By Rachel Z. Arndt and John Carey

Changing the Energy Mix

These are challenging times to be a CEO in the utility sector. Today's companies are under pressure from government and the public to deliver cleaner, greener power. They are also being forced to transform the ways they bring electricity to customers. Some companies are even paying people to use less of their product—Pacific Gas and Electric and many others are trying to encourage businesses to consume less power during peak hours. On the other side of the country, workers at Public Service Enterprise Group (PSEG) are going door to door in Trenton, N.J., giving away energy-efficient lightbulbs and insulation to help their customers use less power.

New federal regulations also mean that electric power companies must overhaul their decades-old business practices. Utilities must become more efficient in order to compete, and they must innovate. That helps explain a profusion of new concepts and technologies, including the "smart grid." The idea, basically, is to let electrons flow in any direction, so that businesses and individuals with solar panels on their roofs don't just buy power from the grid, but also sell it back.

But that's just one of many developments. MIT researcher Daniel Nocera is trying to perfect a new way to split hydrogen and oxygen using sunlight. If this and other strategies succeed, the future of electricity could be in the home, with individuals generating enough power to satisfy their own needs. There are more conventional solutions, too, such as paving stretches of deserts with solar panels, studding cornfields with windmills, and capturing the power of ocean waves. Here is a look at the old and new ways utilities are trying to meet the challenge.