Forbes – Energy startups can increase their chance of success by ensuring they offer a profit incentive to utilities, John Rowe, former CEO and chairman emeritus of Exelon said Wednesday in Chicago.
“Utilities are very obstinate creatures,” Rowe said at the Energy Thought Summit at Chicago’s Symphony Center. “We know how to say no, and we know how to say yes and then not do anything. We’re very good at inertia. And the reason for that is not that we’re enduringly stupid. Some of my favorite people run utilities.
Before Rowe joined Exelon, he found a profit incentive for an energy conservation program with New England Energy Company, and once it became profitable, he said, there was no longer any problem getting conservation done.
“And that’s true for almost everything you do. Think about what you need. Think about what the end use customer needs. And think about what the utility needs, if the utility is your intermediary, because if you can’t do something that it needs economically, the odds are it will be a very slow moving project.”
Other utility CEOs at the summit hinted at the kinds of innovations they need.
“With prices dropping for battery storage, ComEd CEO Anne Pramaggiore said she sees opportunities for community-scale battery storage to keep the lights on during outages.
On the customer side, she said, there are even richer opportunities for innovations that give customers information and control of their energy use: “How do I manage my usage? How do I lower my bills? How do I take control here?”
“We love to partner with these kinds of companies,” Pramaggiore said. “We feel like we’re the marketplace, the enabler. We want to get that out there for customers.”
Utilities could get a lot smoother at dealing with customers, said Kansas City Power and Light CEO Terry Bassham. Utilities find themselves doing things they never expected to to do, things they may not be particularly adept at, like reporting outages through social media.
“That is different than what we’re used to dealing with and yet we’ve got to make sure we’re focused on that,” he said.
“We don’t need more electrical engineers. For all the engineers in the room, I love electrical engineers, don’t misunderstand me. But what we need are human engineers. We need people who know how to communicate with people, who know how to deal with people, how to work complicated issues, complicated regulations and figure out good solutions.”
That doesn’t just mean employees, but also technologies that help utilities navigate a rapidly changing marketplace.
“It’s the end of the world as we know it, and I’m excited about that,” Bassham said. “I have never seen as many themes that are making a basic change to how we do our industry.”
As upbeat as Pramaggiore and Bassham sounded about opportunity, Rowe suggested startups could be more pragmatic about survival.
“Here’s the thing. Out of all these various things that interact with a utility, probably nine out of ten will disappear very shortly. And the tenth one will get more important than the utility. The issue is having any idea which are the nine and which is the tenth,” he said.
“The key message for those of you who are casting your personal futures on this sort of thing is that your best chance of winning is if you think of the utility’s needs as well as your own.”