Risk management as competitive advantage
Imagine a future where risk management is not a cost center but a source of competitive advantage. In this vision, AI and human knowledge work together around the clock to monitor grid reliability, regulatory changes and market dynamics — spotting risks and opportunities in real time. Teams are empowered by data and automation to anticipate outages, manage compliance obligations and optimize investment decisions rather than being buried in manual processes. This is not science fiction. It is the direction leading utilities are heading as they navigate distributed energy resources, evolving rate structures and heightened stakeholder expectations.
To get there, organizations must fundamentally rethink how they organize around risk, controls, regulatory compliance and assurance.
A new operating model for risk
What does this look like in practice? The future risk operating model is a significant departure from the traditional three lines of defense. Business units would still own their risks and operate controls, but they would be supported by service hubs that provide leading analytics, tools and data.
At the center is an orchestration layer — a “mission control for risk” — that connects proficiency across the organization, sets standards and secures regulatory readiness. A key component of this model is the deployment of an end-to-end, AI-enabled regulatory compliance solution that actively monitors for regulatory changes, builds and maintains a comprehensive obligation inventory and maps these obligations to processes, controls and risks. By automating these connections, organizations can achieve greater consistency, transparency and agility in compliance management. Instead of duplicating efforts, there is a single source of truth for risk and compliance data, making reporting seamless and freeing up teams to focus on what matters. This is a shift from reactive firefighting to proactive foresight.
Creating clarity and confidence in risk management
Today, many organizations’ risk and compliance landscapes resemble a patchwork quilt — different teams, systems and approaches. The opportunity is to bring order to this complexity through a unified platform that covers everything from cyber to sustainability across states, regions and even the globe. But it is not just about technology; it is about clarity, confidence and the ability to make better decisions faster.
Consider, for example, a particular risk and regulatory compliance function where hundreds of people may be dedicated solely to testing regulatory compliance and operational controls, often using different tools and templates across business units. By moving toward a service hub model, organizations can achieve more consistency, broader coverage and significant efficiency gains. This is not about taking control away from the business — it is about equipping them with better tools and support so they can focus on delivering value.
The transformation journey
Transforming risk and compliance into a strategic advantage requires more than new tools — it demands disciplined execution from the start. The journey begins by defining a clear scope and building a compelling business case that aligns with regulatory priorities and organizational goals. From there, success hinges on engaging cross-functional stakeholders early to validate assumptions, secure buy-in and anticipate barriers. Rather than treating transformation as a one-time project, leading companies approach it as an iterative process: start small, run pilots, capture lessons and scale with confidence. Each phase should deliver measurable value — whether through improved compliance visibility, faster decision-making or reduced risk exposure — while actively managing change to keep people aligned and momentum strong.
Call to action
The risk landscape for power and utility companies is not slowing down — it is accelerating. Regulatory shifts, evolving rate structures and stakeholder expectations demand more than incremental change. The companies that lead will be those that turn risk management into a strategic advantage: leveraging technology, integrating compliance and building agility into their operating model. Organizations may benefit from considering timely action — because in a future defined by complexity and competition, clarity and confidence in risk are not optional; they are the foundation for growth.
