Take Michigan's Consumers Energy, which provides a free service to its customers so that they can track their home energy use. First-time users visit the utility's web site where they fill out a form with such questions as how many rooms, appliances and residents. The service then provides a near-instant analysis to help customers understand why energy use has increased or decreased for a selected period.

The "service provides helpful information about how customers can manage their home energy usage," says Sue Swan, the utility's vice president of customer operations. The "service allows customers to examine their current electric and gas use in comparison to previous months. Knowing how homes use energy is helpful in making decisions about how and when to conserve energy."

Utilities that offer such programs may also be able to increase their revenues. It's a matter of making the public aware of the initiatives that are available and how those offerings can increase the energy efficiencies of an organization or household. Some utilities, for example, may buy software that analyzes energy use and then recoup - or even profit from -- their investment by selling energy conservation services.

The ideas are not passé. In fact, the Internet is used as a business medium and associated online sales are alive and kicking. The key lesson over the last five years or so is that the web must be leveraged with other corporate assets or used in combination with businesses that have complementary strengths. The business model that may thrive is one that blends the strengths of traditional brick and mortar operations with those of the nimble and technologically savvy enterprises.

"We are advising our customers that, as a result of rising natural gas prices, there will be increases in their energy bills this fall and winter," says Donna Backstrom, energy efficiency specialist at MidAmerican Energy that, along with Consumers Energy, works with Nexus Energy. "Because of this, through heavy promotion we are driving customers to these online tools to manage their energy usage."

The Leap

Certainly, the leap from traditional utility services to ancillary ones that revolve around the Internet has been more painful than previously anticipated. The momentum has also been lost because deregulation nationally has stalled, which has put entrepreneurship within many utilities on the backburner. But the need to increase efficiencies and enhance productivity is stronger now than ever before.

Therein lay an opportunity for legacy providers to team with companies focused on the Information Age. By combining one's technological expertise and competitive mindset with the other's brand name and access to markets, they can work together to meet the demands of customers. The most progressive incumbents have incorporated some aspects of the New Economy into their business formulas. And while markets are now dazed, good ideas and solid implementation strategies will eventually be rewarded.

Portland General Electric is among those utilities taking a longer view. It sponsored a survey that found that facility managers spend less than 5 percent of their time on energy matters. Rather than fight that reality, it chose to provide an all-encompassing web-based service that helps such managers not just with lowering their power bills but also with improving their operations and maintenance procedures. Meanwhile, other utilities are providing an array of online tools to help households examine their energy consumption.

"These integrated energy management tools put utility customers in control by giving them options, including a full energy analysis, pertinent appliance calculators and important links to programs," says Harvey Michaels, CEO of Nexus Energy.

Web-based technologies that give utility consumers immediate feedback on how they can reduce their energy costs are one thing. And, the expertise that permits utilities to send signals via the web and then reach inside the premises of homes and businesses are another. While the latter is not as invasive as it may sound, it does require consumers to forego energy usage during peak periods in exchange for lower electric bills.

A deeper understanding of the powers of the Internet must be accompanied by sustained energy conservation. Most consumers think of themselves as environmentally conscience and will respond to well-marketed initiatives. Legacy utilities and technology-based companies can prosper together in this endeavor. Marketing and back office expertise, for example, can be combined with brand names and financial savvy.

"As online customer care becomes more mainstream and competitive, utilities have to work harder than ever to meet their online customers' needs," says Ethan Brown, research analyst with Boulder-based E Source.

The full power of the New Economy has yet to be felt. Customers still demand superior services at better prices and utilities must anticipate those needs. As the Internet expands its prominence, more and more services will be tied to that medium. Not only will customers pay bills online but an increasing number of energy services and sales will be conducted that way as well. Progressive utilities will acclimate.

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