![]() The argument for the decline of gas utilities is inescapable. But the pipelines, storage caverns, and compressor stations will still be needed, and those costs will be spread across a smaller customer base, driving up costs for gas, which makes electricity a more appealing alternative, and so on and so forth. The turnaround is stunning and raises a new risk: Are gas utilities about to enter a death spiral?Īfter all, as customers replace gas furnaces with electric heat pumps and factories replace fuels with electrons for their industrial heat and processes, the need for gas will drop. The power sector has become the central fulcrum of decarbonizing the economy and now is projected to double or triple in the coming decades as drivers replace gasoline engines with electric cars and other electrical appliances gain market share. More like this: More on Energy: Climate of Optimismīut it never came to be. This was a persistent worry and level (or decreasing) electricity consumption nationally in the late 2000s and early 2010s affirmed that the fears were not unfounded. That meant the utility’s extensive fixed costs for power plants, equipment, and power lines would be spread across a smaller user base, driving costs up for the remaining customers, making them more likely to flee the utility, driving costs up again, and so forth-presumably accelerating the downward slide of the utility’s revenues until all that was left were the few homes that didn’t have solar panels because their roofs could not accommodate them or because their tree shading made it impractical. The idea is that as rooftop solar panel prices dropped, customers would leave the utility to use their cleaner, on-site power production instead. The utility death spiral is a phenomenon that spelled doom for electric providers coast-to-coast. ![]() ![]() Though the utility served one of the fastest-growing cities in the United States and was on solid financial footing, we perpetually worried about the utility death spiral. ![]() Our municipal utility had more than 1,000 employees, annual revenues exceeding $1 billion, and peak load of about 3 GW. I was a commissioner for our local electric utility during the raucous years of 2008 to 2013, which spanned a global financial collapse, the shale revolution, plummeting wind and solar prices, and the rise of the smart grid. ![]()
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