Top 2018 Electric Utility Challenges

Now that 2017 is waaaaay back in the rear-view mirror, and the 1Q of 2018 is well underway, I thought it would be fun to find out what industry experts consider to be some of the top electric utility challenges for this year and beyond.  A quick Google search reveals that this is a relatively well-covered topic, so I focused on the article that seems to offer the clearest picture.  Check out the article for the details.  Below is a summary.

Top Electric Utility Challenges for 2018 and Beyond

The article referenced above lists eight electric utility challenges.  Obviously there are a lot more, but I feel like these eight are fairly representative of the lot. So, without further ado, here is the summary (two are similar so I combined them below).

1. Uncertainty from utility regulators – This one has been on these types of lists for years, so no surprise here.  The industry is changing, and regulators in a sense are struggling to keep up, which creates a lot of ambiguity, especially when it comes to outage restoration scrutiny.
2. Deregulation – Another common theme from previous lists.  It’d been over 20 years since the residential market deregulated and guess what – it’s still not worth switching for the average homeowner.  C&I customers are the ones that will truly benefit from market reform.
3. Lower ROI – The article pontificates that return on investment or ROI is greater on the supply side than on the demand side, yet utilities are forced to increase efforts on the latter.
4. Barriers to innovation – Utilities are getting better at being innovative, but pet projects and small pilot programs are not enough to move the needle.  Instead, they are distractions.
5. Emergence of new technologies – More and more people are going off the grid by using renewable energy and/or distributed generation, which has obvious revenue implications.
6. Making subpar investment decisions – Utility companies, like most companies, are biased toward investing in initiatives that provide immediate payback, as opposed to investing for the long run.
7. New competitors – The industry is being encroached by telecoms, smart device companies, and startups, and this is a major electric utility challenge because electric utilities are not very good at dealing with competition.