Algonquin Power & Utilities Corp. Completes Acquisition of The Empire District Electric Company


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Algonquin Power & Utilities Empire acquisition expands Liberty Utilities' regulated footprint in U.S., adds Empire District Electric, increases 2,500 MW capacity, boosts dividend growth prospects, and delivers accretive cash flows in a Cdn$3.2 billion merger.

 

Key Points

A Cdn$3.2 billion Liberty Utilities deal to acquire Empire District Electric, expanding U.S. regulated operations.

✅ Purchase price Cdn$3.2B incl. US$0.8B debt; US$34 per share

✅ Empire delisted from NYSE; now a Liberty Utilities subsidiary

✅ Deal adds scale, 2,500 MW capacity, supports 10% dividend growth

 

Algonquin Power & Utilities Corp. announced today that a subsidiary of Liberty Utilities Co. ("Liberty Utilities"), APUC's wholly-owned regulated utility business, successfully completed its acquisition of The Empire District Electric Company ("Empire"), amid the Hydro One-Avista backlash around U.S. utility takeovers, for an aggregate purchase price of approximately Cdn$3.2 billion (the "Transaction"). Empire is now a wholly-owned subsidiary of Liberty Utilities and will cease to be a publicly-held corporation.

With the closing of the Transaction, APUC has materially expanded its utility operations in the United States. APUC, through its 2,200 employees, now serves over 782,000 electric, gas, and water customers within its regulated utility business, and APUC's portfolio of power generating facilities now contains both regulated and non-regulated power facilities, as peers such as Duke Energy's renewables push indicate across the sector, with a total capacity of over 2,500 MW.

"Empire is highly complementary to the scope of our current operations, brings valuable scale to our existing utility business, and adds further support to our annual dividend growth target of 10% through significant accretion to per share cash flows and earnings," said Ian Robertson, Chief Executive Officer of APUC. "The APUC and Empire teams have worked diligently to successfully bring our companies together, and we are excited about the many opportunities that our newly expanded platform brings to our growth prospects in North America, where outcomes like the CPUC ruling favoring community energy are reshaping markets."

As previously announced, and in a landscape where Hydro One-Avista deal rejected highlighted regulatory risk, Empire's shareholders will receive US$34.00 per common share which, including the assumption of approximately US$0.8 billion of debt at closing, represents an aggregate purchase price of approximately US$2.3 billion (Cdn$3.2 billion).

As a result of the closing, Empire's common stock is being delisted from the New York Stock Exchange. Empire shareholders will be provided with instructions on how to receive the merger consideration for their shares by Wells Fargo, in its capacity as paying agent for the transaction, even as proceedings like El Paso Electric's 2017 Texas rate case continue to draw attention.

APUC will issue shortly a final instalment notice (the "Final Instalment Notice") notifying holders of its 5% convertible unsecured subordinated debentures ("Debentures") represented by instalment receipts of the date for payment of the final instalment (the "Final Instalment Date"), which shall not be less than 15 days nor more than 90 days following the date of such notice in accordance with the terms of the instalment receipts. Additional details will be set out in the Final Instalment Notice regarding, among other things, the right of holders of Debentures who have paid the final instalment to receive a make-whole payment and to convert their Debentures into APUC common shares.

 

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New Rules for a Future Puerto Rico Microgrid Landscape

Puerto Rico Microgrid Regulations outline renewable energy, CHP, and storage standards, enabling islanded systems, PREPA interconnection, excess energy sales, and IRP alignment to boost resilience, distributed resources, and community power across the recovering grid.

 

Key Points

Rules defining microgrids, requiring 75 percent renewables or CHP, and setting interconnection and PREPA fee frameworks.

✅ 75 percent renewables or CHP; hybrids allowed

✅ Registration, engineer inspection, and annual generation reports

✅ PREPA interconnection fees; excess energy sales permitted

 

The Puerto Rico Energy Commission unveiled 29 pages of proposed regulations last week for future microgrid installations on the island.

The regulations, which are now open for 30 days of public comment, synthesized pages of responses received after a November 10 call for recommendations. Commission chair José Román Morales said it’s the most interest the not-yet four-year-old commission has received during a public rulemaking process.

The goal was to sketch a clearer outline for a tricky-to-define concept -- the term "microgrid" can refer to many types of generation islanded from the central grid -- as climate pressures on the U.S. grid mount and more developers eye installations on the recovering island.

