Lightning Round on Power's Future

Deck: 

Guidehouse

Fortnightly Magazine - June 2 2025

Guidehouse experts hit their buzzers and answer our questions. With Guidehouse’s Michelle Fay, Chris Smith, Santos Garza Romero, Nathan White, Danielle Vitoff, Debbie Brannan, Nicole Fry, Keshav Sarin, Robyn Link, Meredith Bodkin, Aditya Ranade, and Peter Shaw.

  • Michelle Fay: What are the most pressing strategic challenges utilities face today, and how should leadership teams prioritize their response?
  • Chris Smith: What near-term actions should utilities take to address the prospect of exploding load growth and what should they be doing to deliver necessary capacity and optimized outcomes for all stakeholders?
  • Santos Garza Romero: Given the all-of-the-above generation buildout strategy that many utilities are embracing, how should they streamline their transmission planning and interconnection approaches?
  • Nathan White: How should utilities collaborate with states and local communities to meet future load growth and resiliency needs?
  • Nicole Fry: What are some no-regrets AI use cases that utilities should consider, and which can have a sustained long-term impact?
  • Keshav Sarin: Where are utilities currently lagging best practices for managing risks to critical infrastructure? What immediate actions can they take today to mitigate those risks?
  • Danielle Vitoff: What are the most important actions that utilities can take today to prepare for an America First energy policy agenda from the Trump Administration? How can utilities enhance energy security goals and what role will decarbonization and clean energy play going forward?
  • Robyn Link: How do you see the utility’s role in energy efficiency and electrification evolving amid significant load growth accelerated by data center buildouts?
  • Debbie Brannan: Where do you see AI and new technologies having an immediate impact on utility operations today? What can utilities do to position themselves as fast followers?
  • Meredith Bodkin: How should utilities transform their organizations and workforce to be competitive in today’s rapidly evolving landscape?
  • Aditya Ranade: How are leading utilities advancing resiliency programs today in anticipation of increased threats to their customers and infrastructure from climate change, storms, and wildfires?
  • Peter Shaw: What innovations in regulatory mechanisms do you see utilities considering to meet future customer needs while maintaining affordability for all customers?

 

What are the most pressing strategic challenges utilities face today, and how should leadership teams prioritize their response?

Michelle Fay: Utilities today face several pressing strategic challenges that require careful prioritization by leadership teams to ensure reliable and affordable service.

Increased Demand from Data Centers and Electrification – The growth driven by data centers powering AI and the electrification of buildings and transportation is unprecedented since the 1980s. Utilities must adapt to this surge by enhancing their infrastructure and planning capabilities. This involves identifying planning needs and least-cost solution alternatives to efficiently manage the increased demand.

Supply Chain Disruptions – Infrastructure development necessitates the timely acquisition and deployment of equipment. Utilities must navigate supply chain disruptions that can impact the availability and cost of essential materials and equipment. To address this, utilities should change the way they plan for and acquire equipment, as well as diversify their vendor community to ensure a stable supply chain.

Michelle Fay: When prioritizing, utilities must consider the value each investment will bring in the short and long term, risk appetite of the organization, and ability to support the investment within the context of their specific organization.

Resiliency Due to Extreme Weather Events – Utilities need to evaluate how susceptible their assets are to extreme weather conditions. This involves developing correlations between historical weather data and their systems, such as inspections and outage databases, to predict future asset vulnerabilities to climate-driven natural hazards like storms, floods, and wildfires.

Protecting significant investments in load growth from extreme events is crucial. Leadership should establish a framework for identifying and realizing business benefits from investments, allowing utilities to measure interim progress, adapt as needed, and ensure investments yield expected benefits.

Digital Transformation – Embracing flexible, modern workforce models, including digital workers, is necessary to generate the capabilities and capacity needed to innovate and mature at the pace of today’s market demands. Establishing strong data governance and creating centers of excellence to drive innovation are crucial steps. Leadership should adopt innovative technologies like AI and automation to standardize and tech-enable methods and processes to improve accuracy and efficiency.

All of this must be done while continuing to meet and exceed increasing customer expectations and responding to increased cost pressures. Utilities must embrace innovative technologies that can support improved accuracy and efficiency. They must develop investment strategies for a sustainable energy system while managing the long-term risk of changing policy objectives. Identifying and advocating for needed policies and regulations is essential to manage these cost pressures.

