Source: Daniel Schwen, Wikimedia Commons
Acquire more customers, sell more electricity. This primary formula has fueled the runaway success of utility companies in America, as well as the rest of the world, for well over a hundred years.
But today, in an era when customers are technologically savvy, price conscious, and environmentally aware, more families are pursuing opportunities that will cut electricity bills and carbon emissions. Options once considered fringe, like installing rooftop solar panels and driving electric cars, are now becoming so mainstream that utilities everywhere are seeing their bottom lines crunched and even fear for their survival. The electricity sector needs a new formula that can account for these changes, while still providing reliable, safe, and affordable electricity for all.
As a result of increased energy efficiency and heavier reliance on local, distributed energy resources, it’s clear our country is moving toward a reality in which less electricity will come from centralized, fossil fuel power plants. At the same time, customers want utilities to continue providing basic electricity services while allowing them to benefit from new energy-efficient solutions and clean technologies in order to waste less electricity and generate our own power.
How will this be possible? A key first step is moving away from the existing regulatory paradigm, which rewards utilities for investing in more power stations and equipment, to a model that rewards utilities for the performance we seek today. Read More