10 predictions for North American utilities in 2013

In 2013, North American utilities will be faced with the need to beef up lagging revenues to cover infrastructure investments in a climate where customer satisfaction is declining and reliability is threatened by cyber attacks and extreme weather. At the same time, utilities that have invested in smart meters and smart grid technology will move to the next phase to realize value. In this scenario, utility IT will invest time and dollars in outage response, security, business efficiency, and customer engagement.

The current business and regulatory environment for utilities forms the basis for our 2013 predictions. In 2012, utilities were “between a rock and hard place” and this situation is not expected to change going into 2013. Energy consumption is down, but utilities are faced with needing to make major capital investments in physical infrastructure. Utilities are filing for rate increases, but public utilities are reluctant to grant proposed increases, especially if customer satisfaction with utility performance is flagging.

With capital investment going to physical infrastructure and regulators bent on belt tightening, less money will be available for IT investments. In 2013, the challenge for CIOs will be to create business efficiencies, while being creative in  deploying technology to improve reliability and enhance customer engagement.  IT will become more involved in grid management.  Enabling technologies ripe for investment are analytics, mobility and social business.

The challenge for utility customers will be to better manage their consumption given the prospect of increased rates.  In anticipation of higher energy prices, residential customers will warm to home energy management and business owners and operators will seek education on smart buildings.

Given this scenario, IDC Energy Insights makes the following predictions related to the North American utility industry:

  1. Utilities Will Make Outage Prevention, Readiness, and Response Top Priorities for 2013
  2. Smart Electric Meter Shipments Will Fall Below 9 Million Units in 2013
  3. In the Next Five Years, Consumer Spending Will Transform Home Energy Management
  4. By 2017, 70% of AMI Systems Will Integrate to a Distribution Control System
  5. In 2013, Utility Incentives Will Drive $160 Million in Smart Building Technologies, Ensuring Energy Efficiency Is Here to Stay
  6. Utilities Will Have Breathing Room to Plan as PEV Penetration Is Lower than Expected
  7. Utility CIOs’ Security Practices in 2013 and Beyond Will Center on Risk Management
  8. CIOs’ Agenda for 2013 Will Focus on Bringing Business Efficiencies Through IT Initiatives
  9. In 2013, Marketing and Customer Ops Will Increase Efforts in the Social Business Space
  10. North American IT Spending Will Grow at a Combined Annual Growth Rate (CAGR) of 4.92% Over the Five Years from 2010 to 2015

These predictions were presented during a webcast, December 10, 2012.  Additional details on the predictions can be found in the webcast replay or in the report.

We welcome your opinions and comments!

This article originally appeared on IDC Energy Insights.

IDC Energy Insights provides research-based advisory and consulting services focused on market and technology developments in the energy and utility industries. IDC Energy Insights serves a diverse global client base, including electric, gas and water utilities, IT vendors, independent power producers, retail energy providers, oil and gas companies, equipment manufacturers, government agencies, financial institutions, and professional services firms. IDC is a subsidiary of IDG, the world’s leading technology media, research, and events company.