Fortnightly Magazine - March 2017

Innovation success will require that utilities build distinct internal capabilities combined with parallel, directed future investment. However, they will supplement this activity simultaneously with external leverage through venture capitalists, start-ups, OEMs, partners and acquisitions. This formula is already being followed by a number of companies that have been leading the sector in formalizing innovation as a capability.

I do not understand why we are still distracted by Net Energy Metering (NEM). It worked well when we had not-so-smart meters and were trying to encourage rooftop solar penetration. People in general and students of regulation in particular are left confused and can easily find some support for both sides. This results in conflicts and proposed compromises that keep the debate going at full tilt. Two things are missing or mostly overlooked in all this regulatory discourse.

Debates over utility business and regulatory models have sidestepped a fundamental question: What do state legislators and regulators want the electricity utility of the future to do? Do they want "fat" utilities that play a larger role in implementing public policy and delivering energy services to customers? Or "skinny" utilities that are more narrowly focused on the ownership and upkeep of the grid?