Utilities in the U.S. are moving to a cleaner, more distributed power system, Utility Dive's sixth annual sector survey shows, but are unclear about how they will get there.
The 2019 State of the Electric Utility Survey, out today, shows that power providers are continuing their decades-long transition away from large coal generators and toward more renewables and natural gas.
Utilities are also increasingly bullish on the growth of distributed resources, particularly electric vehicles, according to the online survey of more than 520 utility employees.
Those trends have been persistent in Utility Dive surveys for years, but that continuity masks a growing anxiety in the power sector.
Utilities are increasingly unsure and conflicted about what types of regulation and market structures they want to foster this transition, and they list this uncertainty as the top concern with their changing fuel mixes.
Part of this uncertainty may come from widely expected changes in utility regulatory models. While more than a third of respondents said they operate under a traditional vertically integrated utility model today, only 5% expect that to be the case in a decade.
In its place, many utilities expect — and hope — to have more performance-based ratemaking.
While the expectation of a move to PBR is clear among respondents, there is less agreement about what type of electricity markets will drive the transition to a cleaner power system. While utilities largely expect and desire a restructured market, more than a quarter are unsure of the best model.
One point of near consensus in the survey was the utility sector's antipathy toward key priorities of the Trump administration. More than 80% of respondents think the federal government should regulate carbon and only 4% support a federal bailout for coal and nuclear plants.
If business model pressures weren't enough, utilities are also keenly aware they face persistent security threats. For the third year running, physical and cyber grid security topped the list of the sector's most pressing concerns.
How will utilities deal with these changes? The 73-page report gives more insight into their changing business models, outlook on distributed resources, plans for rate design and more.