“There’s not a standard definition of what a microgrid is, not even on the mainland,” said Román Morales.

According to the commission's regulation, “a microgrid shall consist, at a minimum, of generation assets, loads and distribution infrastructure. Microgrids shall include sufficient generation, storage assets and advanced distribution technologies, including advanced inverters, to serve load under normal operating and usage conditions.”

All microgrids must be renewable (with at least 75 percent of power from clean energy), combined heat and power (CHP) or hybrid CHP-and-renewable systems. The regulation applies to microgrids controlled and owned by individuals, customer cooperatives, nonprofit and for-profit companies, and cities, but not those owned by the Puerto Rico Electric Power Authority (PREPA). Owners must submit a registration application for approval, including a certification of inspection from a licensed electric engineer, and an annual fuel, generation and sales report that details generation and fuel source, as well as any change in the number of customers served.

Microgrids, like the SDG&E microgrid in Ramona in California, can interconnect with the PREPA system, but if a microgrid will use PREPA infrastructure, owners will incur a monthly fee. That amounts to $25 per customer up to a cap of $250 per month for small cooperative microgrids. The cost for larger systems is calculated using a separate, more complex equation. Operators can also sell excess energy back to PREPA.

 

Big goals for the island's future grid

In total, 53 groups and companies, including Sunnova, AES, the Puerto Rico Solar Energy Industries Association (PR-SEIA), the Advanced Energy Management Alliance (AEMA), and the New York Smart Grid Consortium, submitted their thoughts about microgrids or, in many cases, broader goals for the island’s future energy system. It was a quick turnaround: The Puerto Rico Energy Commission offered a window of just 10 days to submit advice, although the commission continued to accept comments after the deadline.

“PREC wanted the input as fast as possible because of the urgency,” said AES CEO Chris Shelton.

AES’ plan includes a network of “mini-grids” that could range in size from several megawatts to one large enough to service the entire city of San Juan.

“The idea is, you connect those to each other with transmission so they can have a co-optimized portfolio effect and lower the overall cost,” said Shelton. “But they would be largely autonomous in a situation where the tie-lines between them were broken.”

According to estimates provided in AES’ filing, utility-scale solar installations over 50 megawatts on the island could cost between $40 and $50 per megawatt-hour. Those prices make solar located near load centers an economic alternative to the island’s fossil-fuel generating plants. The utility’s analysis showed that a 10,000-megawatt solar system could replace 12,000 gigawatt-hours of fossil generation, with 25 gigawatt-hours of battery storage leveling out load throughout the day. Puerto Rico’s peak load is 3,000 megawatts.

In other filings, PR-SEIA urged a restructuring of FEMA funds so they’re available for microgrid development. GridWise Alliance wrote that plans should consider cybersecurity, and AEMA recommended the commission develop an integrated resource plan (IRP) that includes distributed energy resources, microgrids and non-wires alternatives.

 

An air of optimism, though 1.5 million are still without power

After the commission completes the microgrid rulemaking, a new IRP is next on the commission’s to-do list. PREPA must file that plan in July, and regulators are working furiously to make sure it incorporates the recent flood of rebuilding recommendations from the energy industry.

Though the commission has the final say when it comes to approval of the plan, PREPA will lead the IRP process. The utility’s newly formed Transformation Advisory Council (TAC), a group of 11 energy experts, will contribute.

With that group, along with New York’s Resiliency Working Group, lessons from California's grid transition, the Energy Commission, the utility itself, and the dozens of other clean energy experts and entrepreneurs who want to offer their two cents, the energy planning process has a lot of moving parts. But according to Julia Hamm, CEO of the Smart Electric Power Alliance and a member of both the Energy Resiliency Working Group and the TAC, those working to establish standards for Puerto Rico’s future are hitting their stride.

“Certainly over the past three months, it has been a bit of a challenge to ensure that everybody has been coordinating efforts. Just over the past couple of weeks, we’ve seen some good progress on that front. We’re starting to see a lot more communication,” she said, adding that an air of optimism has settled on the process. “The key stakeholders all have a very common vision for Puerto Rico when it comes to the power sector.”

Nisha Desai, a PREPA board member who is liaising with the TAC, affirmed that collaborators are on the same page. “Everyone is violently in agreement that the future of Puerto Rico involves renewables, microgrids and distributed generation,” she said.

