A mid-sized utility company was facing a set of critical strategic questions around finding long-term growth for the core electric utility businesses. The business was challenged with lower electricity growth and concerns over rate headroom.
The energy transition created important challenges for the electric utility company in terms of the scope and pace of decarbonization, selecting and investing in key areas of market growth including the role of transmission as well as considering how to best address changing customer needs. Other key questions included how to ensure the focus on distribution reliability, the strategy for participating in distributed generation, and the role and importance of wholesale market participation.
CRA’s Energy strategy consultants partnered with the company’s Growth and Strategy Group and the Electric business to develop a comprehensive electric strategy for the organization. The strategy defined the utility’s strategic focus, how to best leverage its strategic assets and core competencies, where it would invest to drive growth, and how it would organize to accomplish its goals. The effort began with developing an aligned view of the key value drivers in the electric utility sector as well as a shared view of alternative energy transition scenarios that are expected to shape the market environment.
CRA’s team then performed an independent and objective assessment of the company’s current positioning, its performance drivers, and expected performance under current plans. Alternative strategy options were developed together with the company and a rigorous financial, strategic, and risk-related analysis was performed to assess these alternatives.
Management aligned around a set of priorities to continue to drive improvement in the core utility business as well as four strategic priorities to support short- and medium-term growth consistent with the company’s performance ambition. The goal is that the electric sector should become a more important contributor to the overall growth and value creation for the company. The alignment around the four areas of growth is creating the necessary strategic capital and resourcing focus to deliver against its performance ambition.