Harnessing Disruption


Published In: EnergyBiz Magazine January/February 2012


AS I PUT TOGETHER the content for Energy-Biz, I am privileged to have access to thoughtful, powerful executives, leading government officials and industry experts. We routinely discuss the most pressing long-term issues facing our energy sector.

One overarching theme has emerged from these conversations in recent months, focusing thoughts and concerns that have been bubbling up for years: Disruptive forces are accelerating. Those forces are technological, financial, political and legal.

Energy sales are flat. At the same time, the seemingly unending period of economic downturn has put pressure on governors and state regulators to hold the line on the rates that utilities can charge consumers for every unit of energy sold.

Cross-country transmission lines and a spider network of distribution lines put in place during the post-World War II suburban expansion of America, along with power plants erected to enliven those lines, are old and getting older. According to one study, the electric utility industry will need to invest $1.5 trillion by 2030 in needed infrastructure.

In two decades, utilities will have to raise and spend 1.4 times their current net asset value, which has been built up over decades.

Disruption will come in many guises. New technologies promise to give consumers unprecedented insights into their own energy use and lead them to alter their behaviors. Will utilities usher in those changes or will new market entrants use them to launch huge, profitable new enterprises?

These are the themes that will be explored in the fourth EnergyBiz Leadership Forum in Washington, March 19-21.

The disruptive forces now buffeting the utility sector are significant and unprecedented. We have transformed our conference to deeply consider the disruption through the eyes of talented, diverse executives to better understand what they understand - and what they should know.

Leading chief executive officers will offer their nuanced views of the technological, financial and political forces external to their organizations, and the inner workings of their businesses.

Chief information officers have a seat at the highest level of their corporations. What are they being asked by their executives - and what are they telling them - about the long-term costs versus the benefits of the hundreds of millions of dollars of investments waiting to be made? Does it make sense to go all out and become as smart as possible about operations and customers? If not, how smart will be smart enough to thrive? Is it possible insufficient investment will harm the organization?

Chief financial officers will discuss what the financial community believes can and should be done to build the utility of the future. What will be the cost of making needed investments, and when might those costs endanger financial viability in a tough economy?

Risks are magnified in these times of industry transition. There is regulatory risk, commodity risk, risk of embracing the wrong technology or putting in place technology that will soon be outdated. What are chief risk officers telling their companies about how all these risks can be sorted out and prioritized?

The utility executives responsible for monitoring every aspect of how their company touches the customer - what are they saying about harnessing disruption?

The disruption that is facing energy is hugely complex and vital. Understand the emerging strategies for harnessing that disruption and you will seize the future of the utility business.

I hope to see you at the EnergyBiz Leadership Forum as we focus on this important work and dive deeper into the problems and opportunities that lie ahead.


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