Chris Smith: Today’s electric system planning, construction, and regulatory processes are designed to manage moderate levels of growth, but lack the flexibility, scaling, and pace needed to manage sustained surges in new customer connections and large load additions.

When prioritizing, utilities must consider the value each investment will bring in the short and long term, the risk appetite of the organization, and the ability to support the investment within the context of their specific organization.

By combining these elements into an integrated strategy, utilities can optimize outcomes for their customers and reduce operational and financial risk. Leadership can direct resources where they are needed most, positioning the utility as an enabler of continued growth.

 

What near-term actions should utilities take to address the prospect of exploding load growth and what should they be doing to deliver necessary capacity and optimized outcomes for all stakeholders?

Chris Smith: Arguably no issue has received more industry attention over the past year than rising electricity demand. The confluence of data centers to power AI, onshoring manufacturing, and longer-term electrification of buildings, transportation, and industries indicates an extended growth period not witnessed since the 1980s.

Santos Garza Romero: At least in the early phases of a study, utilities must develop automated tools for qualifying and quantifying the upgrade requirements for interconnecting the cluster, though generation projects increasingly require specialized studies, such as electromagnetic transients.

A recent Grid Strategies report, “Strategic Industries Surging: Driving US Power Demand,” that analyzed public filings, determined that U.S. electricity demand could rise one hundred twenty-eight gigawatts over the next five years – a seventeen percent increase. This growth will likely be concentrated in certain regions, so it could significantly strain aging electric systems absent substantial new capital investment on an accelerated timeframe.

Meeting this challenge requires focused attention if utilities are to maintain reliable and affordable service. Today’s electric system planning, construction, and regulatory processes are designed to manage moderate levels of growth, but lack the flexibility, scaling, and pace needed to manage sustained surges in new customer connections and large load additions. Further, building new infrastructure to connect large customers introduces financial risk if loads do not manifest at the anticipated size.

A multi-faceted, integrated approach using a centralized capital programs office could accelerate the new ways of operating and planning systems. Key elements include:

Planning – Identifying planning needs and least-cost solution alternatives;

Nathan White: Ultimately, collaboration between energy providers and state and local stakeholders is essential for dismantling historical silos, aligning incentives, and accelerating data center deployment.

People – Scaling and capability building to manage an increased capital portfolio;

Process – Standardizing project management practices to scale and gain process efficiency improvements;

Technology – Enabling advanced analytical capabilities through AI and automation;

Policy and regulatory – Identifying and advocating for needed policies and regulations; and

Nicole Fry: By prioritizing no-regrets AI applications to support enhanced customer service, employee operations, and regulatory activities, utilities can be better prepared to navigate the complexities of the evolving industry and drive a reliable, affordable, and resilient energy future.

Value realization – Establishing a framework for identifying and realizing business benefits.

By combining these elements into an integrated strategy, a utility can optimize outcomes for its customers, reduce operational and financial risk, and strengthen its reputation. With improved line of sight, leadership can direct resources where they are needed most so that the utility is ultimately viewed as an enabler, rather than a barrier, to continued growth.

 

Given the all-of-the-above generation buildout strategy that many utilities are embracing, how should they streamline their transmission planning and interconnection approaches?

Santos Garza Romero: Before FERC Order 2023, utilities and balancing authorities reviewed interconnection applications in series, looking at generation and load projects individually in their respective interconnection queues.

Keshav Sarin: To mitigate these risks, utilities must identify, prioritize, and protect key systems and networks by upgrading legacy infrastructure and segmenting networks to reduce the spread of cyber threats.

As the number, size, and type of projects began growing and changing, this approach became unsustainable. According to the Lawerence Berkeley National Laboratory, new generating capacity entering the queues grew from one hundred twenty-seven gigawatts in 2010 to nine hundred eight gigawatts in 2023.

Looking for a new approach, utilities must first limit the size of each queue. At the same time, they must train and develop a workforce and implement software tools to analyze and manage the queue process, and capable hardware to handle the increased computational demands – as MISO has done by adopting Pearl Street’s SUGAR tool.

At least in the early phases of a study, utilities must develop automated tools for qualifying and quantifying the upgrade requirements for interconnecting the cluster, though generation projects increasingly require specialized studies, such as electromagnetic transients. All of these tests should occur before they are mandated by requirements such as the high penetration of inverters.

