The Power Grid Is Changing. What It Means for Utility Stocks—and Your Electricity Bill.

The year is 2051 and newly married, first-time homeowner Olivia is driving to work. (Olivia was one of the most popular baby names in 2020, and she has just turned 31.)

She parks her electric vehicle at an office building at 6:45 a.m. and plugs in her EV, getting a free charge at work. About half of the vehicles sold in the U.S. are still gasoline-powered, but there are enough EVs that it makes sense to get there early. Just after lunch, Olivia gets an alert on her phone that her car isn’t charging. On this scorching July day, the electric company needs the energy to meet peak cooling demand. She understands—and also understands the opportunity it offers, as she taps a “sell” button on an app. Her car starts to discharge electricity to the building’s battery, which will power the lights and air conditioning during peak hours, lowering the building’s total cost of operating by not relying on the grid.

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Olivia gets something, too. By the time she leaves work, her car has discharged about 40 miles worth of electricity, knocking $3 off her monthly bill. She could have sold more, but she wanted to make sure she had enough left to get home.

Olivia’s car isn’t the only thing responding to the heat wave. So does her two-bedroom bungalow in a nice suburban neighborhood, which uses a heat pump to cool down. In an alert on another app, she learns that the electric company had lowered her thermostat to 68 degrees in the morning, cooling her home ahead of expected peak demand. The utility then set the thermostat to 75 degrees in the afternoon, and reset it to 72 degrees about an hour before she got home.

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