WFH movement: looking ahead

Mike Zaccardi, CFA, CMT

COVID-19 has already had a drastic impact on power demand across the USA. Utility firms have been scrambling to adjust to the work-from-home movement and a severe drop in commercial and industrial demand.

For some utilities that service primarily households, they may have seen an uptick in consumption as computers being logged-on all day use up electricity and kitchens are being used more than ever. On the flip-side, power companies responsible for business and industry have likely seen a dramatic downturn in usage. So it really depends on the customer base in the electric utility space.

At the moment, we are seeing a little bit higher demand from a month ago when lockdowns were more prevalent. Americans, almost regardless of statewide orders, are driving around more versus the lows in late March to mid-April. I guess everyone is just restless at this point.

And what does the future hold? A recent survey of CFOs found that the work-from-home movement could be here to stay – obviously not quite matching current levels, but still significantly higher than pre-COVID-19. The study found that executives expect about 44% of the workforce to work from home versus 13% prior to the pandemic.

Interestingly, firms with revenue between $5-15 billion may have the most WFHers while small business not surprisingly would have the fewest. Overseas, CFOs expect European workers to be more reluctant about working at the office as a higher percentage of workers may stay home.

What does this mean for utilities? As if the landscape wasn’t already shifting around quickly, the WFH movement just adds another important wrinkle for analysts & power managers to consider when managing risk for the intermediate and long-term. Uncertainty abounds within a space that most see as boring & stable. There are few things completely predictable about the business anymore.

More research data:

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