed data connection. I am certain that this steadfast, but traditional view, is backed by a belief that telco dial tone is a necessity to support a 99.999 (five nines availability) phone line in an emergency (BTW a word of advice from my son who is a paramedic: make sure you have an ICE—in case of emergency—entry on your cell phone contact list).
So what kind of emerging bundles are happening in the energy space? Few power utilities have had a successful retail communications offering (Billy Ray and The City of Glasgow being one of the notable exceptions). But we are now starting to see a bundle¬—or as I would like to call it, a converged offering that has been a long time aspiration for many utilities—yielding energy efficiency and demand response value from the combination of energy management and alarm security services.
Some of the large players in this space, namely ADT and Honeywell, are actively marketing energy efficiency and energy conservation services along with their traditional home monitoring and protection services. ADT’s Pulse system makes this point clear in its tag line which states, “It’s not just security, it is custom home management;” Honeywell’s LYNX system champions, “With our pre-programmed Z-Wave® enabled energy management solutions, you won’t believe how easy it is to stay comfortable, save money and save energy without having to change your lifestyle!” Power utilities could greatly improve their customer experience and operational efficiencies by leveraging the marketing, deployment, and support resources, such third party providers by layering in intelligent grid analytics and demand response (DR) control algorithms from companies like Zome.
But does offering security AND energy management as a bundle make sense?
For many years, I have been a strong advocate of providing a common sense approach to intelligent energy efficiency. It’s only logical to connect the dots between a security system set in “away” mode and a home automation system that automatically puts the home in energy conservation mode—such as turning off the water heater, and setting back the thermostat. I also believe that with automation systems such as this and advanced metering infrastructure (AMI), other services that are “conservation-centric” could be offered by entrepreneurs willing to take the step into customer intimacy in the near future.
Many people may remember the business concepts that floated around the industry about fifteen years ago—EnergyOne and Home Service Solutions (HSS) were two of them. Both of these offerings combined products such as retail energy service, telecommunications services, internet access, alarm security services, and home warranty services under a single bill. The HSS approach included discounts (up to four percent) of the total bill, if you put this on your Universal Services credit card. These approaches may have been ahead of their time.
I welcome your feedback and your thoughts on questions, such as: What is different now? Do smart phones change the game?
By: Ron Chebra, vice president, Management & Operations Consulting, DNV KEMA Energy & Sustainability