The TAC will hold its first in-person meeting in mid-January, and has already consulted with the utility on its formal fiscal plan submission, due January 10.

Though many taking part in the process feel the once-harried recovery is beginning to adopt a more organized approach, Desai acknowledges that “there are a lot of people in Puerto Rico who feel forgotten.”

Puerto Rico’s current generation sits at just 72.6 percent, in a nation facing longer, more frequent outages due to extreme weather. The government recently offered its first estimate that about half the island, 1.5 million residents, remains without power.

In late December and into January, 1,500 more crewmembers from 18 utilities in states as far flung as Minnesota, Missouri and Arizona will land on the island to aid further restoration through mutual aid agreements.

“The system is getting up to speed, getting to 100 percent, but there’s still some instability,” said Román Morales. “Right now it’s a matter of time.”

 

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A Snapshot of the US Market for Smart Solar Inverters

Smart solar inverters anchor DER communications and control, meeting IEEE 1547 and California Rule 21 for volt/VAR, reactive power, and ride-through, expanding hosting capacity and enabling grid services via secure real-time telemetry and commands.

 

Key Points

Smart solar inverters use IEEE 1547, volt/VAR and reactive power to stabilize circuits and integrate DER safely.

✅ Meet IEEE 1547, Rule 21 ride-through and volt/VAR functions

✅ Support reactive power to manage voltage and hosting capacity

✅ Enable utility communications, telemetry, and grid services

 

Advanced solar inverters could be one of the biggest distributed energy resource communications and control points out there someday. With California now requiring at least early-stage “smart” capabilities from all new solar projects — and a standards road map for next-stage efforts like real-time communications and active controls — this future now has a template.

There are still a lot of unanswered questions about how smart inverters will be used.

That was the consensus at Intersolar this week, where experts discussed the latest developments on the U.S. smart solar inverter front. After years of pilot projects, multi-stakeholder technical working groups, and slow and steady standards development, solar smart inverters are finally starting to hit the market en masse — even if it’s not yet clear just what will be done with them once they’re installed.

“From the technical perspective, the standards are firm,” Roger Salas, distribution engineering manager for Southern California Edison, said. In September of last year, his utility started requiring that all new solar installations come with “Phase 1" advanced inverter functionality, as defined under the state’s Rule 21.

Later this month, it’s going to start requiring “reactive power priority” for these inverters, and in February 2019, it’s going to start requiring that inverters support the communications capabilities described in “Phase 2,” as well as some more advanced “Phase 3” capabilities.

 

Increasing hosting capacity: A win-win for solar and utilities

Each of these phases aligns with a different value proposition for smart inverters. The first phase is largely preventative, aimed at solving the kinds of problems that have forced costly upgrades to how inverters operate in solar-heavy Germany and Hawaii.

The key standard in question in the U.S. is IEEE 1547, which sets the rules for what grid-connected DERs must do to stay safe, such as trip offline when the grid goes down, or avoid overloading local transformers or circuits.

The old version of the standard, however, had a lot of restrictive rules on tripping off during relatively common voltage excursions, which could cause real problems on circuits with a lot of solar dropping off all at once.

Phase 1 implementation of IEEE 1547 is all about removing these barriers, Salas said. “They need to be stable, they need to be connected, they need to be able to support the grid.”

This should increase hosting capacity on circuits that would have otherwise been constrained by these unwelcome behaviors, he said.

 

Reactive power: Where utility and solar imperatives collide

The old versions of IEEE 1547 also didn’t provide rules for how inverters could use one of their more flexible capabilities: the ability to inject or absorb reactive power to mitigate voltage fluctuations, including those that may be caused by the PV itself. The new version opens up this capability, which could allow for an active application of reactive power to further increase hosting capacity, as well as solve other grid edge challenges for utilities.

But where utilities see opportunity, the solar industry sees a threat. Every unit of reactive power comes at the cost of a reduction in the real power output of solar inverters — and almost every solar installation out there is paid based on the real power it produces.

“If you’re tasked to do things that rob your energy sales, that will reduce compensation,” noted Ric O'Connell, executive director of the Oakland, Calif.-based GridLab. “And a lot of systems have third-party owners — the Sunruns, the Teslas — with growing Powerwall fleets — that have contracts, performance guarantees, and they want to get those financed. It’s harder to do that if there’s uncertainty in the future with curtailment."

