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The New Math

Solving the equation for disruption to the U.S. electric power industry


The final installment in a three-part series from the Deloitte Center for Energy Solutions.

Profound changes to the U.S. electric industry are not just inevitable, they are already occurring. The question is no longer if, but where and how fast? What will new business models looks like, who will be the new participants in the industry, and what roles will technology, customers, and regulators play?

Completing Deloitte’s series of papers on the future of the electric power industry, which includes The Math Does Not Lie and  Beyond the Math, this final installment examines a fundamental shift already occurring in the electric industry’s “license to do business”, and “participants in the game”, and sets forth frameworks electric companies may consider as they transition to new business models to confront the challenges and seize the opportunities that lie ahead.

A fundamental shift

Two changes in the industry’s relationship to the marketplace have significant implications for the current electric business model – the new license to do business and new participants in the game of providing electric services to customers.

In addition to “safe, reliable and affordable”, environmentally responsible is now an imperative to doing business. And while some new technologies and products may come and go, new market entrants are here to stay.

While the traditional way of doing business has begun to change, the electric industry business model has, for the most part, stayed the same – setting the stage for disruption.

Modeling disruption

There is general consensus that disruption in the U.S. electric sector will occur at different times and in different ways across the country. Deloitte has developed a predictive model to provide insights into the relative pace of disruption across each of the 50 states.

Evolving electric sector business models

Electric companies will need to examine a host of potential strategies and associated business models in order to navigate these changes. To facilitate the process, Deloitte examines potential strategies that can be grouped into one or more categories.

The regulatory clash

There is an inherent trade-off between safe and reliable electricity and affordability. This will likely become more acute in an environment of rising costs to maintain a reliable grid and flat or declining kWh (kilowatt-hour) sales.

Value to electric consumers

Successful strategies will have several common elements, and all will be designed with the overriding goal of creating incremental value to electric customers, regardless of the source of the electrons they consume.

Learn more by downloading the full report.

As used in this document, ‘Deloitte’ means Deloitte LLP (and its subsidiaries). Please see for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting.


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