In our last blog, we introduced the concept of decision-making hygiene—a disciplined approach to making better choices. One of the most critical aspects of this approach is gathering and fully understanding a broader range of facts before making decisions that impact end-users and the economics of energy choices.
Municipal leaders, utility executives, and energy entrepreneurs are faced with a complex reality: energy policies, infrastructure investments, and regulatory changes all have direct and indirect impacts on businesses, homeowners, and entire communities.
Poor fact-gathering can lead to misallocation of resources, higher costs for consumers, and missed opportunities for economic growth.
Fact-Based Decision-Making: A Must for Energy Leaders
A strong and sustainable energy future relies on facts that bring new perspectives to counterbalance assumptions, political pressure, or outdated models.
A sampling of thoughts for expanding decision hygiene:
- Data on Energy Usage and Consumer Needs
- The Reality: Many energy policies are shaped by historical trends rather than real-time insights and overestimated expectations of economics.
- The Risk: Outdated assumptions about demand can lead to overbuilding infrastructure, underinvesting in efficiency, conservation, and innovation [including local generation].
- A Solution: Municipalities and utilities must leverage and share smart grid data, advanced analytics, and direct engagement with customers to understand actual consumption patterns.
- Affordability and Economic Impact on End-Users
- The Reality: Energy is a technical and economical community issue, influenced by environmental decisions.
- The Risk: Decisions that ignore energy affordability can drive up rates and polarize community stakeholders, making life harder for residents and business.
- A Solution: Leaders must understand the full range of stakeholder considerations before establishing policies and approving new projects.
- Cost vs. Benefit Analysis of New Technologies
- The Reality: New energy technologies—like battery storage, electrification, and microgrids are topical/exciting but require careful near-term and life-cycle evaluation.
- The Risk: Jumping on trends without a full cost-benefit analysis can lead to underutilized infrastructure or stranded assets.
- A Solution: Decision-makers should evaluate ROI, lifespan, operational risks, and policy implications before adopting new technologies.
- Regulatory and Policy Considerations
- The Reality: Government policies and energy regulations are complex, ever-evolving, and highly influential on business models.
- The Risk: Misinterpreting or overlooking policy and regulatory requirements/realities can lead to non-compliance, project delays, and inability to adapt/pivot when changes occur.
- A Solution: Energy businesses and municipalities should actively monitor regulatory changes, engage with policymakers, and share information so their strategies accommodate evolving frameworks.
- Consumer Behaviour and Market Trends
- The Reality: Many energy consumers, the full spectrum from residential to large industrial, are changing how they use and think about energy.
- The Risk: Ignoring shifts in demand can lead to investments that don’t match actual user needs. [Another set of risks must be considered for supplier organizations that serve energy consumers.]
- A Solution: Fact-based decision-making means continuously gathering insights from surveys, market research, and stakeholder engagement programs.
The Economic Consequences of Poor Fact-Gathering
When decisions are made without fully understanding the facts, the economic consequences can be severe. Some examples include:
- Overbuilding infrastructure that ratepayers must fund… distribution, transmission and generation.
- Delaying investments in modern solutions(e.g., ignoring efficiency measures that could reduce demand and lower costs).
- Creating affordability crises for residents and businesses (e.g., approving policies that disproportionately increase energy costs for vulnerable customers).
By contrast, decision-making hygiene leads to:
- More resilient energy systems that align with real-world needs.
- Stronger economic outcomes that balance affordability and investment.
- Greater trust from end-users who see decisions that benefit them, not just large utilities or governments.
A Call to Action: Elevating Energy Decision-Making in Ontario
Ontario’s energy leaders have an opportunity to improve how they gather and use facts to shape decisions.
This means:
- Using real-time energy data rather than outdated projections.
- Conducting comprehensive economic analyses before approving new projects.
- Engaging directly with all stakeholder sectors to understand their needs.
- Aligning policy decisions with affordability and competitiveness goals.
Fact-based decision-making hygiene will create achievement of balanced energy and environment goals and sustainability.
