With the increase in customer generation, such as solar power and microgrids, as well as the continued focus on energy efficiency, electric utilities' profits have sagged. That is, not only are utilities losing revenue as a result of customers generating their own power, but also because almost all customers are using less of it.

It would seem logical that utilities would cut back on capital expenditures on their infrastructure. However, according to a new report from the U.S. Energy Information Administration (EIA), electric utilities actually are increasing their capital spending.

"Spending on electric distribution systems by major U.S. electric utilities, representing about 70 percent of total U.S. electric load, has risen 54 percent over the past two decades, from $31 billion to $51 billion annually," states the EIA report. "This increase has been largely driven by increases in capital investment."

According to the report, transmission system capital investment has also been increasing, at approximately the same pace as distribution capital expenditures.

Part of the investment is going toward replacing existing equipment that is aging, such as power transformers, substation transformers, circuit breakers, poles, wires, etc. However, according to the report, there is new capital investment on the infrastructure to bring it into the 21st century, including sensors, smart meters, utility-scale solar farms and wind farms, utility-scale battery storage systems, and other equipment designed to make the grid more responsive to today's ever-changing load demands and information demands.

So how do electric utilities plan to recoup these investments if existing revenues have been declining? There are at least two bright lights on the horizon. Both of them relate to the fact that increasing numbers of customers are focusing attention on going green.

First, the rising popularity of electric vehicles (EVs) is leading to an ever-growing demand for EV charging stations and infrastructures—both in customer homes as well as on highways and in other public areas. While some of the charging stations are solar-powered, the majority are connected to the grid, thus increasing the demand for utility-generated power.

According to a new report from the National Renewable Energy Laboratory (NREL), electric utilities could see existing stagnant demand increase at growth rates of 1.6 percent per year, or a sustained absolute growth of 80 terawatt-hours per year.

"When the transportation sector is fully electrified, it will result in around $6 trillion in investment," states the NREL report.

Second, while more customers want green energy, not all of them are willing to set up their own generation. As a result, according to a new report from Navigant Consulting, more businesses, universities and municipalities are becoming interested in purchasing green energy from their local utilities, such as the utility-scale solar and wind farms mentioned earlier. The result? Again, a growing revenue stream for utilities.