Avangrid, Inc. (AGR): Business Model Canvas [10-2024 Updated]
- ✓ Fully Editable: Tailor To Your Needs In Excel Or Sheets
- ✓ Professional Design: Trusted, Industry-Standard Templates
- ✓ Pre-Built For Quick And Efficient Use
- ✓ No Expertise Is Needed; Easy To Follow
Avangrid, Inc. (AGR) Bundle
Avangrid, Inc. (AGR) stands out in the energy sector with its comprehensive business model canvas that emphasizes sustainability and reliability. By leveraging key partnerships, extensive infrastructure, and a commitment to regulatory compliance, Avangrid delivers value to a diverse customer base across New York and New England. Explore how this innovative company integrates renewable energy generation with traditional utility services, ensuring a stable energy future while engaging with local communities.
Avangrid, Inc. (AGR) - Business Model: Key Partnerships
Collaborations with Iberdrola, a major shareholder
Avangrid, Inc. is primarily owned by Iberdrola, S.A., which holds approximately 81.6% of Avangrid's outstanding common stock. This significant ownership stake facilitates strong collaboration in strategic initiatives, capital investment, and operational synergies between the two companies. Iberdrola provides financial support through various credit facilities, including a credit facility of $750 million maturing in June 2028.
In 2024, Avangrid entered into multiple intra-group green loan agreements with Iberdrola Financiación, S.A.U., with the following key terms:
| Loan Amount (in millions) | Maturity Date | Interest Rate |
|---|---|---|
| $800 | July 13, 2033 | 5.45% |
| $600 | September 13, 2027 | 5.48% |
| $600 | June 13, 2030 | 5.53% |
| $600 | September 16, 2034 | 5.06% |
Partnerships with local utilities for energy distribution
Avangrid collaborates with various local utilities to enhance energy distribution and service delivery. A notable partnership is with the New England Clean Energy Connect (NECEC), which involves a transmission project linking Québec with New England, with an estimated construction cost of $1.5 billion. Additionally, Avangrid has entered into transmission service agreements with Massachusetts electric distribution utilities, ensuring reliable energy supply and infrastructure investment.
For the nine months ended September 30, 2024, Avangrid reported external revenues from its Networks segment of $5,276 million. This revenue generation is supported by partnerships with local utilities that facilitate the distribution of energy across various regions.
Agreements with renewable energy project developers
Avangrid has established agreements with several renewable energy project developers to advance its renewable energy portfolio. In particular, the company reported a significant increase in revenues from its Renewables segment, reaching $1,147 million for the nine months ended September 30, 2024. This growth is primarily driven by favorable market conditions and strategic partnerships aimed at expanding its renewable energy capabilities.
Avangrid's partnerships also include collaborations with entities like Vineyard Wind, which are critical for developing offshore wind projects. For the three months ended September 30, 2024, Avangrid recorded earnings from equity method investments of $15 million, reflecting successful joint ventures in renewable energy.
Overall, Avangrid's key partnerships with Iberdrola, local utilities, and renewable energy developers are integral to its operational strategy, contributing to its financial performance and market position in the energy sector.
Avangrid, Inc. (AGR) - Business Model: Key Activities
Electricity and natural gas distribution
Avangrid Networks, Inc. manages the distribution of electricity and natural gas across various regions, primarily New York and New England. For the nine months ended September 30, 2024, the operating revenues from Networks reached $6,423 million, a significant increase from $6,027 million for the same period in 2023. This growth is attributed to rate increases, particularly in New York, effective October 12, 2023, which contributed approximately $138 million to revenue.
Renewable energy generation and trading
Avangrid operates a substantial renewable energy segment, primarily focusing on wind and solar energy generation. For the nine months ended September 30, 2024, the operating revenues from Renewables amounted to $1,147 million, up from $1,092 million in the same period of 2023. The increase was driven by higher merchant prices and favorable mark-to-market changes from energy derivative transactions.
The company's renewable energy capacity includes over 7,000 MW of installed capacity across wind, solar, and hydroelectric sources. The strategic focus on renewable energy aligns with broader trends towards sustainability and regulatory support for clean energy initiatives.
Regulatory compliance and reporting
Avangrid is subject to stringent regulatory frameworks across its operating regions, requiring continuous compliance and reporting to various governmental bodies. For instance, the company actively participates in regulatory proceedings at federal, state, and local levels, which can impact its operational strategy and financial performance. In 2024, Avangrid faced various regulatory challenges, including the New England Clean Energy Connect project, which has an estimated construction cost of approximately $1.5 billion.
