By Dean Whittaker

This month I had the privilege of facilitating a 3-hour workshop for the Utility Economic Development Association to explore the trends impacting economic development in the context of the utility industry. We used an environmental scanning process called STEEP (which stands for Social, Technological, Economic, Environmental and Political trends) to explore the trends influencing the next 0-3 years, 3-5 years, and beyond 5 years.

A near-term trend that the group identified was distributive generation in which utilities’ customers are generating their own electricity primarily through roof top solar panels. The two challenges this creates for the utility industry is that they are required by law to purchase the excess power their customers generate at a higher cost than what they sell the power to non-solar customers, and they are currently unable to recoup the cost of the power grid infrastructure they built to deliver power. Legislation is being sought to create a minimum monthly fee to recover the cost of providing the infrastructure.

In the quest for renewable energy, distributive generation has grown significantly in states like Arizona where collectively the homeowner’s solar power is generating a significant amount of electricity equivalent to multiple power plants. Distributive generation creates a need to re-design the system to allow for two-way data communication on the grid in order to know where power is being generated, especially during power disruptions.

A more long-term trend that was identified was that of utility stock ownership of publically traded companies by the baby-boomer generation. As the baby-boomers pass on their utility stock to their millennial children, how will they regard a slow moving, low return investment? Will they sell these stocks to invest in high yielding stocks? Will this depress the value of the stock if many millennials sell their inherited utility stock? No one knows, but I thought the discussion was interesting.

From an economic development perspective, the three major trends we discussed were: digitalization, globalization, and connectedness. Digitalization, the conversation of the analog world to a digital one, will lead to the disruption of business models when combined with the exponential increase in computer power. Artificially intelligent applications are already disrupting many industries such as finance, health care, manufacturing, and many more. Globalization adds billions of people to the workforce as well as potential customers. The Internet of things (IoT) will be connecting our cities, automobiles, homes, watches, and our bio-metrics, giving us and marketers unprecedented amounts of data from which to predict and influence behavior.

Our ability to adapt to change will determine our future and the role we play in it. If there is one skill I want my children and grandchildren to have, it is the flexibility to adapt quickly to change and to plan for, anticipate, and predict the trends to be able to prepare for the challenges and seize the opportunities.