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icf.com
we areFour Paths to Prosperity: New Revenue Opportunities for Utilities
Presented by: Angela Strickland
October 23, 2017
ICF Corporate Overview
What We Do
Integrated,
purpose-driven
data
Analytics
Comprehensive,
end-to-end
services
Program
ImplementationStrategic
planning
& consultation
Advisory
Cutting edge
technology and
customer
experience
Digital
Outreach that
drives behavior
and outcomes
Engagement
ICF proprietary and confidential. Do not copy, distribute, or disclose.
Agenda
Setting the Stage
Four Paths to Prosperity Growing Sales
Growing Rate Base
Value-Added Services
New Lines of Business
Q&A
3
ICF proprietary and confidential. Do not copy, distribute, or disclose.
Competing for Customers
4
Companies like Amazon and Apple are
changing customer expectations
New players are bringing innovation and
disruption to the traditional utility space
Declining costs and improved economics
are enabling technology adoption
Regulatory policies tend to favor
competition and market development
ICF proprietary and confidential. Do not copy, distribute, or disclose.
Compounding Pressures
Flat or declining electric sales
Continued need for infrastructure and grid
modernization investment
Rate designs that challenge recovery of fixed
costs
Pressure to keep rates affordable and
competitive
Risk: Revenue and earnings erosion
5
ICF proprietary and confidential. Do not copy, distribute, or disclose.
Four Paths to Prosperity
6
Utilities can grow or diversify revenue by offering new products or
services through these four different paths:
The revenue potential for each of the
paths are linked to factors such as:
market demographics, regulatory
treatment, and capital availability.
Examples
Some are more aligned with the
current utility business model, while
others represent a greater degree of
change and innovation.
ICF proprietary and confidential. Do not copy, distribute, or disclose.
Growing Sales with Electrification
Beneficial Electrification
The practice of powering with
electricity appliances and machines
that have traditionally run on fossil
fuels.
7Colburn, Ken. "Beneficial Electrification: A Growth Opportunity." Web blog post. RAP, 2 February 2017. Web. 13 October 2017.
ICF proprietary and confidential. Do not copy, distribute, or disclose.
Beneficial Electrification Opportunities
8
Source: Environmental Assessment of a Full Electric Transportation Portfolio: Volume 2: Greenhouse Gas
Emissions. EPRI, Palo Alto, CA: 2015
Battery electric
vehicles
Plug-in hybrid vehicles
Transit vehicles
Goods movement
Marine/port equipment
Industrial equipment
Airport ground support
equipment
Material handling
Recreational Vehicles
On Road Transportation Off Road Transportation
Manufacturing
Industrial processing
Heat pumps
Agriculture
Lawn and garden
Other Sectors
Off road transportation categories with the
highest electrifiable potential are forklifts,
ports/intermodal facilities, truck refrigeration
units, and airport ground support equipment.
ICF proprietary and confidential. Do not copy, distribute, or disclose.
Growing Rate Base
Community Solar
Energy Storage
Microgrids
Combined Heat & Power
Electric Vehicle Charging
Stations
Enhanced Reliability
Infrastructure
In front of the Meter
Rooftop Solar
Energy Storage
Microgrids
Combined Heat & Power (CHP)
Electric Vehicle Chargers
Ground-source Heat Pump
(GSHP)
Backup Generation
Behind the Meter
9
ICF proprietary and confidential. Do not copy, distribute, or disclose.
Value-Added Services
Online Marketplace Thermostats
Lighting
Power Strips
Water Saving Products
10
Connected Home Monitors
Security
Smart Plugs
Google Home / Amazon Echo
ICF proprietary and confidential. Do not copy, distribute, or disclose.
New Lines of Business
Solar and DER Installations
Appliance Servicing and Repair
Vegetation Management
Real estate Services
Meter Reading Services
Distribution and Backup Generation
Strategic Partnerships
Outdoor/Security Lighting
Unregulated Affiliates and Acquisitions
Protection Plans and Warranties
11
ICF proprietary and confidential. Do not copy, distribute, or disclose.
Conclusion
New products and services can benefit customers by offering greater
choice and personalization of their energy experience
Utilities can benefit by creating new sources of revenue and diversifying
the business model
The universe of potential options is large – finding the right option
requires a framework for evaluating and ranking the options and
developing a sound business case
ICF proprietary and confidential. Do not copy, distribute, or disclose.
Questions?
Angela Strickland
13