CERAWeek: Utility industry consolidation coming

The U.S. utility sector faces daunting costs to build new power plants with updated technologies to cut emissions, and the future could bring an unprecedented wave of consolidation in the process, says James Miller, chairman and CEO of Pennsylvania-based PPL Corp.
New plants aren’t always needed to meet new demand. They also need to replace aging infrastructure.
Cleaner coal, carbon capture and storage and nuclear facilities “all come at a very high cost, and so the issue of dealing with the future may well compel consolidation in this industry in a much more powerful way than we have seen consolidation occur in the past,” Miller told executives today.
He said the industry has nearly 200 companies with market capitalizations ranging from half a billion dollars to $40 billion, so the balance sheet requirements to build new plants today that satisfy power and environmental needs “will remain a challenge.”
And consumers will have to share that cost.
“The country has to face the real cost of power,” Miller said.

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