electric utility industry is starting to change how it operates, according to
Black & Veatch’s sixth annual Strategic Directions in the U.S. Electric
Utility Industry report. Factors ranging from electric vehicles and renewable
energy growth, to water supply issues and efforts to improve customer access to
information, are driving this shift, the report says.
are evolving in a manner that will redefine core functions such as power
production, distribution and customer service," John Chevrette, President
of Black & Veatch''s management consulting division, says. "Driven by
new technology and regulatory shifts, we are seeing the impact across all
aspects of the electric industry."
findings from this year''s report indicate:
(economic and environmental) will remain the primary motivator for utility
leaders concerning investment decisions. Additionally, electric customers will
be the ones who pay for changes through increased rates. More than 65 percent
of utility leaders stated that customer rates had risen in the past year. More
than half believe that rates will rise "significantly" because of
environmental compliance programs.
potential benefits of smart grid programs include better power quality and
reliability, improved customer service and opportunities to reduce power
consumption. However, regulator and customer understanding of this potential
lags behind the pace at which the new technology is being deployed. Currently,
"customers'' lack of interest and knowledge" is ranked as the top
impediment for smart grid investment.
nexus of water and energy continues to be a major issue for the industry.
Nationally, water supply is second only to carbon emissions legislation as the
industry''s top environmental concern. In drought-stricken Texas, it is the top
leaders are starting to "see gold" in green programs. The industry''s
view on renewable energy is shifting from one of doubt to one of opportunity.
More than two-thirds of respondents stated that renewables could provide
benefits in the form of customer and regulatory relations, investment
incentives and future revenue generation. More than 40 percent have begun the
process to modify their service models to account for distributed generation
resources, such as rooftop solar.
leaders, on average, estimate that electric vehicles will account for 7 percent
of overall electric load by 2025. The 7 percent projection, however, requires
exponential growth in electric vehicle sales.
Solar is the top-ranked traditional renewable
technology for the second year in a row. Most notably, it was the top-ranked
renewable technology in all geographic regions of the country.
industry''s view on coal is rapidly changing. Last year, 81.5 percent stated
that they believe there is a future for coal in the United States "when
fiscal realities are fully considered." This year, less than 60 percent
believe this statement.
combination of a persistently sluggish economy, growing environmental concerns
and uncertain regulatory outcomes, is creating the greatest earnings pressures
in recent memory," Chevrette says. "Moving forward, utility leaders
must balance the competing needs of sound financial performance and increased
regulatory requirements while striving to exceed customer expectations."
Black & Veatch Electric Utility report is based on an industry survey and
expert analysis. Survey data was gathered from qualified electric utility
industry participants from 22 February through 23 March 2012. Statistical
significance testing was conducted and represented results have a 95 percent