International Standard Helps Utilities Fight Climate Change

Many consumers want their utilities to be leaders in the global effort to reduce climate pollution, especially since such leadership results in lower bills.

Many consumers want their utilities to be leaders in the global effort to reduce climate pollution, especially since such leadership results in lower bills. In North America, and to a lesser extent, in other regions, many utilities are fulfilling that demand by offering customers incentives and education on how to improve their energy efficiency, encouraging them to use solar energy, and contracting more with clean, renewable sources. Some utilities are also leaders in the effort to improve appliance energy efficiency standards and building energy codes, and to enact emissions caps on the carbon pollution driving climate change.

However, this is not the global norm—in most countries, utilities are not a significant part of the climate solution. We now have a new tool to change this: an International Standard on consumer satisfaction with energy service providers, ISO 50007, published July 2017. This standard offers advice to utilities and their regulators on how to improve consumer satisfaction, and includes strong recommendations on energy efficiency and clean renewable energy.

This standard was issued following the consensus procedures of the International Organization for Standardization (ISO), a global nonprofit whose members are either government standard-setting organizations or, in the case of the United States, a business-oriented nonprofit—the American National Standards Institute (ANSI).

ISO 50007 is designed to help utilities establish and then improve customer satisfaction ratings. It provides criteria on what actions utilities should take, in coordination with their regulators, to better meet public service obligations. Protecting the environment by reducing a utility customer’s energy footprint (and thus reducing both its carbon footprint and also reducing its costs) is clearly a major component of consumer satisfaction, and thus it is addressed in the standard through a number of important criteria.

The genesis of the standard

ISO 50007 is modeled on the ISO standard for consumer satisfaction for water service providers (ISO 24510). ISO 24510 established criteria for fair and transparent pricing policy, convenient methods for bill payment, a process for resolving disputes, and for providing access to water and sanitation services to diverse populations including those not yet connected to fixed networks. These criteria are especially important for customers in rural areas and developing countries where these criteria often are not met.

ISO 50007 goes further, however, in that it envisages utilities not simply as energy vendors, but as energy service providers: that is, as providers of advice on energy efficiency as well as sales of energy.  It also recognizes the existence and immense growth potential of new energy service providers that do not look much like traditional utilities, but focus more on services such as battery charging (in remote villages) or integrating high efficiency with clean and resilient renewable energy sources and energy storage options (where storage compensates for the variability of the renewable power) including those serving regions not currently served by electricity providers.

The development of ISO 24510 was promoted by Consumers International, a worldwide federation of consumer protection organizations, with the support of the ISO Consumer Policy Committee (COPOLCO). Consumers International led the effort to get ISO to write a parallel standard for energy service providers, and ISO accepted the charge. ISO 50007’s developers, however, realized that a crucial element of energy services is environmental responsibility. Determining the energy services threshold needed to satisfy basic customer demands, such as adequate thermal comfort, is another important element of consumer satisfaction with energy services, especially important among poorer customers.

ISO 50007 should be equally meaningful for utilities in both high-income and developing countries. That is why the United States, Canada, Japan, Korea, China, Mexico and Chile took a lead role, along with Consumers International and NRDC (through our membership with the ANSI team), in writing the standard.

The standard also provides advice to new entities that are expected to arise in poorer regions throughout the world that provide off-network energy services based on local supplies of wind and solar, even where the customers cannot afford 24-hour energy supply.

As I noted previously, South Korea, which led the 50007 work, found that even the preliminary draft was very useful in generating consensus on this new business model for utilities. In the new model, utilities both sell energy to, and buy from, customers on the grid through internet-based controls or energy pricing methods. They help their customers to cut costs and emissions through energy efficiency as well as renewable energy.

The new utility balances intermittent resources such as wind and solar by demand response, by which customers or utilities can control energy use to defer consumption from periods of excess demand and make it up with greater energy consumption in times of excess supply. Demand response works best in conjunction with advanced energy efficiency technologies.

The new ISO Standard 50007 can serve as a cornerstone of a coordinated effort among government, utilities, academia, or any provider or organization empowered to reduce greenhouse gas emissions, as well as providing consumer-friendly clean, renewable, and energy efficiency services.