In 2020, an unforeseen crisis emerged that has fully consumed the energy industry. It wasn’t climate change that led to a natural disaster, no one has poisoned the water supply, and as far as we know, hackers haven’t taken over the grid. Instead, the crisis was that everyone went home in mid-March and then just didn’t go back to work.

Covid-19 has obviously had a huge effect on usage patterns and anticipated revenues for utility budgets. Instead of all that wonderful Commercial and Industrial usage, utilities had to settle for the much less lucrative Residential rates. Then, utilities decided to put a hold on late fees and disconnections. Some of this was mandated by local governments and some of it was just utilities making a humane decision. Either way, it was the right thing to do, as people don’t need to be concerned about their water, heat, and power during a global pandemic. But for many utilities, this is going to hurt.

As many as 60% of water utilities admitted in the AWWA State of the Water Industry report from 2019 that they were only moderately, at best, able to meet their costs to serve their customers based on current revenues. A number of small utilities, it’s sad to admit, depend on late fees and disconnection charges to close budget gaps simply to afford the minimum offering of their core commodity. Forget upgrading infrastructure or getting modern software, these utilities need late fees just to keep the pumps on. For utilities that are essentially living paycheck to paycheck, going three months without collecting late fees is going to be financially catastrophic.

Worse than all of this, it became very apparent that the technology utilities had in place to deal with a crisis like this was woefully lacking. Digital Transformation has been a great buzz word for the last couple of years, but the reality of it reared its ugly head in March 2020. When everyone decided to go home from work and do their jobs virtually, utilities were in that group too. How do you run a utility when your legacy systems were developed before the internet was even a thing?

You’ve heard that saying about planting a tree? The best time to plant a tree was 20 years ago. The second best time is now. The same can be said about the digital transformation of the utility industry.

Take a look at the other industries and major companies in the world and notice which ones have been able to work through the storm of this pandemic. Salesforce, Oracle, Google, Apple, and Amazon went remote. So did Dell, Microsoft, Facebook, HP, Intel and Twitter. It’s not just technology companies either. By early April 2020, Flexjobs reported that as much as 50% of the workforce in America had gone remote.

For many companies, they were already operating on cloud technology and had digitized most of their processes. Moving workers to be “at home” for these companies was as difficult as taking your laptop from your office desk and remembering to throw away the snacks in your bottom drawer before walking out the door.

Most utilities, on the other hand, have had to stagger workers in the office because they simply didn’t have the technology or processes in place to work remotely. For other utilities, IT staff have had to quickly put together VPN networking solutions so that staff could have access to critical ERP systems. When you rush technical decisions and implementations, failures are bound to happen. There is now a higher cybersecurity risk as a result of so many people working from home that haven’t ever done so. Are they bringing their own devices? Are they using unsecured WiFi? What if they are accessing sensitive data while their teenager streams to TikTok behind them??

What’s clearer now than ever is that digital transformation is a necessity in the world that we live in. We can’t operate vital industries like utilities with outdated systems and processes that rely on paper, spreadsheets, and manual intervention. What’s also clear is that the work that is needed to make the shift is now going to be harder than ever to afford – both with money and time.

Utilities have been forced to lay some workers off, furlough others, and halt projects that are considered non-essential. Revenues are falling and the smallest utilities may find themselves bankrupt and being absorbed by their neighbors or private utilities. As people struggle to pay their bills, water and power will fall to the bottom of the list as long as they aren’t getting late fees or disconnected. There’s no incentive for people in crisis to pay those bills, nor should there be when people are more worried about food and shelter. It’s possible that we might see a utility industry bailout.

We don’t know when the industry will recover, but it will never go back to “normal.” As soon as utilities have the ability, they will change their operations and procedures to utilize digital solutions that can be managed from anywhere in the world. Never again will utilities find themselves unable to work remotely. Customer service, operations, and management will go to the cloud, take advantage of AI and machine learning, and customer self-service will be the norm in the future. These projects will take money and time but have never been more important.