Utilities x Load Growth

Until recently, the electric system in the United States had been managed for decades to support a more or less flat load profile. We are entering a new phase of electricity market dynamics, with long-tailed macro trends across industrial electrification, EV adoption, and data centers manifesting demand growth runway into the 2030s. Scaling the grid to service greater load volume is one of the primary capital allocation calls facing the Utilities sector, along with the need to replace/harden existing Networks infrastructure and transition Generation fleets to cleaner (albeit more intermittent) resources.

C-suites at regulated Utility companies are tasked to deftly balance investment priorities towards capturing new load service opportunity, maintaining system reliability & resilience, and managing asset duration and cost efficiency; all within the parameters of retail bill affordability, emissions targets, and financing sources. Policy uncertainty, permitting bottlenecks/supply chain pressures, and increasing risk of extreme weather events all complicate strategic resource planning and execution.

Established rate case filing procedures between regulated Utility operators and Public Utility Commissions (PUCs) are often rigid and slow to adapt to the changing dynamics, opening the door for merchant IPP and distributed generation solutions to fill market gaps for timely infrastructure development. Ultimately, the share of addressable opportunities captured by competing segments of the industry will hinge on factors like market structure, asset location, and cycle timing.