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| Andy Tannen |
Is anyone tired of the daily drumbeat of media coverage about ChatGPT and generative AI (685 million Google Search results as of this writing)? Just after the product launch late last year, Bill Gates declared this technology to be potentially more important than the creation of the Internet and smart phones. PR firms are, appropriately, racing to use the technology and burnish their AI credentials in this rapidly changing new world.
Generative AI may change the world, but what about saving it? For that, we will have to depend on “unexciting” electric utilities, described for decades in the investment world as “widow and orphan” stocks (meaning their shares offer slow, predictable growth with dividends and little risk).
In March, the Intergovernmental Panel on Climate Change issued its sobering sixth report that found at our current rate of carbon emissions, the planet could surpass the critical 1.5 degree Celsius temperature increase above pre-industrial levels by 2035, triggering more floods, heat waves and droughts, as well as causing more crop failures and wildfires. It was largely a one-day story. Who is going to save us from this potential catastrophe? Electric utilities.
We know all about electric cars (EVs); soon everyone will be plugging their cars, SUVs and small trucks into the utility grid. EVs represent only ten percent of cars sold in the U.S. so far, so their growth will require vastly more electricity from utilities. And what about buildings, which generate about eight percent of carbon emissions? Buildings, including homes, are turning to electricity to replace fossil fuels for heating and cooking. New York just banned all new buildings, starting in 2026, from being powered by fossil fuels, the first state to do so. Electric air taxis are coming soon (probably 2025) to transport people across and between cities. The electrification of everything is underway.
Utilities are rushing to transition from burning coal and natural gas to using renewable energy, but they can’t plug in every solar or wind farm immediately. Traditional utility grids were built to be powered by fossil fuels which provide steady power output. Renewable energy sources provide fluctuating power—which in some cases, causes grid destabilization and can lead to supply interruptions if not managed properly.
So here’s the surprise: The electric utility industry is innovating in multiple ways. New, smaller companies are providing advanced software and cloud services to help utilities better manage the power flow from renewable energy sources, which are expected to become the leading source of the world’s electricity by 2025.
Utility innovation is happening across borders. Quebec, for example, produces a huge amount of clean hydropower. Industry attempts were made in the 2010-2014 period to import some of that excess electricity to New England, but the plan for building massive transmission towers and lines was vetoed by New Hampshire residents, who understandably did not want to see their landscape tarnished. Late last year, a similar project started construction to bring Quebec hydropower to New York City but it will use underwater (Lake Champlain) and underground cables to bring the power south. That’s innovation.
Sure, it’s cool to promote AI chatbots that will change everything. But if you want to help save the planet, promote electric utilities. Saving the world is as important as changing it.
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Andy Tannen is president of Tannen Corporate Communications, a corporate reputation consultancy. Previously, he worked in corporate communications at Publicis Groupe's MSL for 28 years, with clients such as IBM, United Technologies, Roche, Honeywell, BP and many other companies. He does not represent the utility industry or work with any utilities.
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May 31, 2023, by Bill Huey
If your average investor-owned utility weren’t subsidized by ratepayers and guaranteed an annual ROI by regulators, it would probably fail.
Never a hotbed of creative thinking, utilities are more standing in the way of progress than making it.