SUCCEEDING IN TOUGH TIMES

People keep telling me about all the innovative ways to cut utility usage, mostly electricity, and it seems like company leadership would be getting pretty concerned now that the government, media, and education industries are set up to take away utility business.

While utility management is trying to increase budgets to increase services, other people are trying to knock down sales, giving tax credits and stimulus money to those who create new utility sources and constantly telling everyone to cut back on usage.

You’re aware of all these strategies, but here are just a couple of items that show a 20% cut in sales is on the way.

1. This week a huge utility customer announced use of Bloom Boxes to reduce on line electricity demand by 18%. Basically, they’ve switched from their utility company to propane (saying that natural gas is somewhere down the line).

2. “The state of Ohio passed legislation in May 2008. Senate Bill 221 requires electric utilities to reduce electricity demand by 22% by the end of 2025. Dayton Power and Light of Dayton, OH, is working to implement a series of energy efficiency programs to meet state requirements.”

It seems almost anti-American to object to these strategies. Who could be against saving “resources?” Who could be against delaying the need to build new power plants?

So where does this leave you as you try to balance budgets and provide service with shrinking revenue? In some cases, it leaves you in the red! Raising the price of utilities has worked for years, but a time is coming when utilities will need to find other revenue sources.

Some utility companies are already taking action to increase revenue in other areas to compensate for part of the sales they’ll lose in this “greening of America.”

1. First Energy — selling light bulbs on their web site . It’s probably not a huge profit item, but it keeps people coming back to their site and makes First Energy front-of-mind when other energy saving products are purchased.

2. First Energy — This company has a line of products ready to help with water conversation also

Foregoing profits, some utilities have chosen to simply encourage users to reduce consumption as did Dayton Power and Light. Having been ordered to cut electrical production they’ve they are underwriting the cost of replacing AC and heat pump systems with $200-$600 rebates. Likewise, “DP&L will pick up the appliances for free and send them to be recycled in an eco-friendly way. Then they’ll send you a $25 check for participating.”

A good question to ask is, “Why aren’t utility companies maximizing profits by selling products that customers want to buy?” Instead of offering rebates for buying from someone else, utilities can sell those products themselves, or they can partner with current businesses to be compensated when sending customers to the hardware store.

Can utilities sell residential and commercial emergency generators? Is it feasible for utilities to sell solar, wind, or other systems that will generate electricity? Is there some restriction against utilities selling water conservation products? And do we need to restrict our thinking to residential products? Can’t utilities also sell whatever is needed by larger commercial customers? What about those “sink water into toilet” items shown in the picture above — is this realistic? Will it sell?

Utility leaders are responsible for making a profit as well as for providing the utilities. Even co-ops find that balanced budgets help keep them in business, so if there are restrictions on the kinds of products utilities can sell, we need to take a look at how those restrictions can be changed and do all we can to maximize profits.

Check out the Utility Leaders Discussion Forum at http://MunicipalU.com Find out what other municipal utility leaders are talking about, ask questions, or just post a rant about the situations you encounter.

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