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Electricity: Will the Energy Services Gulf Become the Next
Digital Divide?

by Bob Shively, Enerdynamics President and Lead Instructor

Concerns over the Digital Divide are widespread. As described by Internet World Stats:

 

“The Digital Divide, or the digital split, is a social issue referring to the differing amount of information between those who have access to the Internet (especially broadband access) and those who do not have access.”[1

 

Lack of access to adequate Internet service may result in:

  • reduced economic growth
  • growth in economic inequality
  • lack of social mobility
  • a restriction on the free flow of information 

Similarly, significant attention has been paid to the lack of access to reliable grid power in certain regions of the world. [2] But here in the United States, another divide may be coming — the gulf between energy services available in competitive retail markets as compared to utility services available in markets where the utility company is the only retail provider.

 

There was a time when phone service local, long distance, and hardware was provided by the Bell Service monopoly, colloquially known as "Ma Bell." Imagine if today’s smart phones, texting, apps, and other services we depend on were all delivered by just one regulated monopoly company. Would such choices and "extras" even exist? Now look at this map showing where competitive electric retail services are open to customers in the United States and Canada:

 

 

 

 

 

To all of you living in blue areas on the map, will you soon feel like a 20th century Ma Bell customer surrounded by states and provinces with 21st century technology and services?

 

But, you might argue, electricity services are different, aren't they? It's just power being delivered to a meter, and all that matters is price and basic reliability, right? Wrong. Already electric retailers in some states are offering various interesting services to entice and better serve customers. Examples include:

  • Direct Energy offers various rewards programs to their customers
  • Comcast and NRG’s Energy Plus retailers are concluding a test program in Pittsburgh that bundles services such as cable TV, electricity, and home automation with perks like free HBO or Showtime and free gift cards for signing up
  • NRG offers eVgo, which provides various electric vehicle charging services to residential and business customers
  • Numerous retailers in the Northeast offer demand-response related programs
  • Green Mountain Energy offers various renewable programs including solar installation, buy-back of excess solar generation, and solar community projects with bill credits

Over the next decade, the potential for more sophisticated services is likely to explode. We have started to see this as both utilities and retailers are creating services around Google’s Nest thermostat. Soon our homes will be inhabited by the “Internet of Things,” meaning that almost all our device and appliances will be connected.

 

According to the website DataFloq.com the number of smart devices on the planet will increase from two billion in 2006 to 200 billion by 2020. This is equivalent to 26 smart devices for every person on the planet![3

 

 

 

Electricity's future may lie in smart devices each bidding to buy power from a competitive marketplace only when the form of power one desires is available. That might be low-priced power, green power, or some other product related to what one personally values. And it is likely that the future will offer ways to increase efficiency that will result in many new ways of using electricity with little impact on one's total monthly bill.

 

Of course, utilities can offer such services, too. But with no profit motivation, the often stifling effect of regulation, and the lack of competition to drive innovation, it is hard to imagine how utilities will keep pace. Perhaps the utilities will find a way to open their systems to third-party service providers without giving up the supply function, but this seems much harder than simply having open retail competition. 

 

So the question remains, will we soon see a new push for retail competition, or will we simply become a country with a wide gulf in energy service availability?

 


Footnotes:

 

[1] The Digital Divide, ICT and the 50x15 Initiative, http://www.internetworldstats.com/links10.htm

[2] Modern Energy for All, http://www.worldenergyoutlook.org/resources/energydevelopment/

[3] See https://datafloq.com/read/internet-of-things-will-make-our-world-smart-infographic/302

 

 

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