1. the future of the energy industry, (3) measure the
steps utility companies are taking to prepare for
the future, and (4) gauge perceptions about the
Obama administration’s impact on the industry.
Based on the study data, the key findings are
revealed below.
Key Findings
I Eighty percent of the survey respondents
said they are not satisfied with the Obama
administration’s performance in the area of
energy policy over the last year.
I The five most critical issues facing the energy
industry today are regulation, the environment,
technology, finance and end users.
Eight out of ten North American utility executives
are not satisfied with President Obama’s first-year
performance on energy issues, according to a new
utility industry survey. Findings also reveal that
executives believe the industry’s greatest challenges
are uncertain legislation, the environment,
incorporating new technology, finance and variable
consumer demand.
Although these are similar to the issues that the
executives have identified in the past several years
of the study, the latest Platts/Capgemini Utilities
Executive Study finds that because of their
continued uncertainty about the global economy,
the executives are more focused than ever before
on meeting the challenges.
Completed in March 2010, the study of over 100
senior utility executives from the North American
electric and natural gas industry was developed by
Platts and Capgemini to (1) identify and prioritize
current industry trends, (2) assess opinions about
Platts/Capgemini
Utilities Executive Study
Executive Summary
2009/2010
2. of respondents
have a smart
grid strategy in place now,
and 52 percent said one is
under development. Over
two-thirds of participants
also said they expect their
smart grid strategies will
change over the next five
years as a result of evolving
technologies.
2
I Over the past year, executives
increased their focus on
regulation, the environment
and technology. In the coming
year, they expect their attention
to increase especially around
governmental/regulatory affairs.
I Most utility executives
anticipate an increase in
electricity prices for end users,
as well as increasing
environmental regulation over
the next five years to 10 years.
I Nearly half (45 percent) of
respondents have a smart grid
strategy in place now, and 52
percent said one is under
development. Over two-thirds
of participants also said they
expect their smart grid
strategies will change over the
next five years as a result of
evolving technologies.
I Over one third of the industry
currently reports having full
implementation of smart meters
(37 percent) and AMI
technology (35 percent). The
leading focus within smart grid
projects surrounds upgrading
security and the deployment of
Intelligent Electronic Devices
(IEDs).
I Executives predict an increase
in wind, solar, and biomass in
the overall fuel mix within the
next one year to two years.
I Over the next two years,
executives anticipate an
increase in focus in the areas
of government/regulatory
affairs, customer self-service,
risk management, customer
satisfaction and capital
expenditures.
The Obama Administration:
The First Year
Industry leaders indicated
dissatisfaction with the Obama
administration’s accomplishments
on energy policy over the past year.
Their frustration focuses on the
amount of discussion relative to
tangible and actionable solutions.
Few see the current solutions as
being satisfactory, either in scale
or feasibility. However, utility
executives did note that the
administration has succeeded in
stimulating conversation about the
energy industry in general and
sustainable solutions in particular.
They also cited the administration’s
stimulus package as a positive
accomplishment.
Top Five Industry Issues
Regulatory Uncertainty
Continues to Keep the Utility
Industry Up At Night
Executives cite uncertainty,
specifically around emissions and
carbon regulation, as the leading
issue within current regulation
concerns (75 percent of the
respondents rate the issue as either
a 9 or 10 on a 10-point scale where
10 means “Very Important” and
1 means “Not At All Important”).
Following this are concerns around
the lack of an adequate national
energy policy (52 percent) and
uncertainty about transmission
regulation (50 percent).
Concerns around the Environment
Remain of High Importance
Focus on the environment
continues to be a leading issue for
utility executives, as it has been a
concern throughout the history of
this study. Executives said building
new generation and transmission
for renewables, along with
increasing energy efficiency and
conservation programs, are the
leading current issues, (42 percent
of the respondents rate both issues
as either a 9 or 10).
Incorporation of Technology
is a Priority
The importance of incorporating
technology into utility business
operations is a leading concern for
executives. Focus on these key
current industry issues centers
around automated metering
infrastructure (47 percent rating
9 or 10), smart grid technology
(43 percent) and smart meters
(42 percent). Most participants
said their organization either has
a smart grid strategy in place (45
percent) or is currently developing
a strategy (52 percent). Over a
third of participating companies
have full implementation of smart
meters (37 percent) and AMI
systems (35 percent).
45%
3. Executive Summary
2009/2010Over a third of the industry has
already implemented smart meters
(37 percent) or AMI (35 percent).
Of the participating organizations,
33 percent indicated they are
in partial implementation of
additional back office systems.
Future Industry Issues:
Leaders’ Pedictions
Utility executives offered varied
points of view about the future of
the energy industry. Based on their
feedback, there will be an increase
in electricity prices for end users
(70 percent rating 9 or 10),
increasing environmental regulation
(63 percent), and increased
implementation of AMI/AMR
technology (51 percent).
Yet, only 12 percent of responding
executives expressed the belief that
there will be greater collaboration
among utility industry leaders over
the next five years to 10 years.
The study was conducted in two
phases. Phase I was qualitative and
consisted of in-depth telephone
interviews. Data for the quantitative
Phase II was collected via online
survey. A report is available
summarizing the findings for both
Phase I and Phase II. To download
the full study results go to:
www.us.capgemini.com/Platts
Study
The Financial Picture –
Still Challenging
As North America continues to
climb out of the recent economic
downturn, utility executives cite
financial concerns focusing on
cost recovery (60 percent rating
9 or 10), access to capital (52
percent) and maintaining liquidity
(48 percent) as the leading
current financial issues.
End Users – Providing Satisfactory
Service for Cost and ‘Green’ Energy
In their responses about end-user
issues, the executives were most
concerned with maintaining
customer satisfaction (64 percent
rating 9 or 10), providing
consumer education about the
cost of ‘green’ energy (48 percent)
and end user’s expectations for
continued low energy costs (42
percent).
Smart Grid Technology
As the majority of the surveyed
executives incorporate smart grid
technology into their businesses,
their focus on specific smart grid
projects is most notably on
upgrading security (29 percent rate
this as a top issue) or deployment
of/upgrade to IEDs (27 percent).
Also receiving high priority
rankings are upgrading back office
systems and demand response
(both 17 percent). Over half of
executives indicated that distributed
generation is a lower-level smart-
grid priority (57 percent rating it
as a 6 or below in importance).
Platts/Capgemini Utilities Executive Study 3
Q4: Do you have a smart grid strategy?
Status of Smart Grid Strategy Expect Smart Grid Strategy to Change
Q5: Will your smart grid strategy change
over the next 5 years?
Yes
Don’t
know
No
Strategy under
development
Strategy
in place
No plans to
develop strategy
