British Government Signs A Deal For New Nuclear Power Plant

Electric power utilities are facing growing financial pressures as traditional power usage evolves through a combination of increased use of renewable power, system efficiencies, and anemic demand.

Since 2004, average residential electric prices have risen 39% to 12.5 cents per kilowatt hour, while sales remain lower than they were in 2007 before the recession. If utilities continue to raise prices, then more consumers will embrace energy saving devices and alternative power sources like solar panels. This dynamic could create a vicious cycle of falling revenues and rising costs for utilities.

“Utilities seem to have concrete shoes on,” says Elisabeth Graffy, co-director of Arizona State University’s Energy Policy, Law and Governance Center. – As reported by the Wall Street Journal

It may not be the “Death Spiral” that some analysts describe, but there is no question that utility executives and regulators both are forced to explore new business models. Regulators face obligations to keep utilities solvent because the electric grid is critical infrastructure.

Some power utilities, like NRG Energy, are getting creative by starting or acquiring businesses that sell solar panels and natural gas fuel cells to consumers, enabling them to be more self-sufficient and generate their own power.