“That’s the bottleneck right now,” said Daniel Munoz-Alvarez, a GTM Research grid edge analyst. “As we develop markets on the retail end for ...volt/VAR control to be compensated on the grid edge and that is compensated back to the customer, then the customer will be more willing to allow the utility to control their smart inverters or to allow some automation.”

But first, he said, “We need some agreed-upon functions.”

 

The future: Communications, controls and DER integration

The next stage of smart inverter functionality is establishing communications with the utility. After that, utilities will be able use them to monitor key DER data, or issue disconnect and reconnect commands in emergencies, as well as actively orchestrate other utility devices and systems through emerging virtual power plant strategies across their service areas.

This last area is where Salas sees the greatest opportunity to putting mass-market smart solar inverters to use. “If you want to maximize the DERs and what they can do, the need information from the grid. And DERs provide operational and capability information to the utility.”

Inverter makers have already been forced by California to enable the latest IEEE 1547 capabilities into their existing controls systems — but they are clearly embracing the role that their devices can play on the grid as well. Microinverter maker Enphase leveraged its work in Hawaii into a grid services business, seeking to provide data to utilities where they already had a significant number of installations. While Enphase has since scaled back dramatically, its main rival SolarEdge has taken up the same challenge, launching its own grid services arm earlier this summer.

Inverters have been technically capable of doing most of these things for a long time. But utilities and regulators have been waiting for the completion of IEEE 1547 to move forward decisively. Patrick Dalton, senior engineer for Xcel Energy, said his company’s utilities in Colorado and Minnesota are still several years away from mandating advanced inverter capabilities and are waiting for California’s energy transition example in order to choose a path forward.

In the meantime, it’s possible that Xcel's front-of-meter volt/VAR optimization investments in Colorado, including grid edge devices from startup Varentec, could solve many of the issues that have been addressed by smart inverter efforts in Hawaii and California, he noted.

The broader landscape for rolling out smart inverters for solar installations hasn’t changed much, with Hawaii and California still out ahead of the pack, while territories such as Puerto Rico microgrid rules evolve to support resilience. Arizona is the next most important state, with a high penetration of distributed solar, a contentious policy climate surrounding its proper treatment in future years, and a big smart inverter pilot from utility Arizona Public Service to inform stakeholders.

All told, eight separate smart inverter pilots are underway across eight states at present, according to GTM Research: Pacific Gas & Electric and San Diego Gas & Electric in California; APS and Salt River Project in Arizona; Hawaiian Electric in Hawaii; Duke Energy in North Carolina; Con Edison in New York; and a three-state pilot funded by the Department of Energy’s SunShot program and led by the Electric Power Research Institute.

 

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Russians hacked into US electric utilities: 6 essential reads

U.S. power grid cyberattacks expose critical infrastructure to Russian hackers, DHS warns, targeting SCADA, smart grid sensors, and utilities; NERC CIP defenses, microgrids, and resilience planning aim to mitigate outages and supply chain disruptions.

 

Key Points

U.S. power grid cyberattacks target utility control systems, risking outages, disruption, requiring stronger defenses.

✅ Russian access to utilities and SCADA raises outage risk

✅ NERC CIP, DHS, and utilities expand cyber defenses

✅ Microgrids and renewables enhance resilience, islanding capability

 

The U.S. Department of Homeland Security has revealed that Russian government hackers accessed control rooms at hundreds of U.S. electrical utility companies, gaining far more access to the operations of many more companies than previously disclosed by federal officials.

Securing the electrical grid, upon which is built almost the entirety of modern society, is a monumental challenge. Several experts have explained aspects of the task, potential solutions and the risks of failure for The Conversation:

 

1. What’s at stake?

The scale of disruption would depend, in part, on how much damage the attackers wanted to do. But a major cyberattack on the electricity grid could send surges through the grid, much as solar storms have done.

Those events, explains Rochester Institute of Technology space weather scholar Roger Dube, cause power surges, damaging transmission equipment. One solar storm in March 1989, he writes, left “6 million people without power for nine hours … [and] destroyed a large transformer at a New Jersey nuclear plant. Even though a spare transformer was nearby, it still took six months to remove and replace the melted unit.”

More serious attacks, like larger solar storms, could knock out manufacturing plants that build replacement electrical equipment, gas pumps to fuel trucks to deliver the material and even “the machinery that extracts oil from the ground and refines it into usable fuel. … Even systems that seem non-technological, like public water supplies, would shut down: Their pumps and purification systems need electricity.”

