In the world of meter-to-cash as well as the larger utility industry, perhaps the greatest truism is that this business is ever-changing, ever-evolving.
An article in the Seattle Times highlighted several facets of the paradigm shift facing gas, electric and water/wastewater utilities alike. Optimistically describing its electric generation future last September as “gassier and windier,” within months Puget Energy chose to sell itself to a consortium of private investors to ensure funding for the power plants and equipment required to keep up with surging demand and to comply with sustainable energy mandates.
As with the recent privatization of TXU, the investors have committed to reduce pollution and emissions plus increase expenditures for efficiency measures. Both utilities and their prospective owners worked with regulatory authorities, environmental awareness groups, the public and their employees to gain broad support for their need to change.
Although Puget Energy is the parent company of Washington state’s largest electric and gas utility, in the larger market it is a medium-sized utility with a stagnant stock price. The company faced capital expenditures of $5 billion over the next five years to fulfill the growth in demand for energy as well as comply with requirements for renewable energy. That $5 billion stands in sharp contrast to the $500 million it raised over the past five years through three stock offerings.
Does this mark an era of transition? Is the utility industry turning from mergers and foreign ownership to privatization? Puget Energy certainly represents a modern utility driven by capital needs far beyond the model of a merger candidate.
The national media has not yet grasped the future of increased energy and utility costs because the reality of it is still a few years off and obscured by attention to environmental issues and global warming. In truth, the greater story is the strategic planning and innovative solutions being developed by the utilities, compounded by the immediate need for vast amounts of capital investments, regulatory support and tax incentives. Public or private, investor-owned, munis or co-ops, the challenges are almost beyond comprehension.
To meet the needs of electric, gas and water/wastewater utilities, CS Week works with recognized leaders in the industry to identify issues impacting their businesses today and far into the future, then focuses the workshops, CS Week College, CS Week Synergy Groups and CS Week Executive Summit on those issues for CS Week Conference. Join us in San Antonio, Texas, May 19-23, 2008, for the energy, expertise and commitment to education that the future demands right now.
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Rod Litke, COO, CS Week
For more information, please visit www.csweek.org