As technology advances, customers’ use of electricity evolves, and threats to electricity delivery mount, significant changes are needed in the electric utility sector. Electric utilities will need to make significant shifts in their priorities and in how their performance is evaluated.
The electric utility industry needs new regulatory models, so utilities can be profitable while they oversee a transformation to the grid of the future. This transition will require considerable investment, but it will also create efficiencies and deliver a much broader suite of services to customers.
The S&C regulatory team has laid out what it believes to be the most likely road regulatory bodies will follow to enact these changes. Countries and localities will differ in the specific makeup and pace of change, but the report asserts most will start with adaptive rate-making, the inclusion of non-wires alternatives, adoption of performance-based regulation and, eventually, transition to a distribution system operator role for electric utilities.