Dentons
Clint Vince is rated as one of the leading energy lawyers in the U.S. and has directed the expansion of the Dentons US Energy team into a premier practice that includes professionals spanning the continent coast-to-coast. He is chair of Dentons’ US Energy Practice and Co-Chair of the Dentons Global Transportation and Infrastructure Sector for the US Region.
Emma Hand is founding partner and Co-chair of the Dentons Global Energy Sector for the US Region, and a former President of the Energy Bar Association. Emma has extensive experience with energy efficiency, demand-side management programs, and smart cities initiatives, and is a highly skilled negotiator frequently called upon to lead broad-based community outreach programs.
Jennifer Morrissey is counsel with the Dentons US Energy team. She is a regulatory and appellate specialist, with expertise in both litigation and transactional matters. She has been repeatedly recognized as an innovator in her field. She also serves as the Editor-in-Chief of Dentons Smart Cities & Connected Communities Think Tank.
We are living in an era of unprecedented, accelerated technological change affecting all sectors of the economy. The electric utility sector is no exception. The entire industry is undergoing dramatic transformation. For the first time in more than a decade, demand for power is increasing, driven by explosive growth in data centers to power AI, a domestic manufacturing renaissance, electrification trends, and reshoring of manufacturing.
This is taking place against the backdrop of an urgent need for upgrades to aging infrastructure and a host of disruptive forces, ranging from uncertain regulation and policy, cyber intrusion, a dramatic increase in litigation, consequences from the threat of tariffs, supply chain issues, extreme weather patterns, and beyond. Our national electric grid needs massive investment, far in excess of current levels, to be able to cope.
Timely, cost-effective deployment of new technologies to secure the grid and enhance resilience are also essential because disruptions can be hugely costly. The most significant weather-related events last year amounted to nearly two percent of GDP.
In just the first few weeks of 2025, the California wildfire alone brought this year’s figure to almost half of last year’s total, which underscores the urgency of the investment need and the magnitude of what is at stake. As weather trends become more extreme, investments must be made to harden utility systems to better withstand severe weather events, or we will face increasing annual costs to repair the damage from such events.
Financing investments of this magnitude, always a challenge, grows more daunting in the context of tremendous structural changes being implemented at the federal level. Some regulatory hurdles may be cleared, but questions about how we will pay for it are far from eliminated, including important implications for affordability.
Clint Vince: AI promised more efficient, more cost-effective energy production and distribution, with reduced line losses and smart management of fluctuations and demands on a multidirectional grid, and with better resilience.
Despite the significant need for investments in the utility grid, there will be a limit to how much increase in energy bills customers can tolerate. Already, nearly a third of U.S. households struggle to pay their utility bills, according to the U.S. Energy Information Administration (U.S. EIA).
Many are faced with the choice between paying for utilities and paying for other essentials, in findings by the Congressional Research Service. According to the U.S. EIA, nearly half of the energy used in homes is for heating and cooling, which puts a particular urgency on resilience to extreme weather events.
But affordability is not a concern only for households. Energy is a huge cost component for many businesses. By some reports, small businesses spend sixty billion dollars each year on energy, and for industrial or manufacturing facilities, energy can be the single most costly input.
Accordingly, enhancing affordability is not simply a matter of managing disconnections and erecting bill assistance programs. Bill assistance, while helpful, addresses symptoms, but not causes, of the affordability conundrum. Moreover, with cuts to federal spending, some of these programs may soon be confronted with funding challenges. We need systemic solutions that can improve affordability at an earlier stage than once a bill is sent.
Innovation and Technology
Emma Hand: Energy is a huge cost component for many businesses. By some reports, small businesses spend sixty billion dollars each year on energy, and for industrial or manufacturing facilities, energy can be the single most costly input.
Technologies now allow customers to see and adjust their usage to prices in real time, which helps with managing costs and supports efficiency programs. Some companies have had success with pay-as-you-go programs. And smart home devices, though often costly, are becoming readily available.
Widespread deployment of these kinds of solutions is useful, but will not, alone, solve affordability. Visibility into usage only gets a customer so far when faced with an extreme weather event where health and safety require that heating or cooling be run even if cost-prohibitive, or when rolling brownouts interrupt business operations because of system supply or transmission constraints.
AI will eventually resolve some issues. AI promised more efficient, more cost-effective energy production and distribution, with reduced line losses and smart management of fluctuations and demands on a multidirectional grid, and with better resilience to disruptions. We are not there yet, and we won’t get there until hundreds of millions, even billions of dollars are put into modernization.
Utilities are in a tough position. Caught between needing to rapidly improve their systems and ensuring this occurs at a cost that their customers can afford, they will need to be creative in their approaches. Utilities do not benefit from having a product that their customers cannot pay for, but neither do regulators, businesses, and communities.
Collaboration and Energy Efficiency
Jennifer Morrissey: Collaboration and a systemic approach are key. Utilities, regulators, and customers together can rethink rate and financing structures that with other mechanisms exacerbate persistent affordability challenges and slow modernization efforts.
In our interconnected world, the solution for this challenge does not rest solely with utility companies. Collaboration will be essential.
At Dentons, our energy practitioners have been working on these issues in the energy sector for decades. We have been privileged in providing assistance in response to some of the highest-profile and most vexing affordability challenges that the electric industry has faced in recent memory.
For example, in New Orleans, in the wake of Hurricane Katrina, we were on the ground within hours, meeting with regulators, city leaders, and the local utility. We helped to craft a collaborative, innovative plan to rebuild the city’s devastated electrical system with only a single digit increase in rates, an outcome that pundits had said would be impossible to achieve.
We have worked in cooperation with regulators, utilities (investor-owned, municipal, and cooperative), and stakeholder groups to design and implement ground-breaking cost-saving energy efficiency programs, to diversify resource portfolios, and to creatively manage and provide relief from cost impacts in response to construction events, natural disasters, major market changes and anomalies, and other disruptive forces.
We also work closely with nonpartisan and bipartisan stakeholder organizations that are grappling with affordability. For instance, we have a longstanding relationship with the Alliance to Save Energy, where we serve as outside pro bono general counsel.
The Alliance is working to promote and enhance energy efficiency as the nation’s most abundant and cost-effective energy resource, saving consumers and businesses billions of dollars, while also strengthening grid reliability and resilience. We have participated in research through this and similar independent organizations to evaluate causes and impacts of energy insecurity both on disadvantaged communities and on our economy as a whole.
Our Smart Cities & Connected Communities Think Tank grew out of these and similar experiences that have demonstrated over and over the need for a collaborative approach to successfully tackle dramatic modernization of digital, physical, and social infrastructure.
With more than eight hundred thought leaders in roughly eighty-six countries, the Think Tank brings together leaders of government, businesses, academia, innovators, end users, and others to collectively address legal, economic, and policy challenges associated with infrastructure modernization.
The goal is to assist cities and communities in their efforts to optimize delivery of public, private, and hybrid services so that they are efficient, cost effective, secure, equitable, and beneficial for all stakeholders. Related to energy affordability, the Think Tank has recently done work on electrical system implications of increased energy demand, the potential of AI for the energy sector, securing critical infrastructure, new energy resources, and climate risks, among others.
Collaboration and a systemic approach are key. Utilities, regulators, and customers together can rethink rate and financing structures that, together with other mechanisms, exacerbate persistent affordability challenges and slow modernization efforts.
Our current paradigm is litigious by design, which can draw focus away from innovative solutions in favor of defaulting to familiar but unworkable concepts. The level of investment that is needed will require a very different conversation about cost-recovery mechanisms. By changing the approach to one of collaboration, better results for all interested parties can be achieved.
