The electric utility system is in a state of transition, driven by distributed renewable energy and flat energy demand, and aided by state regulation. If utilities are to successfully navigate this transition, they must adopt a business model that will accommodate local, equitable access to energy production and management, says an article in the Huffington Post.
Electricity sales in the United States are declining, and competition from renewable energy sources is growing—not just from other energy suppliers but from electricity consumers. As a result, US electric utilities are facing $48 billion in revenue losses. According to the article, 500,000 US homes are currently using solar energy, and it’s getting more affordable every year. Rooftop solar, smartphones and widespread energy storage are giving utility customers more control over their energy usage and allowing them to capture their share of the nation’s energy dollars.
Some utilities are actively fighting the growth of renewable energy, while others have adopted a business model that accommodates flat energy demand and rising customer energy production. The latter, referred to as Utility 2.0, is a good start, but utilities cannot ignore the flow of energy dollars out of communities. What is needed, the article posits, is Utility 3.0, or energy democracy. Energy democracy adds local control and equitable access to the low-carbon, flexible and efficient energy grid of the future.
Several states are already working toward energy democracy. Vermont has identified and adopted key strategies such as net metering, integrated distribution and transmission planning. It has an independent energy efficiency utility, and a feed-in tariff to encourage broader distributed renewable energy development. New York is considering how to make an open and transparent marketplace that puts utility customers on an even footing with utilities in providing key energy services.
Utilities may not continue to profit from retaining control over the generation and transaction of power on the electricity system; however, they might be able to profit from designing and deploying the infrastructure and software to create a democratic energy distribution system, according to Huff Post.
Photo via Shutterstock.
