Wednesday, September 18, 2013

"Nothing is too big to fail." -- The Internet

"Yes, YES! The Bentley, too.
Just get me outta here!!"
We’ve had a lot of fun picking at the bones of the 20th century mastodons that stampeded into the tar pits of the Interaction Age, but we haven’t witnessed one of those big boys going under in real time … until today.

Xcel Energy is currently in an existential fight with New Era Colorado—a band of dedicated (if not a little misleading) activists who believe they are “on the verge of setting an important precedent that has national significance and could threaten not just Xcel Energy but the very core of the business model, and the billions of dollars in profit that come with it, of the dirty coal energy industry.”

Considering the reaction to date from Xcel—and the energy utility industry in general—they may be right.

In 2011, the good people of Boulder Colorado voted to wrest control of the power grid from Xcel and make it a locally owned utility. Xcel fought back by getting an initiative on the 2013 ballot that would scuttle the deal if it were to pass, setting up a showdown that will have profound repercussions for the utilities industry if Xcel loses.

(Ever humble, Xcel initially denied having anything to do with the ballot measure. But after it was revealed that “the language of the proposed amendment … is identical to language that was tested by Xcel in an April poll,” Xcel acknowledged its involvement.)

New Era Colorado got the jump on Xcel with a well-produced video that laid out their case for why voters in Boulder Colorado should not overturn the 2011 election results. The highlight of this video is the revelation (at 3:35) that there is a “textbook” published by the Edison Electric Institute that Xcel and other utilities are using to fight the growing movement to localize power supplies. The advice in this “textbook” on how to “nip the movement in the bud” made it quite obvious that this 11-year-old manifesto needs updating.

Among the pearls … “develop fact sheets and other information you can leave behind,” “feature charitable activities in bill inserts,” and establish a website because “increasingly, individuals are turning to the Internet for political information.” (Can it be that it was all so simple then? Or has time rewritten every line?)

But it looks like Xcel is going to need more than a textbook and some yard signs to prevent its business model from unraveling. According to a more recent report commissioned by the Edison Electric Institute (January 2013), the entire industry faces a “cycle of decline [that] has been previously witnessed in technology disrupted sectors (such as telecommunications) and other deregulated industries (airlines).”

In other words, “Like the U.S. Postal Service … utilities will continue to serve the elderly or the less fortunate, but the rest of the population moves on,” at least according to David Crane, CEO of NRG Energy, a wholesale power company based in Princeton, N.J.

As we’ve learned from Kodak, the Yellow Pages, Twinkies, Newsweek—to name just a few—it’s a brave new world out there. If you do not adapt, you will die. And the bigger you are, the faster you will be swallowed up by the tar pit. (The Internet does not subscribe to the “too big to fail” philosophy.)

So learn from the mistakes of the once-masters of our universe. The days of talking to are over. You now have to communicate with your customers partners, honestly and transparently.

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