HOW UTILITIES GET TO THEIR FUTURE

Platts/Capgemini Study: North American Utilities Most Concerned About Regulation, Infrastructure, Workforce, Pricing; Research Indicates Utilities Must Educate and Engage with Consumers for Success of Future Initiatives
25 May 2011 (Capgemini)

"According to a survey of more than 100 senior executives in the U.S. and Canadian electric and natural gas industries, the five most critical challenges facing the North American energy industry, in order of importance, are environmental regulation, aging infrastructure, non-environmental regulation, an aging industry workforce, and the need for new pricing mechanisms. The [fifth] annual survey…[was] conducted by Capgemini…jointly with Platts…to identify and prioritize current and future issues facing the utility industry.

"Maintaining high levels of reliable power delivery was cited as a key industry focus by more than half (55% giving it a rating of 9 or 10 on a scale of 1 to 10 from “not important at all” to “very important”) of the respondents…[in] April 2011. Executives indicated challenges to achieving this goal related to key infrastructure, specifically transmission…51% identified cyber security technology as highly important, especially in terms of customer data and control systems…44% cited the importance of infrastructure security, including pipelines, plants, and transmission…"

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"Nearly half of the survey respondents (40%) agreed increasing shale gas is very important; 37% gave high importance to expanding coal in more environmentally acceptable ways; and 31% emphasized the need for expanding the nuclear fleet…[but] fuel mix issues were in the bottom third of [concerns]…[Pricing and rates] ranked as the fifth leading concern…[C]lose to one-third of the survey respondents rated decoupling and critical peak pricing as very important…42% of executives believe it is very important to educate consumers…[but] only 27% strongly agree that it is the responsibility of the utility companies to educate…"

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"…[72%] of utility industry executives are or have been involved with smart meter rollouts to their customers. However, few respondents know if the technology has reduced peak electricity demand or usage…67% do not know or question if consumer use of smart meter data to manage their energy consumption will become mainstream…[34% of those] expect it will take between five and ten years…[60%] strongly agree that they need to embrace the concept of the consumer…46% strongly agree that utilities need to be more media savvy and become more involved in public relations… to engage more closely with consumers…

"…[On] the future of the energy industry…[ industry leaders said] that over the next five to ten years…[1] Utility executives plan to increase their focus on environmental regulation and pricing/rates…end users…and consumer technologies…such as electric vehicles and energy-efficient appliances, and infrastructure…[2]Most utilities anticipate their companies will increase the use of wind, solar, and natural gas in their overall fuel mix while the majority of executives…expect to decrease their use of coal…[3] More than half of utility executives…strongly agree the industry needs to focus more on system and cyber security…[and, 4] Eighty percent of the respondents believe the industry should create business models that support decoupling, but only [twelve percent] strongly agrees the industry will actually move in this direction…"