This week we saw a small change that may mark a major shift in thinking about energy, as well as some utility wheeling and dealing. Strap in, it’s time for Friday’s news round up!
Two weeks ago, we speculated that America’s utility merger madness may have stalled out. This week, the District of Columbia may have given it a kick-start. Maryland’s Public Service Commission (PSC) voted to approve the merger of Pepco and Exelon in May of last year, and the deal seemed pretty much done. The District of Columbia had other ideas, however, and rejected the proposal. The companies began to renegotiate, hoping to cook up a recipe that could win approval of the D.C. Public Service Commission (PSC). This week, the D.C. PSC did just that, approving the deal based on the new terms. The merger with Pepco will make the now-$7 billion Exelon the largest American utility by consumer base.
(Here in the nation’s capital, it’s been a strange month, with the utility merger, a Day Without Metro, and the opening of the DC Streetcar. Could the mythical Purple Line be next?)
When we last checked in, the Public Utility Commission of Texas (PUCT) had just voted to delay the final decision on the acquisition of Oncor by Hunt Consolidated and various other investors. The deal would mean Hunt Consolidated would take control of Oncor and convert it into a Real Estate Investment Trust (REIT).
The PUCT pushed Hunt to provide a more complete draft proposal on the deal. According to Utility Dive, the REIT structure proved “vexing” for PUCT regulators, who wanted to ensure that the tax savings promised by the new structure would be passed on to customers.
This week, they seem to be less vexed: the PUCT voted on Thursday to approve the acquisition. There are still questions, what the deal means for ratepayers and what kind of tax breaks the REIT will be able to reap, but the deal does create the largest utility ever run by an REIT.
Speaking of utilities, Consolidated Edison Co., New York’s largest, has made a huge commitment to giving consumers the data they want. As part of the Reforming the Energy Vision (REV) initiative, Con Edison's “Digital Customer Experience” program includes a $1.3 billion smart meter deployment, which the utility hopes will fundamentally change how consumers interact with their electricity. The deal stars several AEE members and other industry power players.
AEE member Opower, the global leader in cloud-based software for the utility industry, has been awarded a multi-year contract by Con Edison to support the smart meter rollout. In addition to helping Con Edison launch a series of residential customer programs, Opower is partnering with AEE member FirstFuel on similar engagement tools for commercial and industrial customers, so that businesses can directly access detailed information about their energy use and get recommendations about how to reduce usage and save money. Another AEE member, Silver Spring Networks, is providing the networking and communications for the smart meters, and Aclara, which acquired GE’s smart meter arm last year, will be providing the hardware.
Finally, here’s some news from the Energy Information Administration. This week, the EIA forecast that a fuel other than coal – natural gas – would be the top generation source in 2016. The shift is tiny (coal would fall to 32%, while natural gas rises to 33%), but still notable. Coal has been the top source of electricity generation since Edison turned on a light bulb, but low price has made natural gas a more economical choice, and other advanced energy technologies are also gaining ground. In fact, EIA reported that almost all of the new generating capacity installed last year consisted of wind (41%), natural gas (30%), and solar (26%).
Natural gas and other generation sources are just some of the advanced energy technologies available. Download the report to get the full picture.