Knowledge is power

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Demand is down. Costs are increasing. Rate cases are risky. Regulators are cautious.

Notwithstanding major moves such as mergers and acquisitions, is “top-line growth” a thing of the past for utilities?

The answer may be yes if utilities employ traditional top-line growth strategies in the traditional way.

In 2012, utilities were awarded about half the recovery they asked for through rate cases, and the average awarded return on equity dipped below 10%. With major investment requirements looming, utilities must find innovative ways to grow the top line.

To serve these individuals, organizations need to:

  • Develop the capability to collect accurate, reliable and timely data
  • Derive the right insights from the data
  • Share the data and insights whenever appropriate

 

Strategically applying analytics to develop insight into the customer, asset and regulatory functions may be the key.

 

Utilities have access to an ever-increasing store of useful data. Leveraging that data across the enterprise can provide utilities with fact-based, objective insight, leading to more successful rate case results and innovative growth opportunities.

The results can be significant:

  • A 1% increase in authorized rate base equates to $10 million in earnings for the average US investor-owned utility.
  • Moving from the third quartile to the first quartile in revenue collection equates to $12 million.
  • Utilities with higher customer satisfaction have higher returns.