The utility’s role is changing, and regulation must change along with it – to spur innovation and respond to evolving customer needs. Modernizing the industry will require a dynamic approach.
Customer Service: 2020
Grid upgrades spark an interactivity revolution.
will be an emissions market overlay on top of all of this. Consumers can participate in that market, perhaps with a community-based model. But certainly in the next 10 years we’ll be trying to change the business model to support distributed generation within communities, and hopefully we’ll be able to do that without doing too much damage to utilities. Utilities can’t change their business model overnight. It’s a work in progress that always takes five years after new regulations come out. It might require additional infrastructure changes that will cost money, and it wouldn’t be right to ask ratepayers to pay for all of that at once.
The short answer is there will be some changes and utilities will be hard pressed to react to them. Some companies are being proactive and trying to anticipate the changes, but by and large they are waiting to find out what the impacts will be.
Waters, Oracle: Changes in the regulatory model are difficult to predict. The biggest question is whether regulators will level the playing field between fossil generation and renewables and nuclear generation by putting a price on carbon emissions.
Another big question is whether we’ll get retail choice back in the utility industry, driven by some of these factors happening around price and the idea of the prosumer—the consumer who is also a producer. Will that drive the retail model in the United States as happened in Europe and Australia and New Zealand where they have thriving retail markets?
I think there’s no doubt that as prices continue to escalate, North America will revisit retail competition, and it will be driven by regulators.
Jimenez, HP: A lot of utilities are trying to figure out how they’re going to take care of customers now that they have smart meters and information about consumption. What will they tell customers about the way their behavior affects consumption and bills? Many utilities are struggling with this. I see executives coming into utilities from telecommunications companies because they’ve faced these issues about how to capture and retain clients. In the future that will become one of the more important things that makes a utility successful.
It’s not just about deregulation. There’s enough evidence from other countries about what does and doesn’t work, so it’s not about which model we’re going to adopt. I’m pretty sure it will be a combination of everything. But the challenge will be how quickly and effectively utility companies will be able to act on new opportunities, provide new services to existing customers and capture new customers.
We can’t expect utility companies to do everything by themselves. They will line up with partners who provide the infrastructure for an advanced customer experience. Partners will allow them to provide additional services to end users, whether it’s security or appliance services or even entertainment. We haven’t even touched on what happens with customers who invest in solar panels or microgeneration facilities on the premise. It opens another set of issues for utilities. Utilities will be forced to create systems they can leverage to improve the