Rebecca Smith
Adv. – Investments
Spring 2016
Industry Description
The electric utility industry consists of companies, often regulated public utilities, that provide electricity services such as electricity generation, distribution, sales, and transmission. This definition is based on the six companies from the following peer group: Dominion Resources, Southern Company, Great Plains Energy, PPL Corporation, Exelon, and Ameren. These companies engage in natural gas, nuclear, and solar energies to produce their electricity.
The strategy for companies in the electric utility industry for most of the 20th century remained unchanged. The goal was to build out the grid and power system as a regulated monopoly to achieve …show more content…
Customers are buying more efficient household appliances and overall using less energy. Businesses are also adopting green initiatives to reduce their overall energy consumption. The opportunities in the industry
Future Projections Advancing technologies and policies such as the Clean Power Plan are shifting the entire industry towards clean, renewable, and efficient energy resources. Once the CPP is implemented, states will need to submit plans by September 2016 and ensure power plants achieve CO2 performance goals between 2022 and 2030. “Measures would differ from state to state, but in general it will act as an additional accelerant, moving the industry toward renewable energy, energy efficiency, and other low or no carbon emission alternatives.” Economists are predicting that the economy will continue to recover over the next few years. As the economy is expected to accelerate, energy consumption will also accelerate as businesses and manufacturer’s need for energy grows. IBIS predicts a 2.5% increase in demand from the industry’s customer segment in 2016. They also estimate until 2020 that revenue will increase 3.2% as a result. Smart grid technology will continue to grow as it enables companies to cut