In the most severe cases, with fuel-starved transportation stalled and other basic infrastructure not working, “[p]eople in developed countries would find themselves with no running water, no sewage systems, no refrigerated food, and no way to get any food or other necessities transported from far away. People in places with more basic economies would also be without needed supplies from afar.”

 

2. It wouldn’t be the first time

Russia has penetrated other countries’ electricity grids in the past, and used its access to do real damage. In the middle of winter 2015, for instance, a Russian cyberattack shut off the power to Ukraine’s capital in the middle of winter 2015.

Power grid scholar Michael McElfresh at Santa Clara University discusses what happened to cause hundreds of thousands of Ukrainians to lose power for several hours, and notes that U.S. utilities use software similar to their Ukrainian counterparts – and therefore share the same vulnerabilities.

 

3. Security work is ongoing

These threats aren’t new, write grid security experts Manimaran Govindarasu from Iowa State and Adam Hahn from Washington State University. There are a lot of people planning defenses, including the U.S. government, as substation attacks are growing across the country. And the “North American Electric Reliability Corporation, which oversees the grid in the U.S. and Canada, has rules … for how electric companies must protect the power grid both physically and electronically.” The group holds training exercises in which utility companies practice responding to attacks.

 

4. There are more vulnerabilities now

Grid researcher McElfresh also explains that the grid is increasingly complex, with with thousands of companies responsible for different aspects of generating, transmission, and delivery to customers. In addition, new technologies have led companies to incorporate more sensors and other “smart grid” technologies. He describes how that, as a recent power grid report card underscores, “has created many more access points for penetrating into the grid computer systems.”

 

5. It’s time to ramp up efforts

The depth of access and potential control over electrical systems means there has never been a better time than right now to step up grid security amid a renewed focus on protecting the grid among policymakers and utilities, writes public-utility researcher Theodore Kury at the University of Florida. He notes that many of those efforts may also help protect the grid from storm damage and other disasters.

 

6. A possible solution could be smaller grids

One protective effort was identified by electrical engineer Joshua Pearce at Michigan Technological University, who has studied ways to protect electricity supplies to U.S. military bases both within the country and abroad. He found that the Pentagon has already begun testing systems, as the military ramps up preparation for major grid hacks, that combine solar-panel arrays with large-capacity batteries. “The equipment is connected together – and to buildings it serves – in what is called a ‘microgrid,’ which is normally connected to the regular commercial power grid but can be disconnected and become self-sustaining when disaster strikes.”

He found that microgrid systems could make military bases more resilient in the face of cyberattacks, criminals or terrorists and natural disasters – and even help the military “generate all of its electricity from distributed renewable sources by 2025 … which would provide energy reliability and decrease costs, [and] largely eliminate a major group of very real threats to national security.”

 

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After rising for 100 years, electricity demand is flat. Utilities are freaking out.

US Electricity Demand Stagnation reflects decoupling from GDP as TVA's IRP revises outlook, with energy efficiency, distributed generation, renewables, and cheap natural gas undercutting coal, reshaping utility business models and accelerating grid modernization.

 

Key Points

US electricity demand stagnation is flat load growth driven by efficiency, DG, and decoupling from GDP.

✅ Flat sales pressure IOU profits and legacy baseload investments.

✅ Efficiency and rooftop solar reduce load growth and capacity needs.

✅ Utilities must pivot to services, DER orchestration, and grid software.

 

The US electricity sector is in a period of unprecedented change and turmoil, with emerging utility trends reshaping strategies across the industry today. Renewable energy prices are falling like crazy. Natural gas production continues its extraordinary surge. Coal, the golden child of the current administration, is headed down the tubes.

In all that bedlam, it’s easy to lose sight of an equally important (if less sexy) trend: Demand for electricity is stagnant.

Thanks to a combination of greater energy efficiency, outsourcing of heavy industry, and customers generating their own power on site, demand for utility power has been flat for 10 years, with COVID-19 electricity demand underscoring recent variability and long-run stagnation, and most forecasts expect it to stay that way. The die was cast around 1998, when GDP growth and electricity demand growth became “decoupled”:


 

This historic shift has wreaked havoc in the utility industry in ways large and small, visible and obscure. Some of that havoc is high-profile and headline-making, as in the recent requests from utilities (and attempts by the Trump administration) to bail out large coal and nuclear plants amid coal and nuclear industry disruptions affecting power markets and reliability.

