Insights
Investor Perspectives on Natural Gas Utilities
The American Gas Association (AGA) and the Canadian Gas Association (CGA) commissioned MCR Performance Solutions LLC (MCR) to update and enhance their 2022 study, “Investor Expectations on North American Gas Utilities.” MCR found that while the gas utility industry’s underlying commercial foundation remains solid, regional policy challenges coupled with rapidly growing energy demand (and the urgent imperatives of affordability, security, resilience, and reliability) suggest there is potential in considering new commercial avenues—avenues that can both sustain a mature industry and align business strategies with important public policy and social objectives.
Read the Investor Perspectives on Natural Gas Utilities
Now for the Hard Part – Growing Your Utility without the Triple Two’s (white paper)
U.S. utilities have enjoyed a decade of capital investment that is delivering greater reliability and efficiency for customers, strong returns for shareholders and lower environmental impacts for all. Looking ahead, the industry faces a generational investment opportunity in a transitioning energy world, but in our view, execution risk is rising. Why?
Cutting Carbon and Adding Renewables May Not Win ESG Points
Switching from coal to natural gas and renewables has made the power sector a leader in cutting US carbon emissions. But adherence to a strict environmental, social, and governance (ESG) diet would deny capital to the very sector that’s doing the most good.
Stove wars—is natural gas part of the problem or part of the solution? (white paper)
Natural gas has emerged as arguably the world’s most critical source of energy, but the industry seems to be battling for its own survival in the face of environmental activism and local attempts to ban its use. In our view, the gas industry needs to emphasize the role it plays not only in the transition to cleaner fuels, but in assuring the reliable delivery of all forms of energy, including electricity.
The fallout from the SVB event and how utility financial professionals should respond (Point-of-View)
Over the past few weeks, business news headlines have been overwhelmed by echoes of the 2008 and 2020 financial crisis. Utilities are highly capital-intensive and rely on banks, particularly for short-term financing; should they be concerned about recent events?
Utility Headwinds Call for Smart Cost Management
As third quarter earnings reports begin, utility results will be scrutinized for hints of slowing growth against a backdrop of higher interest rates and upward pressure on labor and other costs. The likelihood of “higher for longer” points up a need for a strategic and sustainable approach to cost management.
Utility Cost Management—A Strategic Approach
Cost management and budgeting in the utility industry are often based on prior year actual numbers and activity, without questioning why specific line items need funding, or evaluating the risk of not funding or carrying out a particular project or activity in a given year. MCR’s nuclear practice has developed a proprietary, strategic approach to facility-wide cost management, capital project evaluation, and capitalization vs expensing decisions with demonstrated savings in the hundreds of millions of dollars. This strategic approach is outlined in our most recent whitepaper.
DeepSeek, or Deep Fake? Data Center Challenges and Opportunities for the Power Industry
Artificial intelligence–and the power-hungry data centers that run it—dominated utility investor dialog last year. The power sector has decades of experience with shiny new sources of electricity demand—and the scars to prove it. Supply is being built, and the data centers are coming…but it’s fair to ask if they’ll all stick around.
Why Can’t We Be Friends? Gas and Electricity Can Meet Energy Challenges Together
Utilities today are challenged to deliver reliable, resilient, affordable, and clean energy against a backdrop of high interest rates, inflation, and increasingly hostile weather. Rather than “gold-plating” to address peak loads and tail risks, utilities might better serve their customers by working together to optimize use of built-and paid-for gas and electric delivery infrastructure.