Utilities must "elongate" their business model and "jump over the meter," says Thomas Fanning, the head of Southern Company and the incoming chairman of the Edison Electric Institute.
"The traditional business model will morph," Fanning told the closing session of the EEI annual meeting of industry executives, held in Chicago.
A century-old utility sector must learn how to embrace "creative disruption" and "innovations quickly defining the future of energy," Fanning said.
Chris Crane, CEO of Exelon, said, "storage is the next big change. Storage is something we need to embrace."
Exelon is playing a leading role in using fuel cells, deploying 50 megawatts, he said.
They will be knitted into an evolving Exelon energy infrastructure that will require $25 billion in investments in the next five years, Crane said.
One key issue for the industry is the disconnect between environmental policy and energy policy, Crane said.
Moving to a clean carbon future, utilities are deploying new renewable generation at a time when utilities have no load growth, he said. Thus Exelon is forced to move to close two of its nuclear plants, which together produces the same amount of energy as all the wind generation in Illinois, Crane said.
Pat Vincent-Collawn, PNM Resources chief executive, said the industry is all in on clean energy.
"We don't talk about the clean power plan because we are moving on," she said. "The industry is transitioning. We are listening to our customers more than in the past."