Facebook, Microsoft demand better, more innovative customer service from utilities
Large energy consumers that believe strongly in renewables, like Microsoft Corp. and Facebook Inc., say the utility industry has more work to do when it comes to providing first-rate customer service in an evolving market environment.
Customers are seeking innovative solutions from utilities to meet their operational needs. At Facebook, for instance, reliability, cost effectiveness, and renewable energy are at the top of the list.
“This is a changing dynamic, a changing sector. The utility customer relationship needs to change as well,” Bobby Hollis, head of energy at Facebook, said during the Edison Electric Institute’s financial conference in Phoenix this week.
According to J.D. Power and Associates, a global market research firm that surveys a variety of industries on customer satisfaction, electric utilities came in last out of 17 industries.
“We know the main thing we want to see is a very symbiotic relationship with our utility,” Hollis said.
“These are really large dollars on both sides of the equation and we need to make sure that we’re getting the same level of attention as we look to accelerate capital spending and to bring on additional buildings at certain sites,” he added.
To keep up with its massive storage infrastructure needs, Facebook operates data centers that house tens of thousands of computer servers, requiring an enormous amount of electricity. Facebook has built four data centers with two more sites under construction. It also leases additional server space from data center providers.
Facebook recently announced it will open a data center in Los Lunas, New Mexico, and it worked closely with PNM, New Mexico’s largest electric utility, to develop a contract to provide the electricity. The center will be largely solar powered.
“When we came into New Mexico, we knew there was not a utility tariff structure that worked for us to do what we wanted, which was to be able to get to 100 percent renewable energy,” Hollis said.
“We immediately started working with PNM to get there. And the reason that was so important is because what we found is the utility relationship on existing sites where we don’t do that on the front end become impossible,” he added.
At Microsoft, manufacturing and certain other operations have been 100 percent powered by renewable energy since 2014.
The company operates about 100 data centers around the world and is always on the lookout for locations to open more, often with a price tag of $1 billion-plus each.
Microsoft also announced it aims to have its data centers rely on a larger percentage of wind, solar and hydropower electricity in the future. Its data centers currently rely on renewables for about 44 percent of their electricity needs; Microsoft’s goal is to grow that percentage to 50 percent by the end of 2018.
Data centers are unique, in that many incorporate additional energy capacity in the form of backup diesel generators that improve reliability in the event of power outages. Microsoft has been exploring alternatives to diesel and wants to use more sustainable types of energy.
An innovative solution for backup generation is one area that is ripe for better customer service.
“How can we change that mindset, how can we invest more in those generators and have them serve the grid rather than just serve as backup,” said Kenneth Davies, director of Renewable Energy at Microsoft.
Microsoft has data centers in five different regulated utility regions of the country, Davies said. “But in only one have we managed to actually structure a tariff that we believe helps us and encourages us to grow long term.”
When Microsoft opened its data center in Wyoming recently, it worked with Black Hills Energy to come up with a solution where the energy company would buy power on the grid and sell it to Microsoft.
Utilities need to acquire behavioral insights into their customers in order to improve service.
“There is a lot of exciting stuff happening in this industry, but utilities need to do more and the tools are out there,” said Richard Caperton, director for national policy and partnerships for Opower, a unit of Oracle Corp. Opower provides cloud services to the $2.3 trillion utilities industry and helps utilities deliver a better digital customer experience.
The biggest gap in customer service Opower sees is with the utilities’ ability to attain a 360 degree view of the customer that goes beyond a billing ID and its electric usage for the prior month. Caperton thinks that utilities also need to understand the demographics of their customers to proactively address their needs.
“Your cell phone company will tell you when you’re using too much data. The utility company should tell people when they are going to get a high bill.”
Opower has developed a segmentation and targeting tool that allows the utility to analyze customers across 100 different attributes. “Once you narrow it down, you are able to save money on your communications,” Caperton said.
