Pace Global

Utilities

The electric utility industry faces a growing set of challenges to its traditional business model, as costs are increasing faster than load, customers are demanding more choices and competitors are gaining traction with distributed energy. Meanwhile regulators are promoting distributed generation through subsidies and new requirements for integration into the grid. As a result, utilities must plan for changes in market design, increasing environmental regulatory complexity, energy efficiency mandates, new rate structures, deployment of new generation technologies, and competing with or supporting new market entrants.

The natural gas industry is similarly going through its own transformation and structural change with impacts on both gas and electric utilities. In a short timeframe, shale gas has grown from zero to almost half of US supply, shifting the focus of new incremental production from the Gulf Coast to the Northeast and necessitating a major pipeline build and flow reversal. Meanwhile, exports markets are burgeoning with the rise in U.S. LNG exports and the ramp up in exports to Mexico well underway. In addition, market and regulatory changes in the U.S. are giving structural advantages to gas generators, forcing coal retirements. The market pendulum is swinging from a state of significant oversupply to one in which demand is a key driver of prices. Given the number and scope of recent market shifts, it is vital for gas utilities, as well as electric utilities with gas-generation assets, to have an up-to-date view of market fundamentals in order to understand their expected fuel supply costs, options, and other risk parameters.

Pace Global assists our utility clients in navigating the complex decisions across all aspects of their energy asset strategies, planning, and management. More than ever, utilities require an understanding of where the industry is headed and the risks and opportunities that will shape its future. Pace Global’s planning framework, market analyses and risk management programs are designed to help utilities adapt its strategies to meet these challenges.

Pace Global