Your utility is about to get a makeover. Here's why.

President Obama's Clean Power Plan will nudge the utility industry to shift its operating model for the first time in nearly a century, writes Opower's Alex Laskey.

Jim Cole/AP/File
In this Jan. 20, 2015 file photo, a plume of steam billows from the coal-fired Merrimack Station in Bow, N.H.

By now, the energy community has had a chance to take a hard look at President Obama’s long-awaited Clean Power Plan, which he unveiled to a crowd of scientists, business leaders, and policymakers in the East Room of the White House last month.

The final rule is 1,560 pages long, but its intent is simple: to set carbon pollution standards for existing power plants in each state, offer a broad menu of options to meet those standards, then get out of the way. The Environmental Protection Agency estimates that the Clean Power Plan will reduce power plant emissions 32 percent overall by 2030.

Much has already been written about the politics of the rule, which are unfolding predictably. What’s drawn less attention — but will ultimately be far more consequential — is how the Clean Power Plan will nudge the utility industry, a sleeping giant worth $2.2 trillion globally, to shift its operating model for the first time in nearly a century.

Here’s how:

Utilities will bring fringe energy technologies into the mainstream

One way utilities can comply with new carbon standards is to replace fossil fuel power plants with renewable energy. The Clean Power Plan even incentivizes it.

That means we’ll see utilities building large-scale wind farms and solar arrays, particularly as they get cheaper to manufacture. Others will launch community solar projects, where their customers can buy a stake in a solar farm. Some utilities will even offer to set up rooftop panels — either by themselves, or through partnerships with solar installers.

As the power grid becomes increasingly dependent on variable energy sources like wind and solar, utilities will also have a reason to invest in battery technologies, which will allow them to store up power when it’s abundant and release it when it’s not.

Of course, for a lot of power companies, the most cost-effective way to lower carbon emissions won’t be to build clean energy or buy energy storage; it will be to reduce demand for energy in the first place. That used to be a matter of incentivizing customers to buy more energy-efficient hardware. But now that CFLs and Energy Star appliances are ubiquitous, utilities are increasingly focused on changing people’s behavior — using data analytics to help homes and businesses understand their energy use, and motivating them to use less.

The relationship between utilities and consumers will change

What that amounts to is a new relationship between utilities and the people they serve. With technologies like energy reporting and community solar, power companies will increasingly see their customers as partners in hitting regulatory targets, including the Clean Power Plan.

Consumers are on board. Most of us already expect personalized offers and insights from our service providers; think overage alerts from phone companies, and online budgeting tools from banks. The larger trend is that we want control and customization. And it’s true for energy. Volumes of market research show that we want our power companies to let us choose how we use energy, and how much we use, and where it comes from.

Utilities are investing in technologies to give us that choice. They’re also restructuring accordingly. When I founded Opower in 2007, just one utility in America had a Chief Customer Officer. At an event I hosted earlier this year, there were 26 utility CCOs in the audience. Worldwide, utilities are starting to reposition themselves as energy advisors — trusted sources of information and services, rather than electrons alone.

The Clean Power Plan will kick utility innovation into gear

That transition is about more than regulatory compliance. It’s also about revenue. In an era when utilities are increasingly incentivized to sell less electricity, they’ll need to find creative ways to turn a profit.

The answer might be selling solar services. Or storage. Or more efficient appliances. Or charging stations for electric cars. Or data analytics. Each utility’s strategy will be a little different, depending on its state’s energy laws and its energy mix. What will unite almost all utilities is that for the first time in history, Americans won’t be buying and using electricity the same way their parents did.

That’s the real power of the Clean Power Plan. Yes, it will lower carbon emissions, but it will also push energy companies to innovate. They’ll need to keep investing in new technologies. They’ll need to retool their business models for a century where the old way of doing things no longer makes sense. The long-term benefits will be bigger and better than any one rule could accomplish.

Put another way: there are things that exacerbate climate change, and there are things that mitigate it. Most of us put utilities on the bad side of the equation.

It might not be that way for long.

Alex Laskey is president and cofounder of Opower, a Virginia-based company that makes cloud-based software for the utility industry. 

[Editor's note: A previous version of this article incorrectly stated that the finalized Clean Power Plan was unveiled "earlier this month." It was unveiled in August, not September.]

You've read  of  free articles. Subscribe to continue.

Dear Reader,

About a year ago, I happened upon this statement about the Monitor in the Harvard Business Review – under the charming heading of “do things that don’t interest you”:

“Many things that end up” being meaningful, writes social scientist Joseph Grenny, “have come from conference workshops, articles, or online videos that began as a chore and ended with an insight. My work in Kenya, for example, was heavily influenced by a Christian Science Monitor article I had forced myself to read 10 years earlier. Sometimes, we call things ‘boring’ simply because they lie outside the box we are currently in.”

If you were to come up with a punchline to a joke about the Monitor, that would probably be it. We’re seen as being global, fair, insightful, and perhaps a bit too earnest. We’re the bran muffin of journalism.

But you know what? We change lives. And I’m going to argue that we change lives precisely because we force open that too-small box that most human beings think they live in.

The Monitor is a peculiar little publication that’s hard for the world to figure out. We’re run by a church, but we’re not only for church members and we’re not about converting people. We’re known as being fair even as the world becomes as polarized as at any time since the newspaper’s founding in 1908.

We have a mission beyond circulation, we want to bridge divides. We’re about kicking down the door of thought everywhere and saying, “You are bigger and more capable than you realize. And we can prove it.”

If you’re looking for bran muffin journalism, you can subscribe to the Monitor for $15. You’ll get the Monitor Weekly magazine, the Monitor Daily email, and unlimited access to

QR Code to Your utility is about to get a makeover. Here's why.
Read this article in
QR Code to Subscription page
Start your subscription today