You can hitch a ride from Uber and rent a vacation home from Airbnb. Disruptive technologies have revolutionized many industries, creating new business models built around customers.
Will utilities be the next industry disrupted by a new cyber platform?
New York state is boldly preparing for just such a possibility.
New York is making history as they embrace a new set of regulatory principles to power the state’s electricity. The program named Reforming the Energy Vision (REV) has a mission to find opportunities for utilities to drive value to customers in the form of reduced costs and reduced bills by using distributed energy.
The last major utility sector revolution at the turn of the century led to the Enron debacle, utility bankruptcies and major disruptions and sent shockwaves throughout the energy industry. Using history as its guide, the state of New York is rewriting the rules of energy distribution on a smaller scale to ensure that they learn from their mistakes. This rollout is similar to the way Uber rolled out their innovative company with a limited number of cars in a few metropolitan areas.
What does this mean for the state of New York? The decentralization of the utilities brings a whole host of opportunities for the state of New York. Utilities will continue to invest capital in their system while also leveraging the value of that investment for customers.
But customers will now have choices when it comes choosing energy usage and providers. And it will attract entrepreneurs to build new start-up companies and services, plan architects say.
The concept behind REV is based on usage efficiency, system efficiency and capital efficiency over a two-way platform. Audrey Zibelman, the architect of REV, hopes that this new “smart” business model allows utilities to do something different which saves customers money.
What does the future look like for the state of New York? Could it be the Silicon Valley of energy innovation? That’s what the state is banking on. Only time will tell. But the implications could be vast – unltimately touching everyone who flips a power or light switch, creating hundreds of billions of dollars of new business.
EDITOR’S NOTE: Audrey Zibelman will be a featured keynoter at the “Empowering Customers & Cities” executive energy forum in Chicago November 1-2. Also featured will be Geoffrey Parker, who has written and spoken about the transformative power of new platform businesses. He is a professor of engineering at Dartmouth and visiting scholar at the MIT Initiative on the Digital Economy.