Depending on the number of clusters analyzed each year, a utility could transfer the results into its annual transmission planning process, combining to capture benefits from new load, generation, and transmission all in one model. The transmission plan will capture necessary grid upgrades along with the CAPEX needed to implement them.

Danielle Vitoff: Under an energy scarcity regime, such as the U.S. is entering due to projected load growth, energy efficiency and load shifting must be reconsidered as critical energy resources.

Producing a transmission plan is an arduous process that can vary annually because of changes in regulatory frameworks, load growth, or power consumption profiles, so utilities must design and implement tools and processes that constantly revise key assumptions and automate their modeling.

 

How should utilities collaborate with states and local communities to meet future load growth and resiliency needs?

Nathan White: With the grid’s role evolving, utilities have an opportunity to work with state and local communities to drive economic growth from data center and manufacturing development. A resilient grid must be able to manage extreme events, with every dollar in grid hardening estimated to save four to six in restoration and economic impact – ensuring downtimes are shorter and commerce can resume quickly.

Thus, as Guidehouse outlined in its article about creating a successful decarb hub, state and local communities can be force multipliers for addressing some of the utility industry’s biggest challenges through both one-time and ongoing capital incentives. Stakeholders must be engaged early and often.

Robyn Link: Utilities should develop incentive programs encouraging data centers to adopt energy- efficient cooling technologies like liquid cooling and direct-to-chip cooling.

Public and private entities must align on proactive measures to enable a collaborative framework that cuts through red tape and bureaucracy and establishes clear lines of communication for accelerating growth and deployment. Ultimately, collaboration between energy providers and state and local stakeholders is essential for dismantling historical silos, aligning incentives, and accelerating data center deployment.

Steps must be taken to protect significant investments in load growth from extreme events. In 2024, there were twenty-seven disasters costing billions of dollars, which resulted in 182.7 billion dollars in damages, with Hurricanes Helene and Milton costing 78.7 billion dollars and 34.3 billion dollars respectively. The direct damage was significant, and the indirect economic impact, along with rapidly increasing insurance costs, underscores the critical importance of resilience measures.

The challenges ahead can be daunting, but by collaborating with state and local partners and engaging stakeholders transparently, utilities can transform the grid into a platform for economic vitality.

 

What are some no-regrets AI use cases that utilities should consider, and which can have a sustained long-term impact?

Debbie Brannan: If utilities are to become fast followers in AI adoption, they should build a robust ecosystem that strategically integrates AI and other new technologies into their operations and across their networks.

Nicole Fry: The energy industry is at a pivotal moment, with utilities increasingly turning to AI to address pressing challenges and seize new opportunities. Among the myriad AI applications, several stand out as no-regrets use cases that utilities should consider for immediate benefits as well as long-term impact.

Customer Service – Enhanced customer service improvements offer clear value but can be challenging because existing systems are both embedded and heavily customized. To overcome these challenges, utilities should start by exploring solutions that enhance customer service capabilities without fully replacing their core systems. These solutions can streamline processes, improve information access, and enable smarter, faster searches, delivering immediate value to customers and employees alike.

Employee Operations – AI can also significantly improve the efficiency and satisfaction of utility employees by simplifying how they fill out forms, improving access to information, and enabling smarter, faster searches. These enhancements not only boost productivity, but they also contribute to a more engaged and motivated workforce.

Regulatory Activities – Finally, AI offers substantial benefits for regulatory support activities. Utilities can leverage AI to streamline regulatory tasks, such as gathering and analyzing data for benchmarking and supporting compliance filings. By automating these processes, AI reduces the administrative burden, enhances accuracy, and ensures timely compliance with regulatory requirements.

Meredith Bodkin: The race for skilled resources is more competitive than ever as the existing workforce ages and labor markets wane, making enterprise alignment on talent acquisition strategies, career pathways, and succession planning critical.

Looking into the future, more comprehensive strategic use cases like load generation and demand management should be in the pipeline for utilities as well, but these will take longer to develop and will require more advanced data integration. By prioritizing no-regrets AI applications to support enhanced customer service, employee operations, and regulatory activities, utilities can be better prepared to navigate the complexities of the evolving industry and drive a reliable, affordable, and resilient energy future.

 

Where are utilities currently lagging best practices for managing risks to critical infrastructure? What immediate actions can they take today to mitigate those risks?

Keshav Sarin: Despite providing essential services such as electricity, water, and gas, many utilities lag in best practices for managing risks to critical infrastructure. Often, utilities are most comfortable on the lagging side of the technology curve, especially with operational technology, where refresh rates are measured in decades rather than years.

