A Case Study of CPS Energy’s Management of Disruptive Forces

Abstract

Two major forces continue to drive disruption in the utility space; technological innovation in the form of distributive energy resources (DER), and energy efficiency/demand response (EE/DR). These forces drive down demand which, in turn, directly leads to decreased revenues for utility companies. As a result, the utility responds by seeking higher rates, which decreases demand and increases economic incentive for DER and EE/DR (Kind, 2013). These two disruptions continue their influence as these increased rates lead to lower customer satisfaction levels, incentivizing the adoption of additional DER and EE/DR products, perpetuating the cycle. As a municipal monopoly CPS Energy (CPSE) faces a number of real threats and opportunities as they ride this wave of disruption. This case study will analyze the impact of the DER and EE/DR forces on CPSE and their opportunities.