Smart-grid technologies will dismantle the regulated utility business model, says economist Lynne Kiesling.
Michael Burr is editor-at-large of Public Utilities Fortnightly. Contact him at burr@pur.com.
When consultants start talking about creating new service models, the eyes of utility executives and regulators tend to glaze over. After all, transformation has been predicted before—loudly and insistently—many times. Many so-called “transformative” technologies have come and gone. And despite many qualitative changes in the way utilities run their networks, most U.S. consumers still buy and use electricity in more or less the same way they have for about 100 years.
But that is destined to change, according to Lynne Kiesling, a Ph.D. economist and senior lecturer at Northwestern University. The primary reason: smart metering.
“Loads will behave differently in a distributed network with price responsiveness,” Kiesling says. “We’ve never had that potential before, and it may well be a paradigm shift for the industry.”
Kiesling spoke to Public Utilities Fortnightly about the long-term implications of that shift. In short, she predicts new technologies will prompt the industry to revamp its regulatory structures and business models over the next 20 years.
Fortnightly: People have talked about transforming the utility industry for more than a decade, and it hasn’t happened. What makes smart metering and the smart grid truly transformational?