Compliance with regulations is critical, as it directly affects Avangrid's ability to operate and expand. The company reported total operating expenses of $5,561 million for the nine months ended September 30, 2024, reflecting significant costs attributed to regulatory compliance.
| Key Activity | Operating Revenues (2024) | Operating Revenues (2023) | Increase in Revenue | Regulatory Challenges |
|---|---|---|---|---|
| Electricity and Natural Gas Distribution | $6,423 million | $6,027 million | $396 million | Rate increases in New York |
| Renewable Energy Generation | $1,147 million | $1,092 million | $55 million | New England Clean Energy Connect project |
| Regulatory Compliance | $5,561 million (total operating expenses) | $5,547 million | $14 million | Ongoing compliance costs and regulations |
Avangrid, Inc. (AGR) - Business Model: Key Resources
Extensive utility infrastructure across multiple states
Avangrid operates a vast utility infrastructure, encompassing over 7,000 miles of electricity transmission lines and more than 32,000 miles of distribution lines across New York and New England. The company serves approximately 3.2 million customers. Its regulated utility subsidiaries include New York State Electric & Gas (NYSEG), Rochester Gas and Electric (RG&E), Central Maine Power (CMP), and others, providing a stable revenue stream through regulated rates.
Renewable energy generation facilities (10,037 MW capacity)
As of 2024, Avangrid's renewable energy portfolio includes wind and solar facilities with a combined capacity of 10,037 megawatts (MW). The breakdown of the renewable energy capacity is as follows:
| Type of Energy | Capacity (MW) |
|---|---|
| Onshore Wind | 7,800 |
| Offshore Wind | 2,037 |
| Solar | 200 |
The company has made significant investments in renewable energy, with capital expenditures reaching approximately $2.8 billion in 2024. This focus aligns with its commitment to sustainability and meeting increasing renewable energy demands.
Skilled workforce of approximately 8,000 employees
Avangrid employs around 8,000 skilled workers across its various operations. The company invests in workforce training and development, which is critical for maintaining operational efficiency and adapting to evolving technologies in the energy sector. The total compensation expense for employees was approximately $900 million in 2024. The company also emphasizes safety and employee engagement, contributing to a positive workplace culture and high employee retention rates.
Avangrid, Inc. (AGR) - Business Model: Value Propositions
Commitment to sustainable energy solutions
Avangrid, Inc. is dedicated to sustainable energy, aiming to reduce greenhouse gas emissions and promote renewable energy sources. As of September 30, 2024, Avangrid's renewable energy segment reported operating revenues of $1,147 million, a significant increase from $1,092 million in the same period of the previous year. The company has invested approximately $2,854 million in capital expenditures, with a strong focus on renewable energy projects.
Reliable electricity and gas services for customers
Avangrid provides reliable electricity and natural gas services across multiple regions, including New York and New England. In the third quarter of 2024, the Networks segment generated external revenues of $1,669 million, up from $1,587 million year-over-year. The company has implemented rate increases in New York effective October 12, 2023, contributing to an adjusted net income of $211 million for Q3 2024, compared to $105 million in Q3 2023.
| Financial Metrics | Q3 2024 | Q3 2023 |
|---|---|---|
| Networks Revenue | $1,669 million | $1,587 million |
| Renewables Revenue | $413 million | $387 million |
| Adjusted Net Income | $211 million | $105 million |
Strong focus on regulatory compliance and community engagement
Avangrid actively engages in regulatory compliance across federal, state, and local levels, ensuring adherence to energy and environmental regulations. The company’s participation in projects like the New England Clean Energy Connect, which involves a $1.5 billion investment to enhance transmission capacity, showcases its commitment to regulatory processes and community engagement. This project aims to deliver 1,200 MW of hydroelectric power to the New England grid, reflecting Avangrid's dedication to sustainable community solutions.
As of September 30, 2024, Avangrid's total assets amounted to $46,733 million, indicating a robust financial foundation to support its regulatory and community initiatives.
Avangrid, Inc. (AGR) - Business Model: Customer Relationships
Customer service through local utility offices
Avangrid provides customer service through various local utility offices, ensuring that customers have direct access to support for their energy needs. As of September 30, 2024, the company reported an adjusted net income of $211 million, up from $105 million in the same period in 2023, indicating effective customer engagement strategies that likely contribute to customer satisfaction and retention. The company operates across multiple states, including New York and Maine, with local offices designed to facilitate customer interactions.
Programs for energy efficiency and conservation
Avangrid has implemented several programs aimed at promoting energy efficiency and conservation among its customers. In 2023, the company invested approximately $2.5 million in energy efficiency programs. These initiatives include rebates for energy-efficient appliances and home improvements, educational programs on energy conservation, and partnerships with local organizations to enhance outreach. The company aims to reduce energy consumption and support customers in lowering their energy bills.
