The Western North American energy industry faces regional changes and is being influenced by changes at the national and global levels. Due to increased uncertainty with customer demands for both electricity and gas, transitions in regulatory and policy environments, and rapid technological advances, there is a heightened sense of urgency to adjust to these changes.
While not all of this change is happening overnight, it also isn’t happening at the slow and steady pace familiar to our industry. For instance, in California, we have only 13 years to meet state mandates of 50 percent customer energy use from renewable sources and to reduce greenhouse gas emissions to 40 percent of what they were in 1990. Across the West, low natural gas prices require a review of the economics of using coal. This speed of change presents tremendous technological and economic challenges. But with these challenges come opportunities and options.
This is why I am pleased to announce the WEI 2018 theme: “Maintaining Options in a Changing Energy Industry.” It highlights the need for our industry to be nimble and flexible.
How do we plan for the next generation of the grid? It will have to readily integrate distributed energy resources (DERs), while still relying upon natural gas for system reliability. We plan for it by minimizing long-term costs, maximizing value, and incorporating clean-energy solutions within annual planning and decision-making processes. Plus, we need to prioritize technologies that improve reliability. When looking at reliability issues, we need to weigh how DER technologies deployed in specific locations could be aggregated to provide grid services.
Trends in regulation and legislative mandates continue to drive change within our industry. In particular, federal and state energy policies have driven our industry to develop a smarter, cleaner and more-robust electric and gas infrastructure. However, now more than ever, we need to prepare for unexpected policy outcomes and strategically align with external stakeholders to influence those outcomes to the benefit of our customers and our companies.
Over the last several years, our industry has seen a tremendous shift in what our customers want and expect. Our customers want cleaner and greener energy with an expectation that our electric and gas systems are reliable and that rates remain affordable. The clean economy is our new frontier — in an industry that is well over 100 years old. We must continue to adapt and find innovative ways to serve our customers, communities, regulators and investors alike, even as the preferences of all of those stakeholders are in flux.
I am looking forward to meeting and hearing your insights about how to jointly address the changes affecting our industry, and how we can help one another to anticipate and maintain options in that change. WEI provides that collaborative opportunity, not only among energy companies, but also with the equipment, solution and service providers. I am honored to serve as the incoming WEI Chair as we deal with these uncertainties.