Situation
A transmission and distribution utility was evaluating how to expand its earnings opportunities beyond the traditional regulated utility model amid increasing affordability pressures. Leadership wanted to identify where the company could prioritize efforts most effectively to create incremental earnings while remaining aligned with its core utility strengths and long-term strategic objectives.
Approach
CRA’s energy experts developed a utility-of-the-future growth strategy anchored in the company’s earnings targets. Using a proprietary in-house financial model, we assessed the contribution of both regulated utility earnings and potential non-regulated affiliate businesses and evaluated opportunities across transmission, generation and supply, distribution, utility operations, and adjacent services. For priority opportunities, CRA assessed overall market potential, developed total addressable and serviceable market estimates, translated potential market capture into incremental net earnings, and evaluated execution considerations including required capabilities, capital intensity, regulatory constraints, competitive positioning, and time to market.
Result
The engagement provided management with a financially grounded roadmap for pursuing growth beyond the traditional regulated utility model. CRA identified and prioritized opportunities based on both potential earnings contribution and execution practicality, helping the utility distinguish near-term opportunities from longer-term strategic bets and focus resources on business models capable of supporting earnings growth while reducing reliance on customer-funded rate base expansion.