The investor-owned utilities themselves think that things are about to change dramatically, drawing comparisons to industry disruptions like those faced by regulated airlines, the phone company monopolies and RIM. Mostly these disruptions will be driven by distributed renewable energy, but also by energy efficiency and market changes.
From a report by the Edison Institute, an association of shareholder-owned utilities:
There are important lessons to be learned from the history of the telephone industry. First, at the onset of the restructuring of the Bell System, there was no vision that the changes to come would be so radical in terms of the services to be provided and the technologies to be deployed. Second, the telephone players acted boldly to consolidate to gain scale and then take action to utilize their market position to expand into new services on a national scale. Finally, and most important, if telephone providers had not pursued new technologies and the transformation of their business model, they would not have been able to survive as viable businesses today. So, while the sector has underperformed the overall market since 2000, and as shown in Exhibit 5, even a leading industry participant like Verizon Communications has not been able to perform in-line with the overall market despite its growth, market share and solid profitability outlook due to the competitive uncertainties inherent in the business. However, those telecom providers that have embraced new technologies and addressed the competitive threats they faced have managed to survive and to protect investors from a “Kodak moment.”