Key issues contributing to risk include outdated systems, a retiring workforce, interconnected networks, lack of automation, insufficient cyber resources, and poor visibility into security controls. If utilities are to address these challenges, they must immediately strengthen their infrastructure’s resilience measures.

Aditya Ranade: Leading utilities’ resiliency programs are also typically ahead in their digital journeys by developing geospatial asset registries, accessible outage management systems, and digitized inspection data.
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Legacy systems are one of the most pressing issues the industry faces. Many utilities make themselves highly vulnerable to cyberattacks by relying on aging infrastructure that lacks modern security features.

As utilities’ staff embrace digital transformation, interconnected networks increase the risk of cyber threats spreading across systems. Interconnectivity benefits efficiency and revenue generation, but it expands the attack surface, particularly when utilities have been slow to adopt automation and advanced cybersecurity technologies that could identify and mitigate threats in real time.

The loss of experienced workers can lead to decreased network reliability, construction project delays, and higher costs. A resulting lack of skilled resources exacerbates the problem, leaving utilities ill-equipped to respond to emerging threats. Lastly, because of poor visibility into operational risk indicators, utilities can have difficulty with security controls and vulnerabilities, detecting adverse conditions, securely responding to incidents, and ensuring compliance with best practices.

To mitigate these risks, utilities must identify, prioritize, and protect key systems and networks by upgrading legacy infrastructure and segmenting networks to reduce the spread of cyber threats. Continuous monitoring and enhanced threat intelligence capabilities should be implemented to detect and mitigate adverse conditions in real time.

Peter Shaw: Regulatory incentives focusing on improving overall system utilization create a net downward pressure on rates, just as prioritizing rate impact benefits over other benefit-cost tests helps lower rates more readily than do traditional avoided capital cost tests.

Recognizing that human error is a major vulnerability, utilities should train all employees on cybersecurity risks and best practices. Leveraging automation in operational and security processes can improve efficiency, reduce human error, and lessen the burden on staff.

Automation, especially AI, can improve visibility into all systems, reduce the total number of resources needed to monitor increased efficiency, and improve the overall risk posture. AI can help utilities design resilient, high-capacity networks that ensure reliable power delivery while minimizing infrastructure costs. One caution is that AI-driven facilities can lead to voltage fluctuations and grid imbalances, which utilities must manage if they are to maintain a consistent power supply.

By taking these actions today, utilities can significantly enhance their resilience and protect critical infrastructure from evolving risks.

 

What are the most important actions that utilities can take today to prepare for an America First energy policy agenda from the Trump Administration? How can utilities enhance energy security goals and what role will decarbonization and clean energy play going forward?

Danielle Vitoff: A driving force behind utility investment today is the generational growth in demand. This trend and the need to replace aging infrastructure drive the majority of project investment decisions.

Utilities fully understand that their asset investment plans will persist beyond any one federal administration or federal policy decision. Given that they must develop investment strategies for an enduring energy system, utilities must take advantage of near-term opportunities, offered through supportive policy, to achieve long-term project development goals, while managing for the long-term risk of changing policy objectives.

The Trump administration’s America First policy creates a supportive environment for an all-of-the-above approach – one that recognizes that both molecules and electrons will have a place in powering the future. This federal policy transition prioritizes commercial competitiveness over specific policy objectives, which will result in a wide range of projects that are fit to purpose for the location where they are to be built. In addition, a fully deployed America First policy would onshore energy technology supply chains, removing an additional hurdle to clean energy development that many utilities encounter in their investment planning.

Under an energy scarcity regime, such as the U.S. is entering due to projected load growth, energy efficiency and load shifting must be reconsidered as critical energy resources. Every molecule and electron that can be saved can be leveraged for additional economic output. In a world of growing demand, capturing efficiency gains should be considered equivalent to developing new energy resources.

The current federal administration’s energy policy objectives may seem to favor traditional energy solutions. However, tailwinds combined with a policy supportive of project development as a whole may provide the avenue for utilities to bolster energy security, while investing in alternative solutions. Beyond the reasons already mentioned, if America is to further establish itself as an energy powerhouse, it must continue developing a varied energy supply and supply chain. m

 

How do you see the utility’s role in energy efficiency and electrification evolving amid significant load growth accelerated by data center buildouts?

