Strategy & Planning

“We must have liability caps. It may seem unachievable to change state and/or federal laws, but utilities’ exposure to these liabilities must be capped. Customers are being impacted by legal costs associated with wildfires. Unless reasonable limits are placed on wildfire liabilities, access to capital will be hampered.”

Fifteen Guidehouse experts hit their buzzers and answer our questions: Danielle Vitoff, Peter Shaw, Amul Sathe, Ed Batalla, Jenny Hampton, Keshav Sarin, Erik Larson, Derek Jones, Debbie Brannan, Robyn Link, Latisha Younger-Canon, Nathan White, Shaun Fernando, Aditya Ranade, Steve Waller.

“Much infrastructure growth and research and development are going to require continued government intervention, whether in the form of funding for research or loan guarantees. The picture, in my mind, has been getting a little clearer over the last few years, but I still don’t see a clear path to either 2030 or 2040.”

“The distribution system needs communication and management systems to provide a greater understanding of what’s happening on the distribution grid as large and small customers are installing more distributed energy resources. With this, utilities can better manage peak demands and ensure reliability.”

“The most important concern is how we can address present risks, as well as tackle electrification requirements of the future.”

“Pennsylvania passed legislation allowing for alternative ratemaking, which allows utilities the option to utilize time-of-use, incentive, multi-year, decoupled, and other distribution rate designs. We haven’t had significant applications of these designs yet, but the tools are in the toolbox.”

“I think about the potential for increased reserve margins for utilities due to extreme weather, the impact of economic development decisions, as well as potential load growth from electrification of the motor vehicle fleet. With all that demand coming onto the grid in the near and long term, it gives me concerns. The grid is going to be challenged.”

Like the space program, the drive to decarbonize is encountering many unsolved problems. Each has the potential to prevent a smooth landing.

The challenge is to modernize these systems without imposing undue costs on consumers, balancing fiscal responsibility with the imperative for technological advancement.

While these revenue stabilization mechanisms mitigate specific risks, they also require monitoring and calibration – they are not to be set and forgotten.