Session 4B: Utility Management Strategies
The regulatory compact that has prevailed over the past century in the North American utility industry – and continues to prevail – is that the regulated utility is permitted to install and operate the machinery to make the electric grid function in a reliable and cost effective manner in exchange for being allowed to earn a fair return on capital investment.
As the information age eclipses the industrial one, and new innovations in “software” outpace innovations in “hardware”, what will these trends mean for utilities? What impact will they have upon the traditional regulatory compact, on determination of rate base, and on determining tariffs?
As rate base is eroded by trends such as customer owned distributed generation, mini-grids and energy efficiency programs, and the quantities of electricity diffused through the grid diminishes or evolves away from traditional centralized plants, how can utilities use their current position as the centres of the smart grid to adapt their business model to the new environment?
The presentation will discuss how utility customers likely evolve their electricity consumption patterns in the coming years, and the advantages – and disadvantages – the regulatory framework presents to incumbent utilities.
Michael Walsh, Principal and International Managing Partner, Midgard Consulting Inc.
Matt Good, Senior Consultant, Midgard Consulting Inc.