What options are companies considering?
In a few short years, domestic energy supply has undergone a major shift in favor of natural gas. As natural gas reserves and production have expanded dramatically driven by shale gas, prices have hit a 10-year low. Despite all the shale gas hype, many questions still remain about its accessibility in some locations and its environmental safety.
A lack of diversity in a portfolio will cause exposure to short term price spikes or long term price shifts. Utilities will need to consider contingency plans or put infrastructure in place now to deal with these possibilities. Demand side management programs will likely need to play an increasing role to allow utilities to mitigate such risks.