This post was originally published on Simple Energy’s website. Simple Energy is now Uplight.
Multiple changes are happening across Ontario’s energy sector. With the Independent Electricity System Operator (IESO) and the Conservation First Framework providing new solutions for local distribution companies (LDC) to achieve their goals, selecting the right business model for you can be challenging.
Ontario’s energy sector has undergone a tremendous amount of innovation over the last few years, in part due to the elimination of coal as a generation resource and the prioritization of conservation programs.
The IESO’s 2011-2014 conservation results show significant strides from the LDCs in particular:
- 98% of the full Ontario Energy Board (OEB) energy savings target of 6,000 GWh, and
- 60% of the full OEB peak demand savings target (1,330 MW).
Regulators, utilities and customers each play important roles in conservation. LDCs are tapping into technology solutions that fit into their business model and annual budgeting. In 2014, IESO and Horizon Utilities partnered with Simple Energy to provide customers a new innovative solution:an online engagement program as part of their conservation and demand management program. The engagement program rewards residential customers with AIR MILES® reward miles for reducing their energy use. The program, Take Charge – Save Energy – Earn Rewards shows that a virtual engagement platform can help customers manage their electricity costs and support Horizon Utilities’ conservation and demand management targets.
Similar activity is underway in New York, where online energy marketplace solutions have been featured in various conservation efforts, contributing to frameworks for new utility services. Parallels exist in the Conservation First Framework and New York’s Reforming the Energy Vision (REV). For example, utilities across the state including Orange and Rockland (ORU) and Rochester Gas & Electric (RG&E) have included a marketplace solution in their respective business plans. These utilities filed demo projects with the state’s Public Service Commission (PSC) this summer. (See figure above. Click to enlarge.)
Similarly, Horizon Utilities recently filed an all-encompassing business plan with the IESO that incorporates their Take Charge engagement program with a marketplace solution. An online e-commerce platform will provide Horizon Utilities residential customers with a store where they can purchase company-recommended energy-saving household products and services. Eligible products are integrated with instant discounts applied to the final purchase price.
Taking friction out of the coupon process develops opportunities for creating a compelling marketplace. Customer adoption rates are quicker when the shopping experience is streamlined and simple. Not only will a marketplace solution help increase product awareness, but it can help meet energy reduction targets and increase program participation. Coupled with an engagement program, a marketplace supplements a dynamic user experience by offering products based on customers’ energy usage in their home.
Solutions like a utility-branded marketplace help utilities achieve their goals at a low cost. E-commerce websites allow utility customers and third parties to directly interact, increase potential for wide-scale adoption and pair customers with solutions that best fit their needs — all while proving how the utility can generate new revenue streams in the process. Many believe there is potential to generate revenue from a marketplace solution with product vendors, third-party installers, transactions and ongoing fees.