Smart or necessary? HP suggests service-savvy utilities will need the smart grid to survive

We've heard an awful lot in recent months about how great the smart grid could be for consumers. Well, there's one really big reason that utility companies apparently are scrambling to develop their own strategy: discouraging customer churn.

At least that's one of the ways in which Hewlett-Packard's smart grid infrastructure team is viewing the problem.

Tony Erickson, global utilities industry for HP Enterprise Services (formerly EDS), says that smart grid functionality will fundamentally change the business model for utilities of all types (electric, water, you name it). The business intelligence provided by HP's Neoview platform and enabled by smart metering technology will allow utilities to adjust pricing on the fly, cross-sell or up-sell services, encourage renewable energy usage, tailor promotion offers and so on, Erickson says.

This technology won't be a "nice to have" option, he suggests. In Europe, which is ahead of the United States in terms of deregulation, utility companies are looking at smart grid applications as a way to slow down customer churn rates. Meanwhile, Erickson suggest that utilities will increasingly face mandated state efficiency targets that will be difficult to meet with smart grid technology in place.

Want to hear about an actual real-life example? This case study about the Detroit Water and Sewage Department (the third-largest water and sewer utility in the United States) provides some more ideas.