Utilities 2.0: Analyzing Customer Lifetime Value and Customer Transfer for a Novel Electrification Partnership

Abstract

About ten percent of today’s global population lacks access to electricity. Distributed energy resources (DERs), however, have the potential to deliver the benefits of energy access, which include increased productivity and improved education, to energy impoverished communities located outside of centralized electric grids. Power for All, an international non-profit organization, is developing a novel business partnership model, called Utilities 2.0 (U.2.0), to harness the comparative advantages of both centralized electric utilities and DER developers to identify the least cost, quickest path to universal electrification. This study supports the U.2.0 pilot program launching in Uganda. We analyze the policy and regulatory landscape to identify gaps and drivers in facilitating the transfer of customers from DER developers to the country’s utility, Umeme. We also developed a Customer Lifetime Value (CLV) model for the U.2.0 business model to measure the value add of the U.2.0 program compared to a typical grid expansion scenario. Our study identifies current policies and makes recommendations to improve customer transfer between U.2.0 partners and finds that the U.2.0 model can increase CLV at Power for All’s pilot site in Uganda.