Engagement in community initiatives and feedback mechanisms
Avangrid actively engages in community initiatives, which are crucial for building strong customer relationships. The company has allocated funds for community development, totaling $1.8 million in 2024. Additionally, Avangrid has established feedback mechanisms to gather customer insights, which are critical for service improvement. This includes customer surveys and public forums to discuss energy issues and service satisfaction. As a result, the company has seen a 15% increase in positive customer feedback from 2023 to 2024.
| Year | Investment in Energy Efficiency Programs (Millions) | Community Development Funds (Millions) | Customer Feedback Improvement (%) |
|---|---|---|---|
| 2023 | 2.5 | 1.5 | 10 |
| 2024 | 2.5 | 1.8 | 15 |
Avangrid, Inc. (AGR) - Business Model: Channels
Direct service through utility subsidiaries
Avangrid operates through various utility subsidiaries, primarily Avangrid Networks, which includes companies such as Central Maine Power Company (CMP), New York State Electric & Gas Corporation (NYSEG), and Rochester Gas and Electric Corporation (RG&E). As of September 30, 2024, Avangrid Networks reported a net income of $581 million for the nine months ended, an increase from $364 million for the same period in 2023.
Online platforms for customer support and billing
Avangrid has developed robust online platforms that facilitate customer engagement, support, and billing. As of September 30, 2024, the operating revenues from these online services contributed to a total of $6,423 million for the nine months ended, marking a rise from $6,027 million in the previous year. The customer service platform supports various functionalities including bill payments, service inquiries, and outage reporting, enhancing customer satisfaction and operational efficiency.
Partnerships with governmental and regulatory bodies
Avangrid actively collaborates with governmental and regulatory bodies such as the New York State Public Service Commission (NYPSC) and the Connecticut Public Utilities Regulatory Authority (PURA). These partnerships are essential for compliance with regulatory frameworks and for facilitating projects such as the New England Clean Energy Connect, which is projected to have construction costs of approximately $1.5 billion. Such initiatives not only ensure regulatory adherence but also help in expanding Avangrid's service offerings and operational footprint.
| Channel Type | Description | Financial Impact (2024) |
|---|---|---|
| Direct Service | Utility subsidiaries providing electricity and gas | Net income: $581 million (9 months) |
| Online Platforms | Customer support and billing services | Operating revenues: $6,423 million (9 months) |
| Regulatory Partnerships | Collaborations with state regulatory bodies | Project costs: $1.5 billion (NECEC) |
Avangrid, Inc. (AGR) - Business Model: Customer Segments
Residential customers in New York and New England
Avangrid serves approximately 3.3 million residential customers across its utility subsidiaries in New York and New England. The service areas include New York State Electric & Gas (NYSEG) and Rochester Gas and Electric (RG&E), among others. The company has been implementing various programs aimed at improving customer satisfaction and energy efficiency.
In the third quarter of 2024, Avangrid reported a total revenue of $1.671 billion from its regulated operations, which includes electricity and gas services to residential customers. This marked an increase from $1.587 billion in the same quarter of 2023, primarily due to rate increases effective October 12, 2023.
| Year | Residential Customers | Total Revenue (in millions) | Rate Increases |
|---|---|---|---|
| 2023 | 3.3 million | $1,587 | N/A |
| 2024 | 3.3 million | $1,671 | Effective October 12, 2023 |
Commercial and industrial energy users
Avangrid's commercial and industrial customer base includes a diverse set of clients, ranging from small businesses to large manufacturing plants. The company focuses on providing tailored energy solutions to meet the specific needs of these customers. In the nine months ending September 30, 2024, Avangrid recorded $1.089 billion in revenue from regulated natural gas services, which largely serves commercial and industrial users.
The company's strategy includes investments in renewable energy sources and energy efficiency programs aimed at assisting commercial and industrial customers in reducing their energy costs. The total capital expenditures for the nine months ended September 30, 2024, were approximately $2.854 billion, reflecting Avangrid's commitment to enhancing its infrastructure to support its commercial and industrial segments.
| Category | Revenue (in millions) | Capital Expenditures (in millions) |
|---|---|---|
| Commercial and Industrial Users | $1,089 | $2,854 |
Government and regulatory agencies
Avangrid engages actively with government and regulatory agencies at various levels, ensuring compliance with regulations that govern energy distribution and renewable energy projects. The company’s regulatory framework is critical for its operational success, impacting rate structures and investment decisions. As of September 30, 2024, Avangrid's regulatory assets totaled approximately $1.147 billion, reflecting the costs expected to be recoverable through future rates.
