Positive Deal Outlook
Stephanie Chesnick leads Americas Power & Utilities at Ernst & Young LLP. Jeff Miller leads Americas Power & Utilities Strategy and Transactions at EY. Ryan Levine leads Americas Power & Utilities Consulting at EY.
For power and utilities companies, envisioning a future of abundant and affordable clean renewable energy is much easier than devising a plan to achieve it. Electricity demand projections are growing for the first time in decades, driven by a combination of manufacturing onshoring, increased electrification, and data center demand growth. In response, utilities are striving to quickly finance and build additional energy infrastructure while continuing to balance reliable energy delivery, keeping customer rates low, and meeting decarbonization targets.
While the effort to build new energy infrastructure comes at a time when the cost of capital could remain elevated, utilities have an opportunity to take advantage of new and evolving funding sources — including the Inflation Reduction Act and Infrastructure Investment and Jobs Act — as well as a potentially streamlined regulatory environment given an incoming Republican administration.
That said, power and utilities companies are seeing record levels of investment, as well as calls to modernize their grids and add renewable distributed energy generation. That investment comes, however, with increased physical and IT infrastructure needs, different compliance standards, and greater complexity to managing costs.