Some of it, however, is unfolding in more obscure quarters. A great example recently popped up in Tennessee, where one utility is finding its 20-year forecasts rendered archaic almost as soon as they are released.

 

Falling demand has TVA moving up its planning process

Every five years, the Tennessee Valley Authority (TVA) — the federally owned regional planning agency that, among other things, supplies electricity to Tennessee and parts of surrounding states — develops an Integrated Resource Plan (IRP) meant to assess what it requires to meet customer needs for the next 20 years.

The last IRP, completed in 2015, anticipated that there would be no need for major new investment in baseload (coal, nuclear, and hydro) power plants; it foresaw that energy efficiency and distributed (customer-owned) energy generation would hold down demand.

Even so, TVA underestimated. Just three years later, the Times Free Press reports, “TVA now expects to sell 13 percent less power in 2027 than it did two decades earlier — the first sustained reversal in the growth of electricity usage in the 85-year history of TVA.”

TVA will sell less electricity in 10 years than it did 10 years ago. That is bonkers.

This startling shift in prospects has prompted the company to accelerate its schedule. It will now develop its next IRP a year early, in 2019.

Think for a moment about why a big utility like TVA (serving 9 million customers in seven states, with more than $11 billion in revenue) sets out to plan 20 years ahead. It is investing in extremely large and capital-intensive infrastructure like power plants and transmission lines, which cost billions of dollars and last for decades. These are not decisions to make lightly; the utility wants to be sure that they will still be needed, and will still pay off, for many years to come.

Now think for a moment about what it means for the electricity sector to be changing so fast that TVA’s projections are out of date three years after its last IRP, so much so that it needs to plunge back into the multimillion-dollar, year-long process of developing a new plan.

TVA wanted a plan for 20 years; the plan lasted three.

 

The utility business model is headed for a reckoning

TVA, as a government-owned, fully regulated utility, has only the goals of “low cost, informed risk, environmental responsibility, reliability, diversity of power and flexibility to meet changing market conditions,” as its planning manager told the Times Free Press. (Yes, that’s already a lot of goals!)

But investor-owned utilities (IOUs), which administer electricity for well over half of Americans, face another imperative: to make money for investors. They can’t make money selling electricity; monopoly regulations forbid it, raising questions about utility revenue models as marginal energy costs fall. Instead, they make money by earning a rate of return on investments in electrical power plants and infrastructure.

The problem is, with demand stagnant, there’s not much need for new hardware. And a drop in investment means a drop in profit. Unable to continue the steady growth that their investors have always counted on, IOUs are treading water, watching as revenues dry up

Utilities have been frantically adjusting to this new normal. The generation utilities that sell into wholesale electricity markets (also under pressure from falling power prices; thanks to natural gas and renewables, wholesale power prices are down 70 percent from 2007) have reacted by cutting costs and merging. The regulated utilities that administer local distribution grids have responded by increasing investments in those grids, including efforts to improve electricity reliability and resilience at lower cost.

But these are temporary, limited responses, not enough to stay in business in the face of long-term decline in demand. Ultimately, deeper reforms will be necessary.

As I have explained at length, the US utility sector was built around the presumption of perpetual growth. Utilities were envisioned as entities that would build the electricity infrastructure to safely and affordably meet ever-rising demand, which was seen as a fixed, external factor, outside utility control.

But demand is no longer rising. What the US needs now are utilities that can manage and accelerate that decline in demand, increasing efficiency as they shift to cleaner generation. The new electricity paradigm is to match flexible, diverse, low-carbon supply with (increasingly controllable) demand, through sophisticated real-time sensing and software.

That’s simply a different model than current utilities are designed for. To adapt, the utility business model must change. Utilities need newly defined responsibilities and new ways to make money, through services rather than new hardware. That kind of reform will require regulators, politicians, and risky experiments. Very few states — New York, California, Massachusetts, a few others — have consciously set off down that path.

 

Flat or declining demand is going to force the issue

Even if natural gas and renewables weren’t roiling the sector, the end of demand growth would eventually force utility reform.

To be clear: For both economic and environmental reasons, it is good that US power demand has decoupled from GDP growth. As long as we’re getting the energy services we need, we want overall demand to decline. It saves money, reduces pollution, and avoids the need for expensive infrastructure.

