Public Utilities Reports

PUR Guide 2012 Fully Updated Version

Available NOW!
PUR Guide

This comprehensive self-study certification course is designed to teach the novice or pro everything they need to understand and succeed in every phase of the public utilities business.

Order Now

CEO Forum: Facing the Future

Three CEOs, three business models, one shared outlook.

Fortnightly - June 2012

At that time you’ll be able to put solar on your roof and generate for 6 to 7 cents/kWh. When that happens, a significant percentage of homes will convert to solar roofs, and that will have a dramatic impact on the way electricity is delivered.

Fortnightly: NRG’s eVgo subsidiary just reached an agreement to invest $100 million in EV charging infrastructure in California. How important is the EV business as part of NRG’s strategy?

Crane: I’m a huge fan of EVs and I believe they’ll be a big part of the future—and they should be. There’s a lot of room for development in that business. We’re just scratching the surface of what EVs can be in terms of a dual-use consumer product, acting as a distributed storage mechanism for the grid in its spare time, during the 22 hours a day when the average car isn’t being used.

We started the eVgo model in Texas a year ago, mainly to prove to ourselves that Americans would be willing to pay for their transportation fuel in a completely different way, compared to what they do now. It’s a subscription model, with one flat fee per month, as part of your home electric bill. We found it very reassuring in Texas that 90 percent of Nissan LEAF owners bought our subscription model. But the bad news is that very few customers have the product. It’s nice to have 90 percent of the market, but there are only about 100 cars in Houston and Dallas.

In California, on the other hand, there are already thousands of EVs on the streets. We saw an opportunity to settle a longstanding dispute with the state, that came out of Dynegy’s actions. We proposed to build and own this infrastructure, but unlike in Texas where it’s a private subscription model, we’ll provide public access for a certain number of years. We have $100 million committed to putting a charging network in three major cities plus the San Joaquin valley, plus wiring 10,000 more chargers across the state. We’re excited. It’s an example of far-sighted, public-private cooperation.

Fortnightly: What do you see as the outlook for EVs to grow into a major business?

Crane: Today, EVs and their support infrastructure are about where the cell phone industry was with towers around 1985. The good news is that the main workhorse for EV charging in the future will be the home electric system. And it doesn’t cost that much to put in urban chargers, to turn range anxiety into confidence.

History has shown that when you’re creating any sort of infrastructure, you create the most value by being the first mover. We aren’t the largest company in the market, but we moved early to get that advantage and set up a network. It’s no secret we also want to start doing this on the East Coast. So it’s a source of significant potential value—but everything is derivative. If the American public doesn’t embrace EVs, then it probably won’t have as much value.

The good thing is the sheer size of the

Pages