Dive Summary:
- Disruptive Challenges: Financial Implications and Strategic Responses to a Changing Retail Electric Business, a report by the Edison Electric Institute (EEI), the trade group of U.S. investor-owned utilities, forecasts increased consumer access to rooftop solar panels will end utilities' monopoly on electricity.
- As consumers gain access to the means of energy production, utilities will sell less electricity and, as a result, utilities will raise electricity prices, which EEI estimates could rise by 20% or more, to recoup investments on fossil fuel power plants.
- The report highlights that solar panels will replace utilities' highly profitable mid-day peak power prices, as this is also when solar panels generate the most energy, thereby reducing the need for utilities' electricity; as these problems take hold, financial institutions will see utilities as risky investments and raise their interest rates, further fueling this vicious cycle.
- For more information, here are some Utility Dive insights on why utilities are being cut out of the U.S. energy business and why investor-owned utilities should fear munis and coops.
From the article:
"... Eventually, people will only be using the grid as a backup, combining ever-cheaper solar panels with ever more affordable batteries to store the power for when the sun isn’t shining. That’s called an energy transition.
Roberts sums it up like this:
'The report compares utilities’ possible future to the experience of the airlines during deregulation or to the big monopoly phone companies when faced with upstart cellular technologies. In case the point wasn’t made, the report also analogizes utilities to the US Postal Service, Kodak, and RIM, the maker of BlackBerry devices. These are not meant to be flattering comparisons.' ..."