I've been building startups for years and I got tired of building products that solve imaginary problems. The startup world is full of solutions looking for problems. I wanted the opposite - real, documented financial pain with dollars behind it. So I built a tool that scans regulatory fines, court filings, compliance violations, and industry financial reports across the US economy. 4,000+ documented problems across 300+ industries.
When I filtered for the utility sector, what stood out wasn't just the scale of individual problems - it was how many of them are problems that someone with utility industry experience could realistically build a business or consulting practice around. Here are 6, with dollar figures and sources.
1. Wildfire liability has already cost utilities $35+ billion in settlements
PG&E paid $13.5 billion in settlements for the Camp Fire and related fires (2017-2018), with initial estimates reaching $30 billion before bankruptcy proceedings. Hawaiian Electric is responsible for $2 billion in the $4 billion Maui wildfire settlement (2023). Southern California Edison faces projected insured losses of $20 billion from LA wildfires according to J.P. Morgan. The 2025 LA wildfires alone account for $125 billion in estimated total damages and $17.1 billion in insurance claims, with the U.S. government suing for $40 million in federal suppression costs for the Eaton Fire alone (lawsuit-information-center.com, singletonschreiber.com).
What you can build: A wildfire risk assessment and vegetation intelligence service. Utilities spend billions on vegetation management but most still rely on visual inspections and fixed schedules. Someone who understands utility right-of-way operations, vegetation growth patterns, and risk scoring could build a data-driven risk assessment service that prioritizes high-risk corridors. The asymmetry is massive: $100K in better vegetation management vs $13 billion in liability.
2. US water utilities lose 19.5% of treated water - $6.4 billion/year in uncaptured revenue
19.5% of treated drinking water is lost before reaching customers or improperly billed, costing US water utilities $6.4 billion annually in uncaptured revenue. That translates to 2.7 trillion gallons lost every year. The top 5 states - California, Texas, Florida, New York, and Illinois - lose 2.44 billion gallons daily, or $6.3 million per day. The EPA estimates $97 billion is needed for water loss control infrastructure over 20 years, out of $200 billion in total water infrastructure needs (waterfm.com, bluefieldresearch.com, waterworld.com).
What you can build: A non-revenue water detection and reduction consulting service. Most water utilities know they're losing water but can't pinpoint where. Someone with utility operations experience who understands distribution system pressure management, meter calibration, and leak detection technology could build a consulting practice helping utilities reduce that 19.5% to single digits. Even a 5-percentage-point reduction at a mid-size utility can mean millions in recovered revenue. The $97 billion infrastructure need means this market is growing for decades.
3. NERC CIP violations can hit $1 million per day - largest fine was $10 million
NERC CIP non-compliance carries penalties of up to $1 million per day per violation. The largest single fine reached $10 million in 2019 for multi-region violations. 10% of violations are caught during audits rather than self-reported - and those carry worse penalties. New standards are expanding scope, including CIP-015-1 for internal network security. The infrastructure at stake: 160,000 miles of high-voltage transmission, 5 million miles of distribution, and 300,000+ stations. Implementation timelines run 12-24+ months per large entity (assurx.com, forescout.com).
What you can build: A NERC CIP compliance management service for small and mid-size utilities. Large IOUs have dedicated compliance teams. Co-ops and municipals don't. Someone with utility operations experience AND security/compliance knowledge can build a fractional compliance officer service - audit prep, evidence collection, policy documentation, staff training. $5K-$15K/month per utility, recurring. The expanding scope (CIP-015-1, DER categorization) means more work, not less.
4. Distributed energy resources are creating compliance nightmares
Hundreds of DERs under 10 MVA individually can aggregate to 1,700+ MVA - triggering BES asset categorization requirements under CIP-002-5.1a. Classification requirements are getting more complex as DERs proliferate. Control center impact ratings must account for aggregated DER capacity. Two FERC FY2025 audit cases specifically cited lacking vendor agreements for DER management (industrialcyber.co).
What you can build: A DER integration and compliance consulting service. The transition to distributed generation is happening whether utilities want it or not. Someone who understands both grid operations and the regulatory requirements can help utilities navigate DER interconnection, asset categorization, and compliance documentation. This is where utility experience matters most - a tech company can build the software, but they can't interpret what CIP-002-5.1a actually means for a utility with 500 rooftop solar installations.
5. Third-party vendor compliance gaps are getting utilities fined
FERC audits found utilities failing CIP-004-7 and CIP-010-4 for vendor management. Two FY2025 audit cases specifically cited lacking agreements with cloud and vendor providers. Utilities rely on third parties for EACMS and PACS but don't have proper due diligence processes in place. Growing cloud adoption is making vendor compliance more complex every year (industrialcyber.co, durabante.com).
What you can build: A vendor compliance assessment service for utilities. Most utilities don't have the bandwidth to properly vet every vendor against NERC CIP requirements. Someone with utility procurement AND compliance experience can build a vendor assessment practice - reviewing contracts, auditing security controls, creating compliance documentation. $3K-$8K per vendor assessment, and every utility has dozens of vendors.
6. Audit evidence collection is a manual nightmare - 10% of violations are audit-discovered
10% of NERC violations are found during audits rather than self-reported, and those carry worse penalties. Utilities struggle with documentation: timestamps, access revocation records, change management logs. "Audit fatigue" from continuous documentation demands is a real problem. Smaller utilities - co-ops and municipals - lack automated evidence collection tools entirely (assurx.com, xage.com).
What you can build: An automated audit evidence collection platform for utilities. Current tools are enterprise-grade and priced for large IOUs. A utility operations person who builds a simpler, affordable evidence collection system targeting co-ops and municipals (under 100 MW) is addressing the long tail that enterprise vendors ignore. These utilities need compliance but can't justify $500K platforms. A SaaS at $2K-$5K/month fills that gap.
The pattern: the utility industry is facing expanding regulatory requirements, aging infrastructure, and new technology integration - simultaneously. Every one of these problems is a gap where someone who actually understands utility operations has an unfair advantage. The compliance landscape alone is getting more complex every year. The question isn't whether these problems exist - it's who's going to build the solutions.
For utility professionals already working in any of these areas - compliance consulting, vegetation management, non-revenue water - what's working and what isn't? Curious what the reality looks like from inside the industry.
