Earlier this year, Apple Inc. launched an entirely new subsidiary of its business, dubbing it as "Apple Energy". While Apple Inc. is not the first commercial entity to register its own energy-related subsidiary with the Federal Energy Regulations Committee (FERC), its bold vision for Apple Energy may revolutionize the way businesses think about energy production and consumption, and could send major shock waves through the utilities industry as well.  Apple Inc. quietly announced its intention to become its own energy supplier, but many will intently watch its energy-related actions, as there has been an ever-increasing emphasis on the development and use of green and renewable energies in recent years.
Now that Apple Inc. has successfully registered Apple Energy with the FERC, it can effectively begin selling electricity all throughout the United States, though Apple Energy has not (as of yet) expressed any plans to begin selling electricity to individual households or businesses.  Apple Energy's main purpose is to act as a green utility by providing renewable energy almost exclusively to its parent company. To do this, Apple Inc. has partnered with First Solar and has agreed to begin buying solar energy from an energy farm called California Flats.  The electricity that Apple Energy will acquire from this contract, in addition to Apple's other green energy investments, will likely be enough to power all of the company's domestic operations. However, Apple Inc. does a significant amount of its production and distribution off-shore, and it will not be able to claim it operates on 100% renewables in countries outside of the United States.  It should be noted that Apple Inc. is not licensed to produce or sell electricity, which is why registering Apple Energy with the FERC was necessary in the first place.
Apple Inc. likely has several motives at play with the creation of its own clean energy branch. The first comes from a public relations standpoint, as the company has made several public commitments, including acting as an early signee of RE100, to 100% renewable energy.  RE100 is a coalition of some of the world's largest companies that are committed to reaching entirely green energy consumption. In addition to PR motives, Apple, Inc. will enjoy substantial savings on energy costs with the creation of Apple Energy, as it can sell its parent company as much energy as it needs at wholesale rates, eliminating the need for Apple Inc. to purchase dirty energy from a traditional utility company at the higher retail rates.  With the advent of the cloud, Apple Inc.'s energy consumption is higher than ever and is continuing to grow; by bringing the energy production process in-house, Apple Inc. expects to save hundreds of millions of dollars over the 25-year life of its contract with First Solar/California Flats. Finally, registering Apple Energy will allow Apple Inc. to make significant future investments in renewable energy projects (like its stake in California Flats) without alarming its own shareholders with what some might consider "reckless" uses of company funds.  If the investments become successful, Apple Inc. will have simply brought in addition revenue; if the investments do not work out, it will be relatively easy for Apple Inc. to sell its energy subsidiary.
As previously mentioned, Apple Inc. is not the first major company to register an energy subsidiary with the FERC, as it follows in the footsteps of Wal-Mart, Google, and Exxon. However, Apple Inc.'s high degree of company visibility, combined with its unique vision to provide itself with 100% renewable energy, could make the company the first domino to fall in a long series of similar transactions amongst companies that have the financial resources to contract with renewable energy projects on a large scale. If Apple Energy begins selling electricity to residential customers, other companies may eventually follow suit. Not only would this change our perception and usage of these companies (Apple Inc. could become a utility as well as a cell phone/electronic provider), but it could also jeopardize the role and existence of traditional utility companies. Although the electrical "grid" will likely remain a necessity for several more decades, utilities would face a severe decline in profits if Apple Energy and similar subsidiaries begin siphoning away their customers. While reaching 100% renewable energy is certainly an admirable goal, Apple Inc. could certainly throw a wrench in the works with Apple Energy in the near future.
© Justin Roberto. The author grants permission to copy, distribute and display this work in unaltered form, with attribution to the author, for noncommercial purposes only. All other rights, including commercial rights, are reserved to the author.
 D. Cardwell, "Apple Becomes a Green Energy Supplier, With Itself as Customer," New York Times, 23 Aug 16.
 P. Fox-Penner, "Why Apple is Getting in to the Energy Business," Harvard Business Review, 25 Nov 16.