EnerNOC, Inc. (NASDAQ:ENOC) is just such a player. The company offers demand response solutions, which essentially allow end-users of electricity to reduce their energy use, either actively or automatically. EnerNOC provides its services to PJM Interconnection, a regional transmission organization that coordinates the movement of wholesale electricity. These activities are precisely the sort that subvert the legacy, vertically integrated model that The Southern Company (NYSE:SO) and other utilities follow.
Takin’ it to the streets …
Let’s circle back to NRG Energy Inc (NYSE:NRG), the biggest power provider to U.S. utilities. The company has begun providing electricity directly to consumers, bypassing its traditional clients. NRG has gotten into the rooftop solar business for both residential and commercial customers and intends eventually to offer natural-gas generators to pick up the slack when the sun don’t shine.
In an interview at a recent MIT energy conference, NRG Energy Inc (NYSE:NRG) CEO David Crane said consumers are figuring out that “they don’t need the power industry at all.” Crane has bigger plans, too. “The individual homeowner should be able to tie a machine to their natural gas line and tie that with solar on the roof, and suddenly they can say to the transmission-distribution company, ‘Disconnect that line.'”
If I were an operator betting on the status quo, I’d be very nervous. Companies such as NRG Energy Inc (NYSE:NRG) and EnerNOC are making all the right moves, and utilities are going to have to get nimble if they want to survive in the long run.
The article The End of Utilities? originally appeared on Fool.com and is written by Sara Murphy.
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