Utilities Accept the New, But Will They Embrace It?

Texas power generator Luminant announced Friday that it will close two coal-fired power plants in early 2018. Last week, it said it would close another coal plant that is more than 40 years old -- an announcement that came days before the clearly telegraphed effort to roll back the Clean Power Plan. The three plants join the ranks of more than 200 plants that have closed in the past decade due to age, a losing battle against low-cost natural gas and renewable energy, low or negative demand growth, and pollution regulations. The news indicates that long-term economics, not short-term politics, are shaping today’s power mix.

Utility companies, it seems, are just not that into coal anymore -- or they don’t see it as a source of growth. Using the Bloomberg Document Search, I combed through investor presentations by 127 publicly listed U.S. utility companies since 2009 and discovered that four particular terms or keywords -- “new technology,” “distributed energy,” “power/energy storage” and “batteries,” and “innovation” -- are being mentioned with increasing frequency, indicating that companies view these new technologies and concepts as either areas for growth or material threats to their success.