Electric utility customers are mad... and they’re not going to take it anymore. Those words, written nearly 40 years ago by Academy Award-winning author Paddy Chayefsky in the movie Network, aptly describe today’s utility customers, according to John Egan, president of Egan Energy Communications Inc.
Egan is the founder and president of Egan Energy Communications, Inc., a communications-consulting firm. He will address whether or not utilities can make peace with their customers in the upcoming Western Energy Institute’s Spring Energy Symposium, March 7-9, 2012, at the Aria Resort and Casino in Las Vegas, Nevada. He will speak on a panel discussion, “Communications Challenges in a Rough Economy.”
“Customers and activists are using a broad range of communications tools — old media as well as new media — to broadcast their dissatisfaction with utilities,” said Egan. “Customer dissatisfaction with utilities can carry significant consequences—financial, operational, and managerial — that utilities ignore at their peril.”
Non-governmental organizations like Sierra Club and Greenpeace are targeting utilities, particularly ones that rely heavily on coal, in an effort to change decision-making in the executive suites. The Sierra Club’s recent campaign, “AEP: What’s Your Number?” and the Sierra Club’s ongoing “Occupy Duke” protests are eye-catching attempts launched to shame utilities into changing their business practices.
“These and other shaming actions may influence upcoming utility rate cases, where dramatic changes are possible,” Egan said. State utility regulators are either elected by voters or appointed by a state’s governor. But in either case, they are often compelled to respond to consumer and political pressures, he said.
Egan noted that a committed group of activists in Boulder, Colorado, were instrumental in passage of ballot measures last November that is moving the city on the path of municipalizing the local distribution system owned by Xcel Energy. That utility generates about $100 million of revenue annually from its customers in Boulder. Some portion of that revenue would be lost if the city creates a municipal utility.
“The prolonged controversy over PG&E’s installation of Smart Meters in California is another example of what citizen activists have accomplished,” Egan said. “Unless other utilities want to experience the pain inflicted on PG&E, Xcel Energy, AEP, and Duke, they must work harder to show customers that they are listening to, respecting, and wherever possible, working collaboratively with customers — or face uncertain consequences at their public utility commissions.”
More than 100 utility rate cases will be filed this year, marking a continuation of a surge in regulatory activity driven by mergers, fuel prices, environmental regulations, weather-driven outages, capital construction projects and new customer programs like smart meters. In deciding a utility rate case, state utility regulators must find that a proposed action is in the public interest.
Utilities have the tools and opportunities to respond effectively when they are targeted by guerrilla protests, but utilities face significant organizational challenges, Egan said. Historically, they have been unable to move as quickly as protesters and are uncomfortable with the kind of direct confrontation espoused by activists.
Egan brings much experience in research and crisis management to his seminars. Since 2004, he has been an adjunct faculty member at the U.S. Office of Personnel Management, where he has worked with more than 100 federal agency leaders in more than a dozen “media spotlight” workshops for the Executive Development Seminar (EDS) on “Leading Change.” His workshop participants have consistently rated his workshops a 4.0 to 4.5 on a five-point scale.
Egan also taught business management courses at Front Range Community College in Westminster, Colorado.
Prior to founding EEC, he was for nine years a research director at E SOURCE, a utility-industry research and business intelligence firm based in Boulder, Colorado. John led the firm’s practice area in communications, marketing, and strategic planning. In that capacity he spoke at more than 35 industry conferences and web conferences. He also provided communications consulting to the firm’s clients and co-directed public speaking professional development workshops for E SOURCE employees.
Before joining E SOURCE in 2000, John coached corporate executives on key messaging and crisis communications as part of his work directing media relations activities for Salt River Project, a Phoenix-based $3 billion power and water utility. Earlier in his career, John was a reporter, senior writer, and co-editor at The Energy Daily, an energy-industry news service based in Washington, D.C.