Robyn Link: Utilities are at the forefront of addressing the challenges that come with managing high-density data center loads. They must solve issues for both grid and customer needs, while providing reliable and sustainable power. As data center demands surge, their role in energy efficiency and electrification could evolve in several ways.

Enhance Grid Efficiency – Utilities should deploy smart grid technologies. With real-time data, sensors, and automation, they can reduce energy waste and better predict and monitor energy flows, manage grid conditions, and optimize power distribution to accommodate growing data center energy demands.

Advance Energy Efficiency with Liquid Cooling – Utilities should develop incentive programs encouraging data centers to adopt energy-efficient cooling technologies like liquid cooling and direct-to-chip cooling. By improving operational efficiencies and easing grid constraints, these technologies reduce overall energy consumption significantly more than traditional air-cooling methods do.

Target High-Usage Data Centers – Programs should target data centers with the highest potential for energy savings. The average power usage effectiveness (PUE) of U.S. data centers is about 1.5. High-efficiency data centers can currently achieve a PUE close to 1.1, which demonstrates a significant opportunity for improved efficiency.

Support Electrification and Demand Response – Utilities can create win-win situations by offering incentives to data centers to shift power usage during peak periods, which then allows utilities to manage grid capacity more effectively, while potentially reducing the need for costly new infrastructure. Utilities can also provide energy storage options that support grid stability and give data centers more flexibility in managing their operations – in turn avoiding high demand charges.

Combinations of Renewable and Energy Storage – Utilities can help data centers electrify with renewable power and energy storage to build in redundancy and backups. They can offer tailored green energy tariffs or broker power purchase agreements that fuel data centers with solar, wind, or hydropower.

They can also develop offerings for microgrids, storage, and distributed energy resources, ensuring reliable, sustainable energy wherever data centers are.

Utilities are actively shaping energy’s future. They are leading the charge to power the data-driven world of tomorrow while ensuring that energy use remains reliable, smart, clean, and efficient.

 

Where do you see AI and new technologies having an immediate impact on utility operations today? What can utilities do to position themselves as fast followers?

Debbie Brannan: New technologies like AI are having an immediate impact on utility operations today, particularly in corporate services, such as customer service operations, regulatory compliance, and supply chain management.

AI tools automate routine tasks and transform vast amounts of data into actionable insights, leading to better decision making, reduced risk, improved customer service, improved accuracy, and enhanced safety. For example, in customer service, AI offers personalized interactions, cost-effective solutions, faster response times, and data-driven insights that boost customer satisfaction, operational efficiency, and resource allocation.

AI is also driving innovation in process-oriented services, such as field operations and storm recovery. Predictive analytics, real-time damage assessments, and optimized crew deployment enhance these operations. For instance, AI can forecast storm impacts, identify vulnerable infrastructure, and pre-position resources, reducing response times and improving safety. AI-powered tools like drones and automated dispatch systems streamline inspections and prioritize repairs, allowing faster service restoration while minimizing costs and risks.

If utilities are to become fast followers in AI adoption, they should build a robust ecosystem that strategically integrates AI and other new technologies into their operations and across their networks.

The starting point is establishing strong data governance to ensure data quality, accessibility, and security, because clean and structured data is essential for effective AI implementation. Utilities should also create centers of excellence to drive innovation, identify high-impact use cases, and scale successful pilots across the organization.

Cross-functional teams can foster collaboration between IT and business units, ensuring alignment with organizational goals and accelerating deployment. Training employees to build AI fluency is crucial because they can then effectively leverage AI, foster innovation, and become agents of change, ensuring a successful digital transformation. By combining these strategies, utilities can achieve early wins that lay the foundation for long-term AI integration.

 

How should utilities transform their organizations and workforce to be competitive in today’s rapidly evolving landscape?

Meredith Bodkin: Utilities today face a more rapidly evolving, highly disruptive landscape than ever before, antiquating the static business models and one-way transmission and distribution of past decades.

With heightened regulatory environments, shifting work paradigms, suffering workforce cultures, and increasing customer load demands, utilities that want to remain competitive must make continuous transformation a core component of day-to-day operations. Utility workforce and operating model innovations are essential for cultivating the agility required to adapt to rapidly changing market dynamics.

Utilities must embrace flexible, modern workforce models, including multi-sector workforces, to generate the capabilities and capacity they need to innovate and mature at the pace of today’s market demands. The race for skilled resources is more competitive than ever as the existing workforce ages and labor markets wane, making enterprise alignment on talent acquisition strategies, career pathways, and succession planning critical.

