How New Regulations Are Affecting the Electric Utility Industry
The electric utility industry is under constant pressure to explore new and more efficient ways to cut costs and increase production capacities for a secure, reliable and affordable supply. It’s been an uphill battle for a decade, and it keeps getting tougher. Aging infrastructures is getting costlier to replace, making the effort of growing revenue progressively more difficult.
This topic builds on our blog’s discussion last week about how technological changes are affecting companies in the industry. We’ll focus this time on the second driver of rapid change — regulations — and how material MDM can help manage them.
Constant changes in the industry’s standards and regulations have brought about a sea change in the way utilities run their business and operations. The utilities industry is still largely regulated, both internally and externally, and revenue generation is also dependent on consumers’ push for change. Companies have to constantly navigate price ceilings, quality objectives, and regulatory approval. In response, they frequently need to adjust processes for clean data governance. After all, regulatory compliance issues arising from corrupt data can be avoided with proper governance.
As regulators increasingly focus on the reduction of CO2 emissions and fossil fuel use, utilities must prepare for changes. The only way they can meet most of the targets is by retiring coal plants and adopting natural-gas plants. The cost of compliance will balloon, but improved efficiencies and cost savings in other areas could counter it to some extent.
In terms of operations, utilities are turning themselves into process-centric businesses that require inter-operability from the inside and the outside. In such a scenario, the only way they can keep their revenue intact — and ideally going up — is by embracing sustainability and squeezing out bottom-line savings. One driver of such savings (and an important one at that) can be material MDM. With a proper MMDM solution in place, you not only avoid noncompliance due to data errors, and you can also open up a new avenue of cost management with real dollar savings on indirect material orders.
Next week, we will wrap up our look at the agents of change in the electric utility market and focus on the shifts in customer expectations. Then we’ll discuss how these impacts can be managed with the least disruption using material MDM.
Further Reading –
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