An Insurance Model
Rep. Tom Sloan was elected to his 12th term in the Kansas House of Representatives. He serves on DOE, FCC, and EPA advisory committees and has hosted FERC Commissioners in Kansas. He focuses on energy, telecommunications, and water policy interactions in Kansas and nationally.
In the May, 2018 issue of Public Utilities Fortnightly, Tom Flaherty correctly stated that "Companies need to recognize that institutional inertia is common to companies, particularly utilities, and it takes anticipation, conviction, and patience to overcome."
The corporate world is replete with examples of companies that could not innovate and thus failed to retain market share and, in many cases, market relevance. When was the last time you saw a Smith-Corona typewriter?
In addition to Flaherty's call for corporate leaders to "position innovation as part of the DNA of the enterprise," electric utilities must recognize that not only are they competing against innovations developed by third parties and new market entrants who seek to direct market to residential and commercial customers these hardware and software innovations. But they also must compete against the inertia of their regulatory framework and customer base.
Regulatory Commissioners, Governors, Legislators, and local officials are generally risk adverse. Most customers ignore the electric system until a rate case is filed or the power goes out. Technologies like the Power Wall and smart telephone apps that allow customers to monitor their homes are direct competitors to the utility. And are not regulated by the Public Utility Commissions.