Guidehouse
Michelle Fay is a partner in the Communities, Energy & Infrastructure segment and leads the firm’s global Energy Providers practice, supporting clients as they implement transformational programs. She brings more than twenty-five years of experience planning and delivering complex and innovative programs for utilities.
Michelle’s expertise includes program and project management, organizational change management, account management, process and performance improvement, grid modernization, energy efficiency, and analytics. She is an experienced leader specializing in emerging technologies and is respected for her integrity, leadership, team building, strategic planning, and laser-focused execution.
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.
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.
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.