But the way we’ve set up utilities, they must fight that trend. Every time they are forced to invest in energy efficiency or make some allowance for distributed generation (and they must always be forced), demand for their product declines, and with it their justification to make new investments.

Only when the utility model fundamentally changes — when utilities begin to see themselves primarily as architects and managers of high-efficiency, low-emissions, multidirectional electricity systems rather than just investors in infrastructure growth — can utilities turn in earnest to the kind planning they need to be doing.

In a climate-aligned world, utilities would view the decoupling of power demand from GDP growth as cause for celebration, a sign of success. They would throw themselves into accelerating the trend.

Instead, utilities find themselves constantly surprised, caught flat-footed again and again by a trend they desperately want to believe is temporary. Unless we can collectively reorient utilities to pursue rather than fear current trends in electricity, they are headed for a grim reckoning.

 

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Ontario looks to build on electricity deal with Quebec

Ontario-Quebec Electricity Deal explores hydro imports, terawatt hours, electricity costs, greenhouse gas cuts, and baseload impacts, amid debates on Pickering nuclear operations and competitive procurement in Ontario's long-term energy planning.

 

Key Points

A proposed hydro import deal from Quebec, balancing costs, emissions, and reliability for Ontario electricity customers.

✅ Draft 20-year, 8 TWh offer reported by La Presse disputed

✅ Ontario seeks lower costs and GHG cuts versus alternatives

✅ Not a baseload replacement; Pickering closure not planned

 

Ontario is negotiating a possible energy swap agreement to buy electricity from Quebec, but the government is disputing a published report that it is preparing to sign a deal for enough electricity to power a city the size of Ottawa.

La Presse reported Tuesday that it obtained a copy of a draft, 20-year deal that says Ontario would buy eight terawatt hours a year from Quebec – about 6 per cent of Ontario’s consumption – whether the electricity is consumed or not.

Ontario Energy Minister Glenn Thibeault’s office said the province is in discussions to build on an agreement signed last year for Ontario to import up to two terawatt hours of electricity a year from Quebec.

 

But his office released a letter dated late last month to his Quebec counterpart, in which Mr. Thibeault said the offer extended in June was unacceptable because it would increase the average residential electricity bill by $30 a year.

“I am hopeful that your continued support and efforts will help to further discussions between our jurisdictions that could lead to an agreement that is in the best interest of both Ontario and Quebec,” Mr. Thibeault wrote July 27 to Pierre Arcand.

Ontario would prepare a “term sheet” for the next stage of discussions ahead of the two ministers meeting at the Energy and Mines Ministers Conference later this month in New Brunswick, Mr. Thibeault wrote.

Any future agreements with Quebec will have to provide a reduction in Ontario electricity rates compared with other alternatives and demonstrate measurable reductions in greenhouse gas emissions, he wrote.

Progressive Conservative Leader Patrick Brown said Ontario doesn’t need eight terawatt hours of additional power and suggested it means the Liberal government is considering closing power facilities such as the Pickering nuclear plant early.

A senior Energy Ministry official said that is not on the table. The government has said it intends to keep operating two units at Pickering until 2022, and the other four units until 2024.

Even if the Quebec offer had been accepted, the energy official said, that power wouldn’t have replaced any of Ontario’s baseload power because it couldn’t have been counted on 24 hours a day, 365 days a year.

The Society of Energy Professionals said Mr. Thibeault was right to reject the deal, but called on him to release the Long-Term Energy Plan – which was supposed to be out this spring – before continuing negotiations.

Some commentators have argued for broader reforms to address Ontario's hydro system challenges, urging policymakers to review all options as negotiations proceed.

The Ontario Energy Association said the reported deal would run counter to the government’s stated energy objectives amid concerns over electricity prices in the province.

“Ontarians will not get the benefit of competition to ensure it is the best of all possible options for the province, and companies who have invested in Ontario and have employees here will not get the opportunity to provide alternatives,” president and chief executive Vince Brescia said in a statement. “Competitive processes should be used for any new significant system capacity in Ontario.”

The Association of Power Producers of Ontario said it is concerned the government is even considering deals that would “threaten to undercut a competitive marketplace and long-term planning.”

“Ontario already has a surplus of energy, so it’s very difficult to see how this deal or any other sole-source deal with Quebec could benefit the province and its ratepayers,” association president and CEO David Butters said in a statement.

The Ontario Waterpower Association also said such a deal with Quebec would “present a significant challenge to continued investment in waterpower in Ontario.”

