Less than a year ago, NRG laid the groundwork to be the Apple or Google of energy services. But CEO David Crane left the company last December amidst investor pressure -- and Steve McBee, CEO of NRG Home, wasn’t far behind. 

Eric Wesoff continues to document the exodus from the embattled power producer. 

“Energy is not immune to big global forces sweeping through basically every other segment of the market,” McBee said during a recent interview with GTM. “It’s inevitable.”

With McBee gone, NRG is now grappling with how to pursue its NRG Home business.With millions of retail customers, community solar ambitions and the backing of a Fortune 250 company, the non-start of NRG Home highlights the immense challenge of quickly transitioning into a modern energy company.

Within the next decade, it is very likely that a handful of companies will emerge with customizable packages of energy management services for the modern consumer and business. Many large energy companies like NRG are potential contenders -- but the future market leader could also be a company largely unknown to the world.

Who will it be?

For the sake of argument, we’re defining the utility of the future as the entity that consumers and businesses think of as their power provider -- the company that they’ll call when the lights go out.

But the utility of the future will also have to be so much more to succeed -- leveraging data, new technologies and personalization to transform the way customers consume and deliver power.

The energy retailer

One of NRG’s greatest strengths is that it already owns a handful of energy retailers that service millions of customers, particularly in deregulated Texas.

The energy retailers that can take bold steps and establish new revenue streams in the deregulated states will be ready to act if and when regulatory reform comes to other parts of the U.S. that favors distributed generation and dynamic demand-side reductions.

There are also a range of retailers building new business models in Europe that would love a piece of the U.S. market. German utility RWE is a company launching a $140 million venture fund to invest in startups, particularly out of Silicon Valley.

Both RWE and E.ON have separated their consumer-facing green businesses from their centralized generation businesses. “The utility of the future will be the one that has the customer relationship,” said Shayle Kann, SVP of GTM Research.

If regulatory changes lead to a world in which there are wires companies and energy retailers, there could be a handful or retailers that are poised to incorporate everything from solar to home security to internet in a bundled package, as Vivint is testing in the U.S

Although U.S. retailers are generally more nimble than many traditional, vertically integrated utilities, they have still been slow to offer creative, forward-looking propositions to customers around distributed energy and layered services. It's possible that if one can get it right, others will quickly follow.

The regulated utility

Many large regulated utilities in the U.S. have the advantage of millions of customers. A handful are already thinking critically about how they can add services on the customer's side of the meter, while still owning the wires.

Twenty First Century Utilities is one of those power companies. It wants to be the Wal-Mart of its service territory, bringing vendors together to negotiate the best deal for the customer. TFC’s vision, however, requires significant changes to how utilities would be able to earn income.

Some states are already evaluating changes to utility business models. One of the most progressive is New York, which would shift distribution utilities into platform providers for distributed energy services as part of its Reforming the Energy Vision (REV) proceeding. As in TFC’s vision, the platform providers would help customers evaluate third-party options for everything from solar to efficiency.

Unlike TFC’s vision, however, the utilities in New York will not also be able to offer those services, such as rooftop solar, directly to customers. If New York is successful, it will likely instruct other states on how to shift utilities into new business models, and new roles, for the future.

“If you look at the core operation of a utility, the only way the utility of the future can be different from the utility as it is today is if something like REV happens,” said Kann.

Regulated utilities have the advantage of existing relationships with customers, but many don’t have the big data or consumer experience expertise to make the most of that, even if regulators allowed them the room to innovate.

Solar provider +storage

When SolarCity announced its partnership with Tesla in 2014, GTM’s Jeff St. John noted that the duo could be the utility industry’s worst nightmare.

Even with the downward cost trends for storage and solar, it does not make sense for most U.S. homes or businesses to cut off a grid connection altogether. There is immense value in that grid connection. Tesla and SolarCity have said the cost of an additional storage system could be offset by services provided to the grid, such as peak shaving or frequency regulation.

Sonnen, a German energy storage company, already sees itself as a power provider of the future in its home country. It offers community storage to customers who already have solar, allowing them to operate as a virtual grid and sell any excess power back to the wholesale market.

“We rolled out the Sonnen Community -- called ‘the Airbnb of energy’ -- that allows trading between small producers of energy, and we sit in the middle and facilitate that,” Boris Von Bormann, CEO of Sonnen, recently told GTM. “The U.S. presents an opportunity but the regulatory framework makes it a little harder to really implement that.”

Along with deregulation, power prices would need to be higher in many parts of the U.S. for schemes like this to gain appeal. In the near term, solar and storage providers will continue to put pressure on traditional utilities, but they have yet to create an offering that truly supplants them.  

Google?

Who knows exactly what Google is doing beyond procuring a lot of clean energy -- but never count it out.   

With troves of data about people’s everyday lives (and a little thermostat provider called Nest), Google is well-positioned to make a move into energy services -- if it ever decides it wants to.

Many question whether a company like Google would actually want to be in the power business, even if it has the ability to buy and sell electricity. But Google is investing in technologies to develop and deploy “advanced electrical power conversion and conditioning solutions that aim to fundamentally change the world of power.”

If those investments are spun out into a separate company, or married with a company that already operates at the grid edge, there is an opportunity for Google to help redefine the utility without ever becoming one.

The wild card

It’s not unthinkable that the premier energy provider a decade from now could be a company no one has heard of in 2016. There is enough private equity interest to fund a multibillion-dollar company that will redefine the energy services space, said McBee.

“Somebody will build an incredibly valuable, big-wealth-producing business leading into demand service models and customer centricity and sustainability,” McBee said.

Many companies are chipping away at the edges of that offering, but no one has packaged it together in a way that has pulled large corporate energy users away from utilities or huge swaths of consumers into a new compact.

No matter which company ultimately captures the trend, it's coming sooner or later.

GE recently spun off its energy-efficiency and distributed-power technologies businesses into a unit called Current to digitize the energy business and help make customers more sophisticated energy consumers and producers.

A bold investor could also take a utility and reshape it into something entirely new -- something that could provide the sorts of services that GE looks to offer with Current. “Will there be a takeover of a utility whose new parent is turning that into utility 2.0?” speculated Kann.