Last week, investor-owned utilities in New York submitted a draft of innovative “demonstration” projects as a part of the state’s Reforming the Energy Vision initiative.
Depending on the project, whether it is a community solar projects, efficiency marketplace, or a series of microgrids, the utilities were tasked with finding not just new ways to supply electricity but also how they could profit from concepts where a third-party vendor was often involved in the product.
These utilities companies have realigned their focus on evolving their business models, testing new revenue concepts and ultimately evolving their role.
One article from UtilityDive uses the ride-sharing service Uber as an example:
“Uber has created a business model that uses a network of third party providers to benefit the consumer, the third party providers, and Uber.” Central Hudson said in its proposal. “Utilities are in a unique position to establish a similar business model.”
Less than a decade ago, the traditional narrative saw utilities fighting distributed resources and the concept of electric companies as service providers. However, New York’s progressive regulatory environment has pushed utilities to move quickly, and in ways they may not be immediately comfortable.
Companies will now need to update their energy deliver business models and embrace ever changing markets, technologies, environmental concerns, and customer needs.
John Maserjian, a spokesman for Central Hudson pointed out that the REV proceeding is about learning to address that challenge.
“Adopting to any new model can bring challenges, as well,” he said. “By starting with these demonstration projects, though, we can better understand what works and what might not work, how the marketplace will respond, determine the best way to engage with third party providers, and gain insights on customer benefits.”