Utilities are in a “death spiral,” trapped in a “vicious cycle,” and are exploring “profound transitions” to fight for their continued survival. These are the kinds of headlines that have dominated the discussion of how utilities, facing sagging demand for energy amidst the rise of green-powered, energy-independent customers, are struggling to adapt to a new business paradigm.

Amidst all this talk of transformation, however, it’s important to remember that utilities — at least, the U.S. electricity distribution utilities that have been largely left out of the deregulation that’s swept over the energy industry over the past few decades — are mostly stuck doing things the same way they’ve always done them.

It’s called cost-of-service regulation, and it leaves little room for innovation or risk-taking. But innovation, and the risks and rewards that come with it, are just what is called for in this new energy era, argues a report out this week from GE Digital Energy and The Analysis Group.

via How New Regulatory Models Could Help Utilities Thrive and Survive : Greentech Media.