Alex Laskey, president and founder of Opower, which helps people use energy more efficiently with the aim of saving money on their energy bill, in their offices in Arlington. (Jeffrey MacMillan/The Washington Post)

The home energy business has been undergoing a transformation in the five years since co-founders Alex Laskey and Dan Yates started Opower. Back then, the duo used monthly utility meter readings to tell people how to reduce their energy usage.

Today, the Arlington company uses the data generated by smart meters to track energy consumption in real time. The 250-person firm then sends reports to 14 million households that compare their usage to neighbors and offer tips on reducing their energy footprint.

The reports are part of an ambitious strategy to turn utilities into a consumer-centric industry that provides people with services, not merely a monthly bill. With that objective in mind, Opower has teamed with Facebook on a social media app and Honeywell on a thermostat. Locally, Baltimore Gas and Electric is deploying Opower’s software to 1.3 million customers and Pepco just signed on as a client.

But Opower’s goal is not without challenges. Utilities are wont for the status quo because they often don’t face competition and tend to be cautious, trading reliability for risk taking when failure can mean millions of customers without electricity. As long as the lights turn on and the bill isn’t too high, energy is rarely front of mind for many homeowners.

Capital Business sat down with Laskey to discuss the company’s growth trajectory and vision for the future of home energy.

Why do utilities need to change ?

“Today, if you’re Pepco, your customers are not comparing you to Baltimore Gas and Electric. They’re not comparing you to Dominion. They are comparing you to their other service providers. They are comparing you to Verizon and Comcast and Bank of America and American Express. All of those service providers have revolutionized the way they engage customers.

“It’s not enough just to keep the lights on. You have to provide a better level of service to your customers because they’ve come to expect it in other aspects of their life.”

And that’s why they use Opower?

“Nearly any one of them would look at the stuff we’re doing and say in five or 10 years everybody is going to be providing these services to customers. Could you imagine a bank today that didn’t have a Web site and allow you to check your balance online? It’s impossible that a bank would exist that way. The utilities that fail to do this, just like the banks that failed to put up Web sites, are not going to be around.”

Some people prefer not to tend to their health or personal finances. How do you get them to care about energy?

“People don’t want to be wasteful, so people’s interests are aligned [with the company]. But it is boring and for most people it’s not that expensive, so it’s not financially compelling.

“We use behavioral science, we use analytics, we use really phenomenal design ... and all of those things in combination can make a difference. The challenge is finding the handful of things every month or every year that do work.”

Have you thought about an exit?

“There is clearly a space for a big consumer energy company that makes sense of this complex thing called electricity. There is a stand-alone, huge, multibillion dollar company that does this and that’s going to be us. Now does that mean we couldn’t be acquired at some point? Of course that could happen, but it’s not the focus of our attention.”

Did you always think in those terms, to get big?

“We didn’t realize how big of an opportunity that would become, but we knew there was power in that. Building a business was not the objective [when we started]. Having an impact on the environment and changing the way people thought about and used energy, that was the purpose. I feel very proud of what we accomplished, but I feel very hungry to accomplish a lot more.”