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Utility execs see potential in adapting to industry changes

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Utility execs see potential in adapting to industry changes

Byfocusing investments on the distribution system, will be able tofacilitate new technologies that are coming online and of interest tocustomers, company Chairman, President and CEO Theodore Craver Jr. said.

Craverwas among the many executives at Bloomberg New Energy Finance's annual summit April4-5 in New York City who talked about how the industry is adapting to changesdriven by policy, technology and consumer behavior.

EdisonInternational, the parent company of SouthernCalifornia Edison Co., has previously what it sees as the potentialin building a 21st century interactive power network. Modernizing thedistribution system to one that is more flexible, dynamic and capable oftwo-way flows of electricity is a good investment, Craver said.

"Wefeel that will not only encourage and facilitate the new technologies, but alsomake the grid more resilient, more responsive and ultimately one that servesour customers better," he said.

CEO Michael Lewis said infrastructure being put in place today — be itdistributed generation, smart meters and devices, or mobile phone apps — issetting up a future where consumers will become even more engaged in theirenergy use.

"Ithink what you will see, at some point, is a tipping point where customers takethe driving seat and will push it very much further," he said.

Invarious remarks, executives stated the importance of helping and not hinderingcustomer preferences for things like solar panels or energy efficiency andgiving customers the tools needed to make more informed decisions.

RudolphWynter, president and COO of NationalGrid USA's FERC-regulated businesses, said it would be a mistake toignore customer wishes. "In our minds, we're in the businesses ofconnecting consumers to the energy sources that they need and want," hesaid.

Tomaintain relevance in the future, ExelonCorp. President and CEO Christopher Crane said utility companieswill have to provide what consumers want. "If it's to have private solaror if its energy efficiency, we have to transform our companies to be enabling,"Crane said.

Havinga philosophy of saying no to technologies that customers are interested in willmean that it is only a matter of time "before you are irrelevant to thewhole system," he said.

President andCEO Badar Khan said the potential of technology and data to engage customers isone that more companies should take advantage of. Rather than fearingtechnology and how disruptive technological changes can be, the industry shouldembrace it.

"Weshould be looking at opportunity as a result of disruption," he said.

Chairman, President and CEO Ralph Izzo said changes in the industry requiredifferent approaches, depending on the situation.

"Ido think we fight sometimes. I believe we fight for maximizing environmentalprotection, while minimizing impacts on our customers," he said. "Ido think we adapt. Sometimes we don't get everything we want in that fight andthen we make sure that we do the best we can under the rules as they arewritten."

ForPSEG, that has showed up as more than $1 billion in distributed solarinvestments as a regulated entity, more than 300 MW of competitive solargeneration and $400 million of energy efficiency investments.

Whilethe industry needs to make changes and adaptations, so to do regulators andpolicymakers, said Richard Kauffman, chairman of energy and finance for thestate of New York.

Kauffmansaid a look should be given to policies that do not allow for system upgradesneeded to accommodate the growing interest in distributed solutions. New Yorkis in the midst of its Reforming the Energy Vision initiative aimed at helpingwith integration of distributed energy resources, making the electric powersystem more efficient, and getting customers more engaged in their energy use.

NewYork is going forward with changes now, he said, because the costs of stayingon the same path are too great. While generation costs have fallen, the costsof distribution have risen. Economic benefits from transitioning to a cleanenergy economy and necessary emissions reductions will not be seen without changes.

"Businessas usual is not sustainable either from an environmental standpoint oreconomically," he said.