Interviewer: Okay, okay good. So when you look at how utility companies are doing this, how do you find that the BI impacts the customers of a utility company?
Jessica Little: Well, it impacts the customers in several different ways. The primary way is that it gives customers more choices. I mean tradition utilities have priced their energy according to a flat rate, use so many kilowatt hours, and you pay so many cents per kilowatt. Well now with this additional information that utilities will have about the way in which energy is used by their individual customers, they are able to price it differently and match the pricing closer with their actual costs.
And so, this then allows them to do things like set time-of-use rates. This is where you pay a different rate depending what time you use the energy. It also enables critical peak pricing where you may pay a higher rate on certain critical days when the peak demand is very large. Additionally, it also enables things like dynamic pricing, where the price will change over time. That's an area where I’ve been focusing a lot.
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Interviewer: What do you say?
Jessica Little: Its segmentation. For example, it is all about delivering the right rate to the right person for the right resident themselves for residential customers because if you want to entice a customer to shift their loads for example from peak hours from say 3:00 to 6:00 p.m. to any other time, then this particular customer does not have the ability to do that.
For example, if your AC doesn’t have a sensor to cycle off or perform other things, then all of your initiatives are in vain because you are not targeting the right customer. So it goes back to customer segmentation and offering the right rate to the right customers.
Interviewer: Okay. How about from in terms of the perspective of the utility company, how can BI benefit them?
Jessica Little: There are some obvious economic benefits for the utility. First off, they can operate more efficiently with more detailed information about their customers and when they use energy along with more detailed information about the operation of their grid. They can operate more efficiently and to keep the cost down, you can also match their cost more closely with the prices of a day they charge. So there are some significant benefits there in terms of how they operate the grid and the relationship they can establish with their customers. And BI really enables them to establish a different kind of relationship with their customers.
Interviewer: Okay great. So is there a key message that you would like to leave us with today?
Jessica Little: Yeah I think the utility industry is facing a lot of challenges these days and at first blush it can be overwhelming in terms of the scope of this but we have to realize that they don’t need to reinvent themselves. You can rely on these business intelligence techniques that are being applied in other industries such as telecommunications, retail, and financial with large amounts of data. So the challenge for the utility industry is to learn what’s been accomplished in other industries and adapt that to their industry and then it becomes a manageable task. I think it’s an exciting time for utilities.
Interviewer: Okay
Jessica Little: I would also like to add that the utilities in my opinion should first forget about the word smart. They should first link their financial operational data and get basic business intelligence takes out of the existing grid. Once they have handle on that they can expand into the smart grid aspects, etc. They shouldn’t wait, they should embark the journey and as soon as possible.
Interviewer: It’s the time, the time is now.
Jessica Little: The time is now.