The road ahead for energy utilities
Investments in energy efficiency can significantly help energy utilities as they face a future of stagnating sales, aging infrastructure, growth in distributed generation and stricter environmental regulations, says a new report from the American Council for an Energy-Efficient Economy.
While utilities are unlikely to face a “death spiral” as some have predicted, they need new strategies to prosper, according to the report, “The Future of the Utility Industry and the Role of Energy Efficiency.” Energy efficiency investments can help by:
Creating new capacity at low cost
Helping to defer transmission and distribution investments
Providing low-cost emissions reduction strategy
Lowering consumers’ bills and so making rate increases for new infrastructure more affordable
Increasing customer engagement
To be most useful, energy efficiency programs should be well integrated with demand-response and distributed-generation efforts.
Meanwhile, the report says that to prepare for a strong utility future while meeting public goals, utilities and policymakers should provide consumers value for their money, get regulatory rules right, and establish fair policies and robust systems in areas including power pricing, decoupling of profits from sales, incentive regulation, and coordination of a more complex grid.
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