Utilities of Future

I read this article in HBR sometime back. A very intriguing read, especially when their is renewed awareness and acceptance of the fact that for our own species' benefit we need to judiciously use what the nature provides

There is a something wrong with the way utilities business model is structured today. In the current model, the utilities are supposed to encourage people to consume less of what the utilities produce!! How do we expect utilities to innovate such that consumers consume less of their products when it directly impacts the utilities revenue? You understand the dilemma?

The solution may lie in changing the utilities revenue model from charging for service rather than charging for output. e.g. the power company would charge for lumen of light generated vs. watt of power consumed.

In the telecome industry this is already in practice: The service provider charges you for minutes, text messages and video downloads rather than for bits per second, which is the underlyinfg commodity.

In the new model, the utilities would charge you for amount of light, heating, cooling etc. This model brings the utilities revenue model in line with conservation of basic energy while still getting ever increasing revenue from ever increasing need for lighting, heating and cooling etc.

That way, it would be in the interest of the utilities to devise means to deliver these services as efficiently as possible. Consumers on the other hand will also understand how they use these services and be better able to lower their cost.