In addition, skill gaps are becoming more apparent with advances in technology (particularly AI) and innovation in core business processes, creating a greater need for investment in upskilling, reskilling, and retaining top talent to drive sustainable change and profitability.

Organizational structures must evolve in lockstep with the workforce. The emerging distributed, intelligent, and mobile grid requires an innovative, collaborative, and dynamic operating model. Utilities must redesign their internal structures, processes, and technologies to deliver greater customer value.

Structures must remain flexible so they can rapidly respond to changing market demand and more easily adopt new business models and emerging technologies, such as advanced analytics and modern IT/OT systems.

Organizational transformation should also include external elements for additional agility and resilience. Building partnerships with technology providers, government, and industry accelerates capability building, allowing utilities to innovate more effectively and set new industry standards. The transformation utilities must experience is ultimately a generational one, and the people side of change cannot be neglected. When these issues are addressed effectively, utilities are better positioned for significant growth.

 

How are leading utilities advancing resiliency programs today in anticipation of increased threats to their customers and infrastructure from climate change, storms, and wildfires?

Aditya Ranade: Leading utilities are taking a few key steps in addressing resiliency. The first is to assess their assets’ vulnerability to extreme weather events by developing correlations between historical weather and their systems, such as inspections and outage databases. They can then use these correlations to develop future asset vulnerabilities to climate-driven natural hazards such as storms, floods, and wildfires.

Leading utilities’ resiliency programs are also typically ahead in their digital journeys by developing geospatial asset registries, accessible outage management systems, and digitized inspection data. A plethora of public and private datasets with downscaled climate data is available to choose from, so selecting among the choices can sometimes be overwhelming.

Utilities should think through the appropriate timeframe and climate scenarios for these hazards and choose datasets with appropriate spatial and temporal resolution for various situations. Some hazards, such as wildfires, are worsened by climate change and are a persistent threat today.

Others, such as chronic heat, may not take effect for a couple of decades, and yet others, such as flooding, are impacted by land features such as elevation and topography.

Quantified benefit-cost analysis typically ensures smoother regulatory proceedings including approvals and cost-recovery, so the second step is for utilities to use this quantitative understanding of vulnerability for benefit-cost analysis on specific resiliency programs, such as pole replacements, undergrounding, and substation flood control.

 

What innovations in regulatory mechanisms do you see utilities considering to meet future customer needs while maintaining affordability for all customers?

Peter Shaw: A confluence of policy and market drivers is causing upward pressure on utility customers’ bills. These drivers are spurring generational capital spending on utility infrastructure, as well as increasing electricity consumption at the point of use.

Replacing aging generation fleets with renewables, hardening grids in the face of accelerating climate hazards, and electrifying the transportation and space heating sectors are well documented trends driving utility integrated resource plans and utility revenue requirements.

Adding to the issue of unprecedented growth in power demand from data centers and manufacturing, the current cost-of-service ratemaking paradigm is ill-equipped to handle the affordability challenges facing utilities and consumers.

Regulatory mechanisms exist to blunt the deleterious effects of rate increases. First and foremost, beneficial demand growth holds the greatest potential for spreading capital recovery costs across a greater volume of delivered energy, allowing utilities to earn their revenue requirements while mitigating rate increases. Creative regulation that promotes electrification load growth can contribute to electricity’s long-term affordability.

In another example, cross-sector compensation/incentive mechanisms can enable gas utilities to earn on system investments, while providing peak capacity relief to electric utilities in exchange for avoided capacity compensation, potentially lowering bills for all consumers.

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Finance innovations including public-private partnerships can be leveraged to encourage investments in distributed energy resources – like onsite or collocated generation and storage – to provide energy at a cost that is less dependent on utility rates.

Moreover, regulatory incentives focusing on improving overall system utilization create a net downward pressure on rates, just as prioritizing rate impact benefits over other benefit-cost tests helps lower rates more readily than do traditional avoided capital cost tests.

Similarly, non-wires alternative investments can optimize the utilization of existing infrastructure to serve load growth and generate earnings more than infrastructure expansions do. By giving greater internal rate of return for non-wire alternative investments, regulators can help reduce rate base investments overall.

Policymakers and regulators should seize on the current period of exponential load growth to facilitate spending to upgrade the electric grid, which will help mitigate the financial impact on their customers.