Blog - 5 takeaways from the investor-owned utility sector’s day on Wall Street
Paul Young
I am currently looking for Business Adviser or Financial Performance Management or ESG SME or Public Policy SME or Senior Financial Analyst or Senior Customer Success Management or Financial Solutions Expert
The U.S. power sector anticipates significant demand growth and capital spending over the next few years, but it will also need to navigate new federal rules and resource restrictions as it meets that demand, officials representing the investor-owned electric utility sector told Wall Street on Tuesday.
Members of the Edison Electric Institute C-suite met with analysts, investors and bankers to brief them on the state of the industry.
“This industry is key to the U.S. economy,” said EEI President and CEO Dan Brouillette. “We make up roughly 5%?of the GDP and ... it is the very first 5% of the GDP because the American economy, indeed the world economy, depends upon the provision of electricity for so much of our lives.”
Resource adequacy is a growing issue
Utilities are seeing significant demand growth at the same time they transition towards more intermittent resources, creating concerns about sufficient electricity supplies.
While resource adequacy concerns have shown up in specific markets over the last few years, “now, basically every part of the country is facing some amazing projected demands,” said Phil Moeller, EEI executive vice president, business operations group and regulatory affairs. Moeller also formerly sat on the Federal Energy Regulatory Commission.
Rulemakings on the way?
The utility sector anticipates several consequential rulemakings this year, including for the Securities and Exchange Commission to finalize climate disclosure requirements.
The SEC proposed the rule two years ago and it has garnered significant pushback,?in particular around the reporting of scope 3 emissions.?“Something is going to get promulgated within the next few months, probably April,” said Richard McMahon, EEI senior vice president of energy supply and finance, and chief ESG officer.
“We’d like to see some changes from the original proposal,” McMahon said. “We’d like to see less emphasis on scope 3 ... because the one thing we do know about scope 3 is it’s almost inherently inaccurate.”?
Equity issuances this year?
The clean energy transition is leading to record spending by utilities, and analysts want to know how the electric sector will support their continued capital needs.
According to Deloitte, utility spending will “reach new heights and continue to rise well into 2024.” Citing data from S&P Global Market Intelligence, the firm said utility spending across a sample of large electricity providers was up 18% in 2023, with further growth expected this year and next.?
The utility sector will likely be issuing equity to help maintain the clean energy transition but “it is a matter of timing, and when is appropriate,” McMahon said.
Affordability will be ‘front and center’
Residential electricity prices averaged $0.1588/kWh across the U.S.?in 2023, jumping from $0.1372/kWh in 2021, and prices are expected to rise further.
Electricity inflation “continued to increase in January ... putting further financial pressure on consumers across the country even as headline inflation slows,” according to data from the Electricity Transmission Competition Coalition.?Electricity inflation increased by 1.2% on a monthly basis, and 3.8% over the last 12 months, the group said on Feb. 13.
领英推荐
Utilities ‘still learning’ to counter cyber threats
With extreme weather and hackers continuing to challenge the grid,? Brouillette was asked to assess the current threat environment for critical infrastructure.
The industry is “well positioned on the mutual assistance side,” said Brouillette. “We have a long history there,?following Superstorm Sandy and some of the hurricane events, and now wildfires.”
While utilities have plenty of experience in helping each other restore power following a storm or fire, “we’re still learning, somewhat,?in the cybersecurity world,”?Brouillette?said. But, ”I feel really confident that our industry, our companies in particular, are doing the right things to protect not only their company, but their consumers. There’s a lot of work to be done because the nature of the threat is evolving.”
?
Paul Young CPA CGA is a former Senior IBM Customer Success Manager that has deployed over 300 data and AI solutions across industries. Paul is also focusing on driving better business decisions through the modernization of the data architecture.
?
?
Blog – Stock Market – Australia – February 16 2024 - https://www.dhirubhai.net/pulse/australia-stock-market-close-we-february-16-2024-paul-young-gfaec/
?
Blog – EV – OEM and IONNA https://www.dhirubhai.net/posts/paul-young-055632b_joint-venture-ev-charging-network-ionna-begins-activity-7163640583696101377-BPlh?utm_source=share&utm_medium=member_desktop
?
?
Blog – EV – Trade Barriers – Competition – Electrical Vehicles – BYD vs Tesla - https://www.dhirubhai.net/posts/paul-young-055632b_tesla-warns-of-growing-competition-from-automakers-activity-7156358895534317568-6mJz?utm_source=share&utm_medium=member_desktop
Blog – EV and Electrical Grid Challengers - https://www.dhirubhai.net/posts/paul-young-055632b_utilities-ev-charging-companies-must-collaborate-activity-7163639725617082368-9rCN?utm_source=share&utm_medium=member_desktop