Guidehouse Insights Explores How Utilities Are Creatively Investing in Cloud-Based Solutions

A new report from Guidehouse Insights explores the evolution of cloud-based regulatory policy and outlines ways electric utilities can earn a greater rate of return on their cloud and software as a service (SaaS) investments.

Beyond inherent cultural skepticism, issues pertaining to accounting and regulatory parity have inhibited the adoption of cloud computing and SaaS. While a few state commissions have eased their restrictions to help level the playing field between on-premise and cloud-based solutions, without a standard approach or industry-wide consensus, eliciting widespread change remains a challenge. According to a new report from Guidehouse Insights, utilities are, however, using several creative workarounds to enhance the earnings potential from their cloud-based investments.

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“The perception that electric utilities have failed to keep pace with the level of innovation seen in other major industries is largely correct,” says Michael Kelly, principal research analyst with Guidehouse Insights. “As most other mission-critical sectors migrate to cloud-first software strategies, the question becomes, ‘why not electric utilities?’ The answer is multi-faceted.”

Guidehouse Insights recommends that utilities engage with regulatory commissions to explore remuneration mechanisms in lieu of waiting for widespread standardization or industry consensus; regulators must be agile and flexible in ratemaking procedures to facilitate industry innovation; and energy software providers should continue advancing cloud-first development and sales strategies.Furthermore, industry stakeholders would benefit from greater collaboration and knowledge sharing, according to the report.

The report, Enabling Utilities to Invest in Cloud-Based Solutions, discusses how cloud and SaaS are transforming the energy software space and why regulatory and accounting rule frameworks have hindered cloud and SaaS adoption to date. The report provides approaches to work through traditional regulatory barriers and facilitate appropriate renumeration for cloud and SaaS investments.

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