"Energy Efficiency is at the heart of energy affordability." Tony Earley, Chairman, CEO and President of PG&E Corporation

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PGE&E CEO Tony Earley Joins Utility Leaders at CERAWeek Conference

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HOUSTON — PG&E leader Tony Earley joined other utility leaders this week at the IHS CERAWeek 2013 Conference. In a wide-ranging discussion, Earley spoke about the importance of investing in America’s utility infrastructure, energy efficiency and diverse energy supplies.

Earley, the chairman, CEO and president of the PG&E Corporation, was joined on a CEO panel at the conference by James Rogers, the chairman, CEO and president of Duke Energy; John Russell, the CEO and president of CMS Energy Corporation and Consumers Energy Company; and moderator Lawrence Makovich, vice president and senior advisor for IHS Global Power.

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Tony Earley told fellow utilities that new infrastructure is badly needed to support wider adoption of sustainable technologies, including renewables. (Currents Archive Photo.)

The conference focused on how new technologies, shifts in global demand, regulatory uncertainties, and the new realities and cost structure of supply are transforming the energy industry.

Earley underscored the growing importance of investing in utility infrastructure. Built primarily in the post-World War II era, much of the nation’s gas and electric system is due for upgrade or replacement, he said.

Safety and reliability concerns are key drivers. But, he added, new infrastructure is also badly needed to support wider adoption of sustainable technologies, including renewables.

New infrastructure needed for increased renewables

Although PG&E is on track to hit California’s 33 percent renewables target by 2020, Earley pointed out that, to be successful, this integration of large scale solar, wind and other sources also requires new transmission and IT investments.

Duke’s Rogers said that these and other factors are pushing utility capital budgets to levels that are twice as high as they were 15 to 20 years ago.

While average power bills still cost customers less per day than a gallon of gasoline, the panelists agreed that the increased utility spending will put pressure on rates, making it even more important for utilities to help customers manage their bills.

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One key to maintaining affordability will be continued investments in energy efficiency, Earley said. He cited the California utilities’ 30-year success with efficiency programs as evidence of the potential savings. Over this time, utilities have helped save customers an estimated $20 billion.

Earley also encouraged continued federal and state efforts to drive efficiency gains through incentives, codes and standards for buildings and appliances, and other policies.

More efficient regulation would lower costs

Opportunities also exist to lower costs by making existing regulation more efficient, he said.

Even more critical, the panelists urged the need to maintain a diverse energy supply, especially as natural gas becomes an increasingly dominant fuel for power generation.

Earley emphasized that a balanced mix of different generation sources protects customers against volatility in prices.

Companies and regulators, he said, will need to have the courage to green light investments in other technologies that may not look as competitive with today’s low natural gas prices.

According to conference organizers, IHS CERAWeek is the leading gathering of senior energy decision-makers from around the world. More than 300 speakers — including senior industry executives, government officials and thought leaders — provided their thoughts on the changing energy playing field.

IHS is a global information company that focuses on energy, economics and other topics. It employs 5,500 people in 30 countries.