Findings of Black & Veatch Strategic Directions in the U.S. Electric Utility Industry Report


Findings of Black & Veatch Strategic Directions in the U.S. Electric Utility Industry Report

Greentech Lead America:  Findings of Black
& Veatch’s sixth annual Strategic Directions in the U.S. Electric Utility
Industry Report:

Regulation (economic and environmental) will remain the
primary motivator for utility leaders concerning investment decisions.
Additionally, electric customers will be the ones who pay for changes through
increased rates. More than 65 percent of utility leaders stated that customer
rates had risen in the past year. More than half believe that rates will rise
significantly because of environmental compliance programs.

The potential benefits of smart grid programs include
better power quality and reliability, improved customer service and
opportunities to reduce power consumption. However, regulator and customer
understanding of this potential lags behind the pace at which the new
technology is being deployed. Currently, “customers’ lack of interest and
knowledge” is ranked as the top impediment for smart grid investment.

The nexus of water and energy continues to be a major
issue for the industry. Nationally, water supply is second only to carbon
emissions legislation as the industry’s top environmental concern. In
drought-stricken Texas, it is the top concern.

Utility leaders are starting to see gold in green
programs. The industry’s view on renewable energy is shifting from one of doubt
to one of opportunity. More than two-thirds of respondents stated that
renewables could provide benefits in the form of customer and regulatory
relations, investment incentives and future revenue generation.

More than 40 percent have begun the process to modify
their service models to account for distributed generation resources, such as
rooftop solar.

Utility leaders, on average, estimate that electric
vehicles will account for 7 percent of overall electric load by 2025. The 7
percent projection, however, requires exponential growth in electric vehicle

Solar is the top-ranked traditional renewable technology
for the second year in a row. It was the top-ranked renewable technology in all
geographic regions of the country.

Last year, 81.5 percent stated that they believe there is
a future for coal in the United States when fiscal realities are fully
considered. This year, less than 60 percent believe this statement.

“Utilities are evolving in a manner that will
redefine core functions such as power production, distribution and customer
service. Driven by new technology and regulatory shifts, we are seeing the
impact across all aspects of the electric industry,” said John Chevrette,
President of Black & Veatch’s management consulting division.

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