EDITOR’S NOTE: The energy customers of America are up for grabs. They are interested in getting as efficient as possible and they are eager to explore new ways of securing their own energy supplies, reliably. Incumbent monopoly utilities face new challenges as they scramble for new business models – the theme of the first Energy Times Executive Energy Briefing in Washington. The Energy Times recently talked with Steve McBee, NRG Home’s president and chief executive, about the changing market. The 46-year-old mountain biker and snowboarder’s comments, edited for style and length, follow.
This is the first of a two-part series. Next week: “Engaging Every American Consumer.”
Energy Times: What is the new energy customers like?
McBee: New technologies have really upended the traditional centralized provider-driven service models and replaced them with decentralized, demand-driven service models. That has impacted the customer. It has empowered the customer in ways that are unprecedented in the marketplace. In the future, a winning company is going to get their head around the fact that its not about the meter, it’s not about kilowatt hours, it’s not about line capacity. It’s about providing customers products and services that have the same features that they expect from providers at every other market in which they do business. They want products and services that are affordable, reliable, convenient, tailored, clean and sustainable. That’s the overarching idea behind the strategy that we’re driving.
Energy Times: Are you competing with utilities?
McBee: People ask me, “Who is your competition.” We’re the only energy company today that has a ready portfolio of products that could really drive that consumer energy model that I just articulated. But we also compete against everybody. We have unbelievable competitors in our retail business. We have great competitors in our home solar business. We have great competitors in our portable power business. In the other businesses that we’re really looking hard at - like the connected home, community solar and water and energy storage – there are really good competitors. The way that we really win is we’ve got to be able to deliver products and services that could compete head-up in each of those verticals. But the way we ultimately win is that we enrich the stack of products and services that we have. We’re able to really curate them in novel ways that make sense for what our consumers’ needs.
Energy Times: What will the utility sector look like in a decade?
McBee: For a very long time, the grid is going to have a functional role to play in making the energy industry work. But I think the role of the grid is likely to change significantly over the next five to ten years. It’s going to have more of a secondary role than the exclusive role that it’s had for the last hundred years. Clearly, the utilities have to decide if they going to adapt to that or if they going to fight against that change. We’re living in a really powerful moment. Change is happening not in linear ways but in exponential ways. It’s creating a whole range of really awesome but also very disruptive products, services and tools that are creating a lot of headaches for incumbents. Today, the world is flooded with cheap capital. You can get it from Silicon Valley, venture funds, large corporations, enterprising non-governmental organizations and from the crowd. That allows entrepreneurs to bring a lot more products to market, a lot more quickly. In the energy space, we have to get our head around the idea that the industry is changing quickly. The future’s going to look radically different than the present. You have a lot more to lose, you have a lot more at risk, if you hesitate or choose to hedge against that change. You have to get out on the edge, lean into it and iterate your way towards the final solution as things develop around you. I don’t know how the utilities are going to be thinking about all those changes. I’m just focused on how we’re thinking about them.