The company also collaborates with state and federal agencies on initiatives aimed at promoting clean energy and sustainability. In particular, Avangrid's involvement in the New England Clean Energy Connect project, which has an estimated construction cost of $1.5 billion, underscores its commitment to working with governmental bodies to enhance energy infrastructure.
| Agency Type | Regulatory Assets (in millions) | Project Investment (in billions) |
|---|---|---|
| Government Agencies | $1,147 | $1.5 |
Avangrid, Inc. (AGR) - Business Model: Cost Structure
Operational costs associated with utility maintenance
Avangrid's operational costs for utility maintenance are significant. For the nine months ended September 30, 2024, the total operating expenses amounted to $5,561 million, with operations and maintenance expenses specifically accounting for $2,477 million, compared to $2,319 million for the same period in 2023.
Within the Networks segment, operations and maintenance expenses increased by $185 million from $1,910 million in the nine months ended September 30, 2023, to $2,095 million for the same period in 2024.
Investments in renewable energy projects
Avangrid continues to invest heavily in renewable energy projects. The capital expenditures for the nine months ended September 30, 2024, reached $2,854 million, which includes investments in both Networks and Renewables. The operating revenues from the Renewables segment increased to $1,147 million for the nine months ended September 30, 2024, compared to $1,092 million for the same period in 2023.
Moreover, the company is expected to incur approximately $1.3 billion in capital expenditures through the remainder of 2024, emphasizing its commitment to renewable energy infrastructure.
Regulatory compliance and administrative expenses
Avangrid incurs substantial regulatory compliance and administrative expenses as part of its operations. For the nine months ended September 30, 2024, the taxes other than income taxes were recorded at $539 million, an increase from $516 million in the same period in 2023.
The total operating expenses, which include regulatory compliance costs along with other administrative expenses, have shown a slight increase, reflecting Avangrid's ongoing regulatory commitments.
| Cost Category | 2024 (in millions) | 2023 (in millions) | Change (in millions) |
|---|---|---|---|
| Operations and Maintenance | 2,477 | 2,319 | 158 |
| Purchased Power, Natural Gas and Fuel Used | 1,610 | 1,844 | (234) |
| Depreciation and Amortization | 935 | 868 | 67 |
| Taxes Other Than Income Taxes | 539 | 516 | 23 |
| Total Operating Expenses | 5,561 | 5,547 | 14 |
Avangrid, Inc. (AGR) - Business Model: Revenue Streams
Revenue from regulated electricity and gas sales
For the three months ended September 30, 2024, Avangrid reported operating revenues of $1,671 million from its Networks segment, which includes regulated electricity and gas sales. This represents an increase of $84 million from $1,587 million for the same period in 2023. The rise was primarily attributed to a $138 million increase in electricity and gas revenues due to rate increases in New York effective October 12, 2023.
For the nine months ended September 30, 2024, Networks segment revenues reached $5,279 million, up from $4,936 million in the same period of 2023, marking an increase of $343 million.
| Period | Operating Revenues (in millions) | Change (in millions) |
|---|---|---|
| Q3 2024 | $1,671 | $84 |
| Q3 2023 | $1,587 | - |
| 9M 2024 | $5,279 | $343 |
| 9M 2023 | $4,936 | - |
Income from renewable energy generation and trading
Avangrid's Renewables segment reported operating revenues of $413 million for the three months ended September 30, 2024, compared to $387 million for the same period in 2023, reflecting an increase of $26 million. This growth was largely due to an increase in merchant prices and favorable mark-to-market changes of $21 million on energy derivative transactions.
In the nine-month period ending September 30, 2024, total revenues from the Renewables segment increased to $1,147 million from $1,092 million, resulting in a $55 million rise. The increase was driven by favorable thermal and power trading conditions and higher average prices in the current period.
| Period | Operating Revenues (in millions) | Change (in millions) |
|---|---|---|
| Q3 2024 | $413 | $26 |
| Q3 2023 | $387 | - |
| 9M 2024 | $1,147 | $55 |
| 9M 2023 | $1,092 | - |
Fees from energy efficiency programs and other services
Avangrid generates additional revenue through various energy efficiency programs and other services. For the three months ended September 30, 2024, the company reported alternative revenue programs contributing $15 million. For the nine months ended September 30, 2024, this figure increased to $111 million, indicating a strong performance in this area.
| Period | Alternative Revenue Programs (in millions) | Change (in millions) |
|---|---|---|
| Q3 2024 | $15 | - |
| Q3 2023 | $20 | - |
| 9M 2024 | $111 | $21 |
| 9M 2023 | $90 | - |
Article updated on 8 Nov 2024
Resources:
- Avangrid, Inc. (AGR) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Avangrid, Inc. (AGR)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Avangrid, Inc. (AGR)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.