We’ve talked for decades about disruption in the electric and gas industries. We’ve faced “unprecedented challenges,” existential threats, fundamental policy changes, exponential technology growth, extreme weather events, and a changing mix of customer preferences and usage patterns. The vertically integrated electric utility framework of the 1970s has been restructured, fragmented, and recast along asset class boundaries (generation, transmission, etc.), each with different business models, operating frameworks, ownership types, and regulatory oversight. Disruptive threats experienced over the past 50 years have become mainstream and are part of our ongoing dialogue. Is today any different? Given the nature and speed by which major disruptors, such as the clean energy transition, are impacting our industry, it might be.

A Clean Energy Partnership

In February 2020, with bitcoin at $9,275, the business case for mining with nuclear power was a compelling value proposition. Now, at $47,300, that same proposition is much more compelling. When this value proposition is coupled with the mandate for non-carbon-emitting energy use in cryptocurrency mining, nuclear power is a strong partner.

Leading through Turmoil

Faced with macro challenges that threaten the traditional utility business model—stagnant demand, emergence of distributed resources, decarbonization, unpredictable energy markets, increased regulatory pressures, and lingering impacts of COVID-19—utility leaders are under pressure to simultaneously reduce cost and improve performance.

See below for methodology, assumptions, and limitations.

As investors and consumers alike increase their focus on sustainability, establishing carbon reduction or net-zero goals has become table stakes among industry leaders. According to a recent report from Data-Driven EnviroLab and the NewClimate Institute, the number of businesses that established net-zero goals increased threefold from 500 at the end of 2019 to more than 1,500 during the first nine months of 2020. Many of these net-zero pledges target full decarbonization by 2050, a date quickly becoming the benchmark for company climate pledges.

Energy efficiency (EE) programs, which have been a staple of utility services for many years, are receiving renewed focus. Specifically, EE not only provides savings to customers, but it is increasingly seen as a necessary tool to achieve ambitious carbon-reduction goals. In these cases, utilities are facing a significant ramp-up in both EE targets and budgets, prompting them to ask how to approach increasing the scale and scope of programs.

Introduction

With the transportation sector accounting for the largest portion of greenhouse gas (GHG) emissions in the United States,[1] meeting state, local, and corporate GHG emissions targets will require businesses operating fleets to proactively adopt electric vehicles (EV). With this in mind, companies are beginning to pursue electrification, including halting procurement of internal combustion engine (ICE) vehicles and planning for the considerable charging infrastructure, business model impacts, and personnel changes required to operate an electric fleet.