Utilities ‘Need To Be More’ Than Electricity Providers, Entergy and ComEd Execs Declare

Legacy utilities are grappling with the need to reinvent
themselves in order to survive.

A successful future involves improving customer experience and
expanding offerings like smart home appliances, solar power and
electric vehicles, executives from utilities Entergy and ComEd said
in the opening keynote at
DistribuTech
 in New Orleans Tuesday.

Speeches are not the same as actions, but the keynote address to
tens of thousands of distribution grid professionals offers a
valuable glimpse into what strategic vision the utilities have
decided to communicate at this point in time.

It’s a starkly different picture than one utilities painted
just a few years ago, when the core business was keeping the lights
on, and net-metered rooftop solar threatened to lure away customer
dollars and send utilities into
“death spirals.”

“The death spiral, as some predicted, I think is dead,” said
Terence Donnelly, president and COO of Chicago area utility
ComEd.

Instead, the future of the grid will bring more renewable
energy, energy storage, electric vehicles and microgrids, Donnelly
explained, in a speech tellingly titled “We are not in the
utility business any more.”

“It isn’t enough to provide a service that’s merely
useful,” he said.

“We will need to be more to our customers, communities and
stakeholders,” Donnelly continued. “Our world is changing faster
than ever. I think we all feel that change in our bones.”

Paul Hinnenkamp, executive vice president and COO of Entergy,
recalled Netflix’s unexpected rise and eventual displacement of
incumbent Blockbuster as a warning against utility complacency.
Google and Amazon received shoutouts as well.

“If this business is going to be disrupted, why don’t we
disrupt it ourselves, and be wildly successful doing so?”
Hinnenkamp said.

The transition from “supplier” to “partner”

This self-disruption requires that utilities think of themselves
as more than electricity providers, Hinnenkamp added. They should
transition from “supplier” to “partner,” delivering to
their “customers” (rather than that old concept, “ratepayers”)
services that they desire.

After all, electricity itself doesn’t get people excited.

“You want the outcomes that our electricity provides,”
Hinnenkamp said.

How to deliver this vision remains to be seen. If encouraging
customers to take advantage of rebates for efficient lightbulbs is
hard enough for some utilities, an upsell to a suite of home energy
services will be even more difficult.

Entergy’s recent headlines aren’t likely to help the pitch
to consumers: News broke last year that the company won approval
for a controversial gas plant in New Orleans with help from a crowd
of people who were paid to turn out in support of the plant.
Entergy insists that it did not know a consultant for the company
procured the paid actors,
The Times-Picayune
reported. The fallout from the scandal is
still unfolding.

Other trends make for a more natural entry point into the
home.

Smart home devices are coming to market that can synchronize
energy usage with grid price signals. Utilities could take on a
greater role in managing the complexity of dynamic energy rates on
behalf of customers.

There’s an even more natural fit with electric vehicles, which
could substantially increase the amount of power homes draw from
the grid.

Market penetration of electric vehicles requires capital
investment in electrical charging infrastructure. If old-school
utilities know how to do anything, it’s build infrastructure and
deliver electricity. If competitive market rules don’t get in the
way, EVs drive new utility revenue.

ComEd can point to a concrete project that instantiates the
new-fangled utility role: the Bronzeville microgrid, which Donnelly
described as “not just a technology project.” The hub of
localized electricity generation and storage will serve as a
resilient community hub for electric mobility, ride-sharing and
STEM education, he said.

Regulators
approved that project
in early 2018, after considerable
scrutiny of whether market rules would allow the utility to own
generation assets in the system, and whether all ratepayers should
pay for a localized asset serving a particular neighborhood.

Much work remains to be done if the utilities of yore wish to
transform into home energy platform companies. Wanting to change is
the first step.

In the story Entergy and ComEd told at DistribuTech, the grid is
heading toward a lower carbon, more distributed, more digital
place — and it’s up to utilities to adapt to that reality.

Source: FS – GreenTech Media
Utilities ‘Need To Be More’ Than Electricity Providers, Entergy and ComEd Execs Declare