In an article for Bloomberg Businessweek, Navigant says investing in utilities has become more complicated
Until recently, investors saw utilities as a safe and consistent way to make a modest profit. Now, deregulation, the rise in renewable energy, and other industry changes are shifting their views.
“It has absolutely become more complicated to invest in utilities,” said Jan Vrins, leader of Navigant's global Energy practice, in an article for Bloomberg Businessweek. “The energy transformation is accelerating.”
According to the article, utilities face a variety of complicated factors, including having to navigate the rise of renewable energy. Utilities that embraced renewables are benefiting from early investments, where those that invested in coal and nuclear energy are, in some cases, struggling to stay afloat. Additionally, global warming is changing the landscape for industry. Hotter summers are making wildfires more prevalent, where states with strict liability laws, including California, can be held responsible for fire damages, putting utilities at financial risk.