The U.S. electric utility industry is undergoing an evolution, driven by the growth of renewable energy and other factors, according to a new report from Black & Veatch.
"Utilities are evolving in a manner that will redefine core functions, such as power production, distribution and customer service," says John Chevrette, president of Black & Veatch's management consulting division. "Driven by new technology and regulatory shifts, we are seeing the impact across all aspects of the electric industry."
According to the report, economic and environmental regulation will remain the primary motivators for utility leaders’ investment decisions.
In addition, electricity customers will be the ones who pay for changes through increased rates. More than 65% of utility leaders stated that customer rates had risen in the past year, and more than half believe that rates will rise significantly because of environmental compliance programs.
The report also found that utilities are starting to "see gold" in green programs, as the industry's view on renewable energy is shifting from one of doubt to one of opportunity.
More than two-thirds of respondents stated that renewables could provide benefits in the form of customer and regulatory relations, investment incentives and future revenue generation.
The report also found that coal is losing favor. Last year, 81.5% of survey respondents stated that they believe there is a future for coal in the U.S. "when fiscal realities are fully considered." This year, less than 60% believe this statement is true.