 

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Electric Utilities Plot Bullish Course for EV Charging Infrastructure

EV Charging Infrastructure Incentives are expanding as utilities fund public chargers, Level 2 networks, DC fast charging, grid-managed off-peak programs, and equitable access across Ohio, New Jersey, and Florida to accelerate clean transportation.

 

Key Points

Utility-backed programs funding Level 2 and DC fast chargers, managing grid demand, and expanding EV equity.

✅ Incentives for Level 2 and DC fast public charging stations.

✅ Grid-friendly off-peak charging to balance demand.

✅ Equity targets place chargers in low-income communities.

 

Electric providers in Florida, Ohio and New Jersey recently announced plans to expand electric vehicle charging networks and infrastructure through various incentive programs that could add thousands of new public chargers in the next several years.

Elsewhere, utilities are advancing similar efforts, with Michigan EV programs proposing more than $20 million for charging infrastructure to accelerate adoption.

American Electric Power in Ohio will offer nearly $10 million in incentives toward the build out of 375 EV charging stations throughout the company's service territory, which largely includes Columbus.

Meanwhile, the Public Service Electric and Gas Company (PSE&G), an electric utility provider in New Jersey, has proposed a six-year plan to support the development of nearly 40,000 electric vehicle chargers across a wide range of customers and sectors, said Francis Sullivan, a spokesperson for PSE&G.

And Duke Energy in Florida is installing up to 530 EV charging stations across its service area, as part of its Park and Plug pilot program, which will be making the charging ports available in multifamily housing complexes, workplaces and other high traffic areas.

"We are bringing cleaner energy to Florida through 700 megawatts of new universal solar, and we are helping our customers to bring clean transportation to the state as well," Catherine Stempien, Duke Energy Florida president, said in a statement. "We are committed to providing smarter, cleaner energy alternatives for all our customers."

The project in Ohio is making incentive funding available to government organizations, multifamily housing developments and workplaces, covering from 50 percent to all of the costs. The plan, to be rolled out in the next four years, aims to incentivize the development of 300 level-two chargers and 75 "fast chargers" capable of charging a car's battery in minutes rather than hours.

"I think what's interesting about what we're seeing now in the industry is that electric vehicles and electric vehicle charging are expanding beyond California, and like other Pacific Coast states," said Scott Fisher, vice president of marketing at Greenlots, maker of car chargers and software. Greenlots has been selected as one of the companies to provide the chargers for the AEP project.

California has occupied the lion's share of the electric vehicle market, making up about 5 percent of the cars on the state's highways. The U.S. market sits at about 1.5 percent. However, indications show the EV boom may be set to take off as more models are being rolled out, and prices are making the electric cars more competitive with their gas-powered counterparts. The group Securing America's Future Energy (SAFE) announced the one-millionth electric vehicle is on course to be sold in the United States this month.

In a statement, Ben Prochazka, vice president of the Electrification Coalition, an EV advocacy group, called this "a major milestone and brings us one step closer to reducing our transportation system's dependence on oil. This is a direct result of the tireless efforts by communities and advocates throughout the 'EV ecosystem.'"

In New Jersey, PSE&G's efforts -- which are part of the company's proposed Clean Energy Future program -- will not only focus on building out the charging infrastructure, but structure car recharging to control charging and encourage residents to charge their cars during off-peak times.

"For now, with a modest number of charging stations in the market, it's not a huge problem. But over time, as you're putting in many thousands of these stations, what you want to make sure is that those stations are operating in sync with state power grids, where you don't have people all charging at the same time at like 5 p.m. on a hot summer day," said Fisher.

PSE&G also plans to offer incentives to encourage the development of level-two chargers and DC fast-chargers, as well as "provide grants and incentives for 100 electric school buses and EV charging infrastructure at school districts in PSE&G's service territory," said Sullivan.

"PSE&G will also help fund electrification projects at customer locations such as ports, airports and transit facilities," Sullivan added, via email.

Utilities and transportation planners are also keeping the concept of equity in mind -- to ensure EVs are adopted by more than just the Tesla owner -- and will also focus on placing infrastructure in low-income areas.

"Ten percent of the stations will be in low income areas, defined by census blocks," said Scott Blake, a communications consultant at AEP in Columbus.

Duke Energy also announced 10 percent of the chargers it is installing in Florida will be in "income-qualified communities," according to a company press release.

 

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