Transforming Ontario’s Regulated Utilities into Energy Services Providers

For the past many years, our utilities have had discussions focused on coming up with a new business models to transform our sleepy regulated utilities into energy service providers. As the future of the industry comes into serious consideration in Ontario, 2016 is now the year these utilities need to chart their course towards their transformation.

While a few utility companies have started down this path, until recently the main focus has been to come up with defensive strategies that bring reduced costs to the consumers and saves a little energy, we can now see companies taking concrete steps to incorporate these ideas and strategies into the upcoming business models for growth in the sector. It’s now time to finally both complement and augment the solid foundations of our utilities with new technologies and ideas and business models for them to truly become energy services companies.

The term ‘utility death spiral’ is something that is becoming famous as gradually the distributed energy technologies expand. But the question is how real this is? Are the regulated utilities slowly disappearing or are they on their way to new model for transforming regulated utilities into energy service providers?

According to a study held by Berkeley lab, distributed solar PV are becoming the most immediate form of threat to regulated utilities. However, there is a tidal wave coming over the sector. There is a huge opportunity for utilities to transform and come up with a new business models and offering that will be much more profitable and will work to efficiently manage a growing base of distributed energy resources while building a new asset class.

About forty percent of the carbon emitted in North America comes from the power generation. New Business energy regulatory models will help people foster environmental resiliency, sustainability, more customer service options and greater control for the customers.

The sector is on its way to a major shift, including time varying rates and grid modernization and to creating a model that offers efficient, robust and well-resourced utilities and not only that but reduced costs to all the consumers supporting economic growth indirectly. Other initiatives also include electric vehicles that are leading to increased activity in distributed energy sector.

The sector is pushing the envelope, and Ontario is set to conduct the most important and comprehensive proceeding for transforming regulated utilities into energy service providers to shape the future of the utility business.

As the industry transforms the utility business to a whole new model for the future, certain questions also arises. Who will have access to the customer data? How will you transits from a cost of service model to a performance based model? What metrics will be used? These are the details that still need to be worked on. But the change is coming for sure.