Climate change will and is affecting different industries in radically different ways. For oil companies it means a threat to their existence, for many green startups it means a chance to exist at all. For companies that plant trees or work with new methane capture technology it means a chance to develop and grow as an integral part of carbon offset programs. The coal industry, while the largest source of power in the U.S., is scratching for its public relations life with questionable programs for clean coal. Climate change is also creating new challenges and opportunities across the utilities industry.

Utilities have traditionally existed to create and sell electricity- cities and suburbs have all grown up around the electricity grid. Utilities create power and sell it at approved rates to just about everyone. Although recently there has been a push by some environmentalists to live “off the grid,” this is still not a movement that affected the utilities or challenged the grid as the main way that people get energy.

Until now. People across the country are looking for ways to save money and reduce greenhouse gas emissions- and for most people that means using less electricity and switching to cleaner energy options- like installing solar panels or adding insulation to a home so the heating needs are lower.
As a recent New York Times article points out, this is presenting a challenge to the classic utility business model- part of their role is to help create and expand new clean energy options, but when people use less energy, they make less money.

Larry Makivich, VP at HIS Cambridge Energy Research Associates puts it succinctly: "What other business do you see in the U.S. economy where you expect a company that has a good business model to spend and to invest a lot of money to use less of their product?"

I can’t think of any. The idea of being asked to invest money in getting people to use less of your product would sound ludicrous to, say, a food company. It’s like when tobacco companies put out anti-smoking ads or if Hershey’s was to put on a campaign about eating healthy by not eating so much chocolate. But in addition, it would mean creating the cleaner or healthier options- the Marlboro Gym or the Hershey’s veggie platter.

David Owens with the Edison Electric Institute (EEI) says that there are no business models for what the utilities will need to do- it’s a time of potential transformation. He said that some utilities are looking at ways for customers to own distributed power generation and other options for customers to manage their own electricity as options for making money in the future.

Everyone seems to agree that making energy more efficient is the easiest and most cost-effective way to start, but the coming changes will affect everything from how power is purchased to how it is created and distributed.

Some see it as an opportunity, some as a demolition of the long-standing utility industry. It’s probably both. But if that long-standing utility model has been part of what has created climate change- then changing how it works is not just a good idea, it’s imperative, and where our own power for change lies.