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US utilities have reached a tipping point in the evolution of their sector, driven by challenging regulatory and political agendas, inherent customer dissatisfaction, emerging competition from new entrants, and increasing risk in long-term capital investments. Smart grids, smart cities, and the panoply of digitally related technologies could be either the savior or the executioner of an industry that has little changed since the days of Thomas Edison. This new era of “digital disruption” has the possibility of empowering customers, optimizing transmission and distribution networks, balancing generation against demand, and integrating energy supply with every other aspect of connected homes and smart cities. Utilities capable of capitalizing on such advances will be well placed for the future; however, those who fail to exploit these new technologies
will be left to the mercy of over-the-top competitors, fickle shareholders, and fierce regulators.

Ovum’s survey of more than 100 utilities across the US, serving 38% of all customers, uncovers a concerning dichotomy between the conceptual understanding that their sector needs to go through significant transformation to meet twenty-first–century customer needs, and the underlying reality that the majority of utilities either believe they have already done enough or are awaiting the necessary regulatory guidance to progress further. The focus has been on the what rather than the how, with an over-reliance on internal systems and capabilities, even when the need for cultural change and missing skills are already very apparent. Investor-owned utilities are ahead of the curve in understanding that they will need to open their doors to partners and vendors who can help them transform systems and processes to leverage all the potential that digital disruption can offer. The clock is ticking, the pieces are in position, and US utilities now need to make bold moves, or the endgame will be taken out of their hands.

Smarter Utilities Survey 2016

Key messages

• Digital disruption is here to stay, driven by the strategic imperatives of the "energy trilemma."
• Regulation will never catch up and utilities waiting for clarification will lose the initiative.
• Transformation is not a one-time effort and will cause utility systems architectures to become more


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